FOR WHAT IT'S WORTH with Blake Melnick
FOR WHAT IT'S WORTH with Blake Melnick
Adressing Canada's Innovation Paradox
Canada consistently ranks near the bottom of global innovation indexes — despite world-class education, research, and talent. In Addressing Canada’s Innovation Paradox, I explore the reasons why.
Drawing on insights from the Conference Board of Canada, Jim Balsillie, and the Council of Canadian Innovators, this episode exposes the roots of our productivity challenge: an outdated Industrial Mindset, indirect funding models, and a failure to own and scale our intellectual property.
It is time for a bold shift from an Industrial Mindset to a Knowledge Mindset - one that makes knowledge our primary commodity, not physical products and shows how Canada can become the innovator’s first customer, closing the commercialization gap and keeping innovation value at home.
Through real-world examples, research, and reflection, For What It’s Worth re-imagines how Canada can transform from an exporter of ideas to a global leader in innovation.
The music for this episode, Rain, is performed by our current artist in residence,#TracyJones from his album #LuckyTime
You can find out more about Tracy by visiting the Blog Post for his episode
From those who know to those who need to know
Workplace Innovation Network for Canada
Every Graduate is Innovation-Enabled; Every Employee can Contribute to Innovation
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Addressing Canada's Innovation Paradox
Blake Melnick: [00:00:00] On Tuesday, November 4th, Mark Carney, the liberal party, released their much anticipated budget to build Canada Strong. Regardless of how people feel about the particulars of the budget, there is little question that Carney is focused on addressing Canada's innovation paradox. The budget is a long-term view on how we can improve our capacity for innovation that leads to a direct impact on our GDP.
And while I would've liked to see something more in the budget about tax reform, insofar as it would encourage investment and also more about the importance of eliminating interprovincial trade barriers for both products and people. One of the things the government has not talked a lot about is that interprovincial trade barriers prevent mobility of people.
So licensed lawyers, [00:01:00] doctors, engineers, and teachers are not able to move to where the work is. It is this movement which actually encourages and supports innovation and productivity across the country. But regardless of all of that, I'm pleased with the budget, and I also think it's a perfect segue into this episode.
Well, welcome to this week's episode of for what it's Worth called Addressing Canada's Innovation Paradox. I'm your host, Blake Melnick. In November, 2024, I was invited to deliver the keynote address at the Growing Your Workforce Conference in Windsor, Ontario. When I walked on the stage, I had two simple goals.
The first was to shift how we think about innovation. To challenge the myths, the cliches, and the old assumptions that tend to hold us back as a country. We know that Canada's GDP is declining, and I really wanted to get to the root of that problem and [00:02:00] offer a potential solution. The second point I wanted to make was to show that innovation isn't magic.
It can be made systemic. We can design for it, measure it, and sustain it if we're willing to shift our mindset around work and learning. Because for all our intelligence, education, and creativity, Canada remains one of the most persistent underperformers when it comes to innovation. We're brilliant at coming up with new ideas, but too often those ideas either die on the vine or they grow up and they leave home commercialized somewhere else.
Creating value and wealth for another economy. Why does this keep happening? Well, we live in an era defined by exponential change, a time when automation, artificial intelligence, and a gig-based economy are rewriting the rules of work and learning. [00:03:00] We're in the knowledge, age, an age where the most valuable resource isn't oil, gas, or manufacturing
output. it's what we know, how fast we can learn and how effectively we can share and apply that knowledge to deliver a result. But here's the paradox. Despite being more connected than ever, we're also more fragmented. We are flooded with data and information, but starved for knowledge and understanding. We communicate constantly, but learn less deeply, and this has huge implications for innovation. In Windsor. I asked the audience the question. How do we prepare people for jobs that don't exist using practices that don't exist in industries that don't yet exist? This is not a rhetorical question. It defines the challenge of our time. [00:04:00] According to the conference board of Canada's 2024 Innovation Report Card, Canada ranks 15th out of 20 similar nations.
In terms of our overall innovation performance, we're behind countries like Korea, Switzerland, Singapore, and Germany. We have an A-level education system. But C level innovation results, the conference board warns that our inability to speed up innovation based growth isn't just a business risk, it's a threat to our standard of living, to our competitiveness and to our social programs.
