Does Canada Have an Innovation Problem?

Does Canada Have an Innovation Problem?

If you ask one of Canada’s premier economic thinkers, he will tell you it’s a lack of innovation

“We are amazingly good in invention,” Dan Breznitz, the current Clifford Clark Visiting Economist at the Canadian Department of Finance, says. “We are good at coming up with great new ideas and new research, but really bad at creating companies, jobs and growth out of our own ideas.”

Breznitz argues in his recent book, Innovation in Real Places: Strategies for Prosperity in an Unforgiving World, that without better innovation policy large, successful companies like Shopify are less likely to be founded in places like Canada. To remedy this, he says, everyone from local officials to individual business owners should think about where they fit in the global production process and not try to emulate the “Silicon Valley formula”.

“The model of Silicon Valley - if you want to be really cynical - is not to create a Shopify or Alphabet,” Breznitz, who is also a professor at the University of Toronto where he serves as the Munk Chair of Innovation Studies, says. “It is to create as many companies that you can sell. The industry is based around the creation and selling of companies, not on innovation.”

Breznitz says it’s easy to conflate the two ideas: invention and innovation. But the difference, he says, is crucial for both business leaders and elected officials to grasp. 

“So invention is, if I take you back to my lab at the University of Toronto, we sit down and come up with new technology. We might even do a prototype and get patents,” Breznitz says. “Innovation happens when we try to … create products or improve on products or services.

Breznitz gives a lot of examples of this in his book, such as the telephone or the bicycle. 

“Bikes are a technology that’s two centuries old,” Breznitz says. “… and yet a Taiwanese company, by figuring out how to use carbon fiber for the frames, suddenly could offer mountain bikes that everybody could use, not just athletes. That’s innovation.”

One of the first steps he recommends is “decentralizing innovation.” For entrepreneurs and founders who don’t live in a tech hub or a business hub, it’s important to understand what special niche they might fill in the global marketplace. 

“In every industry, you work in stages. There are places that are tech or business hubs but there are places that will look at a great idea and actually know how to make it into reality or know how to produce it cheaper,” Breznitz says. “You have to understand that we live in a global system.” 

To hear more about how entrepreneurs and community leaders in Canada can supercharge the innovation economy, take a listen to Breznitz’s full interview as part of our Learn with Shopify series below: 


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