Government should support the growth of innovation capacity in all Canadian companies, not just start-ups or companies involved with superclusters.
In their recent Policy Options article “A New Era for Innovation Intermediaries in Canada,” Mark Robbins and Jeffrey Crelinsten hint at a challenge that seems clear from a perspective of working internationally in the general area of “innovation.” My experience suggests government policy-makers could benefit by making a distinction between entrepreneurship and innovation. By taking this approach, government “innovation” policy could be more effective in raising the level of innovation in all Canadian businesses.
Programs like the Canadian Accelerator and Incubator Program (CAIP) and the many start-up labs can prompt more people to have the confidence and resources to start a new venture. What troubles me is the implicit assumption that these start-ups have something to do with innovation. I suspect there is little evidence to suggest that most start-ups involve any true innovation; most will replicate a technology or service model that already exists. Would it not be better to view this investment from a perspective of entrepreneurship instead and judge success by measuring business and job creation?
For example, Shopify is a technology star today. Yet it does not provide a service that could be considered “innovation,” because there are many online retail platforms. It is obvious that its founders executed their vision for a marketable service superbly. It built sales strategies, staffing models and internal systems to grow the business. This is entrepreneurship: seeing the potential for a business, acting on a start-up plan, growing the business and deciding on its long-term future.
This distinction between entrepreneurship and innovation is slowly being recognized by some in the academic community, but not all. Numerous universities offer programs such as a “master’s in innovation and entrepreneurship.” When you review the courses on offer, it is clear they focus on entrepreneurial topics. The course I taught called Creativity and Innovation in a Master of Innovation and Entrepreneurship program at the University of Adelaide gave students an understanding of the role of innovation managers in large established organizations. Most students came to the program with a degree in project management or engineering. The final assignment involved creating a true innovation management strategy for an organization focused on change, new product and service goals, and actions to build the skills, capacity and culture for those in the organization to innovate.
A 2010 report from a task force of the Association to Advance Collegiate Schools of Business, Business Schools on an Innovation Mission, suggests that the “tendency to think that innovation equates to entrepreneurship” may stem from the influence of the highly respected management academics Joseph Schumpeter and Peter Drucker, whose work treated the subjects as closely linked. However, the report notes, “conflating the two robs both of their full potential. As it is understood today, entrepreneurship is about organization creation, regardless of whether it is innovative or not, and innovation is about implementing something new, regardless of whether it is through a newly created organization.”
This approach opens the door to the development of policy for both concepts. Canada could learn from tactics other countries have used.
New Zealand’s boldest move was to pick design as a national competitive strategy in 2002, to boost innovation and the export potential of these new innovations. New Zealand Trade & Enterprise (NZTE) wanted to improve the export potential of the biggest companies in the country. This led to a vast amount of publicity, publications and conferences, and the rollout of a public sector advisory service called Better by Design. NZTE also talked directly to the business community. At one time, 20,000 business owners and managers received its management magazine.
In 2015, Australia launched a new national innovation strategy. Australia has a long history of profiting from its mining boom; the innovation strategy was branded as launching an “ideas boom” to reflect the need for innovation in business. While its effectiveness is debated, a communication program worth millions, including television advertisements, helped to engage the business community. It nurtured the growth of a large innovation ecosystem.
Singapore launched the Innovation Scorecard program in 2003 to engage with businesses. The goal was to prompt senior managers to make better decisions to improve the culture of innovation within their organizations.
The difference between entrepreneurship and innovation is understood by Shopify. Adrian Cho used to have the title “Director of Getting Sh*t Done.” His team was tasked with inventing internal planning and management models, processes and tools to help staff innovate new customer solutions. Shopify is a large successful business today; the “Department of Getting Sh*t Done” keeps designing new processes so staff will continue to innovate customer solutions in the future. This should be a management function of all companies.
It is time for government policy to prompt the growth of innovation capacity in all Canadian companies, not just start-ups or a small number of companies involved with superclusters, as Innovation Canada currently does. Recognizing the difference between entrepreneurship and innovation could be a big leap forward.