And it isn't a new problem. It's a pattern that repeats every few years with the same results and the same partial remedies. We fund research. We launch research grants. We provide tax credits. We invest in education. We produce brilliant ideas and talented graduates, [00:05:00] but we struggle repeatedly to bring those ideas to market and to drive an impact to our GDP.
We're excellent at invention, but poor at commercialization. Jim Basili, the former CO CEO of Research in Motion, and the founder of the Council of Canadian Innovators often says Canada is a world leader in producing intellectual property, but a chronic exporter of it. Basili points out that up to 75% of Canadian generated IP ends up owned by foreign entities.
That means we're doing the hard part, the creative, high risk work of innovation only to hand off the rewards to someone else. And it's really not just about ownership, it's about mindset. We operate as Basillie puts it with an industrial mindset, a worldview shaped by an old economy of manufacturing and natural resources.[00:06:00]
We measure success in production, output and efficiency in making widgets, in other words, not creating the knowledge that makes those widgets valuable to everybody else. Canada is still focused on building the car when the real money and opportunity and growth lie in the software that drives it. So in other words, we're still selling the product when the rest of the world is selling the algorithm.
The industrial mindset made sense when value came from physical goods and creating scale in the knowledge. Age value comes from ideas and from the ability to turn information into insight and insight into action. The knowledge mindset is about learning velocity. How fast we can turn experience into understanding.
It's about recognizing that our most valuable resource walks [00:07:00] out the door every night, our people and their collective intelligence and capacity to create. The problem is that our systems, funding, policy, education, et cetera, still reward industrial behaviors in a knowledge-based economy. We measure productivity and output per hour instead of ideas per hour.
We teach compliance instead of curiosity. We fund research instead of risk taking. In a sense, we've confused activity with innovation, and that's what makes the paradox so stubborn. If you talk to Canadian innovators, you'll hear a familiar frustration. They'll say, we can get seed money, we can get research grants.
But when it comes to building a product, scaling a company, hiring talented people, or finding our first customer, we're [00:08:00] on our own. That's the missing middle. The commercialization gap. Canada has relied for decades on indirect funding programs like shred tax credits, grants, public research, these support research and development, but not necessarily market success.
We need more direct funding investments that go straight to the innovators to bring ideas to market. And we need a radical but simple shift, Canada should become the innovator's first customer. When government buys Canadian innovation, it does three things. Number one, it validates the product and the money spent.
Number two, it keeps the intellectual property and the economic value here in Canada. And number three, it de-risks the market for others to follow. This is [00:09:00] not a theoretical approach. The United States has been using it for decades. NASA DARPA the US Department of Defense have all acted as early customers for emerging technologies from semiconductors to the internet itself.
When Canada acts as a first customer, we do more than buy a product. We invest in a future economy that we actually own. As the Council of Innovators have said, if we continue to fund innovation indirectly, we'll keep trading the world's smartest people to build wealth somewhere else. . Part of the problem is definitional. We use the word innovation for almost everything. New ideas, apps, programs, slogans until it becomes meaningless. So let's try to bring some clarity to this. Invention is the creation of something new to the world, a process, a [00:10:00] product, a concept.
Innovation is the application of that invention in some way that changes how we live or work. Entrepreneurship or Intrapreneurship is how we bring that change to life outside and inside an organization. The bridge between invention and innovation is knowledge management. Without systems to capture, share, and apply what we know, ideas tend to remain in silos.
They never get returned to or re-invented, or worse, they become ignored. And that's what separates countries that generate value from those who simply generate ideas. Knowledge management is the engine of innovation. And KM is not about databases or document control. It's a strategic business discipline [00:11:00] for managing the cultural condition that supports behaviors of innovation within organizations, it's about creating the processes, structures, and relationships that allow knowledge to flow from those who know to those who need to know when they need to know it. The conference board of Canada found that organizations with better knowledge processes are measurably more innovative and productive because knowledge is the raw material of innovation. It starts as data becomes information, and through reflection, collaboration, and application turns into knowledge. Innovation is what happens when we apply knowledge in new ways and in the knowledge, age, knowledge itself is the commodity.
