Innovation Within Other Systems
Housing policy is innovation policy
Over the last few months, I’ve been working on a report that explores place-based innovation in Canada. One of its key thrusts is that there is no single “Canadian” innovation economy. Instead, multiple types of innovation economies are rooted in places and communities across the country.
Each of these types of economies has its own strengths and challenges. Some are communities that are former industrial powerhouses and are struggling with economic transitions. Others are university cities that have high levels of R&D going on, but poor local absorptive capacity that leads to lagging commercialization and economic growth.
The report also tries to explore in some depth some of what I have written about here over recent months—how innovation sits within other economic systems and that we need to understand them if we are to improve innovation outcomes. Most notably, this encompasses the set of policies that you can broadly characterize as neoliberalism (shareholder primacy, free trade, lax competition policy, weakened state capacity, tax cuts, etc.).
Thinking about how innovation fits within these wider systems forces a change in perspective. It gets you closer to some kind of root cause analysis, where you actually understand the unlying causes for our poor innovation performance. If we want to move our economy towards one that utilizes innovation to deliver broad-based prosperity, then we have to understand and tackle these systems. No innovation program or policy will move the needle otherwise.
Canada’s economy is not at all set up to pursue innovation that yields broad-based benefits.
If you look at innovation in this way, it rapidly becomes quite clear that, contrary to all the talk of the importance of innovation, Canada’s economy is not at all set up to pursue innovation that yields broad-based benefits.
This is not because we lack a culture of innovation or are too risk-averse—reasons that often get bandied about.
Instead, our economy is built on extraction, not production, on insecurity and precarity, not security.
Innovation is disruptive. It challenges existing economic power, political power, and geopolitical power.
The way Canada’s economy works suppresses innovation that would disrupt existing incumbents. Economic gains flow primarily to a narrow elite, reinforcing their existing power.
Where research and innovation do happen, they often benefit foreign multinationals, who account for almost 44% of all corporate R&D spending in Canada. Even the R&D that happens outside of MNEs often benefits them when Canadian firms are bought out, reinforcing Canadian economic subservience to the US.
Changing this requires tackling the causes of extraction, insecurity, and precarity head-on.
Returning to our place-based economies, one of the main ways we can support innovation in communities across Canada, from big cities like Vancouver and Toronto, through Red Deer and Barrie, to Sherbrooke and St John’s, is by investing in what makes them affordable, nice places to live in the first place.
Create communities where housing is a right, not an asset, where public spaces are cherished, where culture is a priority, and you create livable communities that people want to call home. Where they can take risks and build deep connections and relationships - the grist to innovation’s mill.
As Astra Taylor has argued:
Security, particularly the material security of reliable access to food, water, shelter, medical care, welfare, protection from violence, and a habitable environment, must be understood as foundational to freedom, equality, and democracy, not an afterthought. […] The security of having our needs met allows us to have real autonomy and creative agency in the world.
If we want innovation, we must be far more concerned with ending extraction and providing material security for all.