It doesn't wear out. It only multiplies through use. When we invest in knowledge systems, we don't just improve productivity. We [00:12:00] future proof our economy.
For years, knowledge and innovation felt intangible, too soft to measure. That's changing, largely driven by the International Organization for Standardization. Called ISO. ISO has now developed formal standards for both knowledge management and innovation. ISO 3 0 4 0 1 published in 2018 defines knowledge as a core asset that drives resilience, adaptability, and competitive advantage.
Valuable results come from applied knowledge. ISO 56,000 introduced in 2020 treats innovation as a system, not a random act. It defines knowledge, creativity, and adaptability as the building blocks of growth. These standards matter because they make [00:13:00] innovation part of every job description, just as ISO 9,000 did for quality, these frameworks make knowledge and innovation measurable, repeatable, and sustainable. you plan for innovation, you won't have to panic when change arrives. However, building frameworks and standards are not enough. Innovation is largely dependent on mindset. When we align. People, processes, workflow, technology, and behaviors around shared purpose.
Innovation then becomes part of how we work, not an extracurricular activity. It's what I call intentional design. You can design for innovation the same way you design for safety, quality, or sustainability. It starts with creating structures that support curiosity. Onboarding that emphasize the importance of learning and [00:14:00] mentoring that shares tacit knowledge, professional development that rewards collaboration and technologies designed for use, not just efficiency.
When people have permission to ask questions, to experiment and fail safely, innovation flourishes. So what motivates people to innovate? Our colleague, Dr. Terry Soleas from Queens University has spent years studying what drives people to innovate. His findings are simple, yet profound. People innovate when they feel safe taking risks when they know failure won't end their career. When they see value in what they're doing and when they get feedback, reinforcement and recognition, when they have the time and resources necessary to think and experiment, and when they see. Leaders modeling the behaviors they're asked to show themselves.
In other words, [00:15:00] innovation is a human system powered by trust, purpose, and psychological safety. And without those no amount of funding will help. So how do we close the gap? How do we turn Canada's creative capacity into economic strength? It starts by recognizing that innovation is not a side project.
It is a system itself. We need policies that fund knowledge, not just equipment. We need education that rewards inquiry, not memorization. We need organizations that see learning as an investment. Not a cost. And we need governments willing to act as the customer to buy Canadian innovations, lock in IP and keep the intellectual capital here at home.
Because when we lose our ip, we don't just lose patents, we lose future industries. Again, to quote Jim Basili, innovation without IP ownership [00:16:00] is philanthropy, and that's not a sustainable economic strategy. We must move from an industrial mindset where the value is in production to a knowledge mindset where the value is in creation.
And if we do it right, we can transform our innovation paradox into an innovation advantage. So here are some takeaways. Number one, innovation is accessible to everyone. Number two, employee led innovation is a force multiplier.
Number three, building the mindset for innovation is critical. Number four, the skills and mindsets of entrepreneurs and intrapreneurs are the same. Only the context differs. Number five, organizations with better knowledge processes are more innovative and perform better. Number six, cultures that support curiosity and experimentation produce both [00:17:00] better work and better results.
And finally, being an innovator or a nation of innovators requires perseverance, resilience, and structures that reward the continuous pursuit and commoditization of new knowledge. If Canada truly wants to solve its innovation paradox, we need to stop measuring what we make and start measuring what we learn. We need to see knowledge as our most valuable export, and the people who create it, our most precious natural resource. Innovation doesn't begin in a boardroom. It begins with the actions of smart people in pursuit of new knowledge, and that's something we already have an abundance of for what it's worth.
This concludes this week's episode of for what it's worth, called addressing Canada's [00:18:00] Innovation Paradox. If you're interested in a deeper dive on the subject of innovation, I've written a number of articles, which are soon to be published on the Workplace Innovation Network for Canada's website, and they're also available on the show.
Next week, we're gonna lighten the mood a little bit with an episode of the space in between where I'll be joined by my co-host, Cameron Brown, to discuss the shows, the books, and the music that are shaping how we think and feel right now. Join us for this, that, and the other. For what it's worth.
