Prosperity and Productivity Through Innovation

by David Zussman

CanWin 2005 was a thought provoking leadership forum held in December that featured public and private sector leaders from Canada, the US and Ireland discussing the linkages between innovation and productivity in Canada. The annual event, sponsored by The Conference Board of Canada and Microsoft, is designed to stimulate dialogue on public policy issues.

Professor Richard Florida presented his observations about the emergence of a ‘creative class’ of workers that is transforming the workplace and is contributing to the success or failure of regions to become innovative work environments. Ontario Premier Dalton McGuinty provided a number of practical examples on how his government is providing leadership and programs designed to make Ontario a more innovative and productive province.

Steve Ballmer, the CEO of Microsoft, provided a number of provocative comments about innovation by devoting most of his remarks to describing Microsoft’s efforts to ensure the company remains among the most innovative in the world by investing in the recruitment and development of its employees. In his view, innovation is less a matter of technology and more an issue of developing a climate of innovation and risk-taking in organizations.

It was interesting to note the apparent symmetry in many of the speaker’s observations. The consensus that appeared to emerge regarding the innovation challenges facing Canada is noteworthy given the likelihood that a new government will be looking for answers to the innovation and productivity question.

Over the course of the day, there were many practical and forward-looking ideas proposed for the consideration of participants. Here is a brief summary of ideas that appeared to be supported by the participants.

1. As a starting point, most participants recognized the important link between generating innovation in organizations and the management of human resources. In general terms, the discussion centred on how companies can develop innovative employees (largely drawn from the emerging group of ‘creative employees’). Some of the discussion focused on ways to encourage employee and corporate risk-taking without putting the whole enterprise at risk. Speakers addressed this issue by emphasizing the importance of recruiting employees who seek out creative solutions to workplace challenges, developing a work environment that fosters teamwork and uses incentives in a judicious way.

2. By the end of the conference, the participants seemed to recognize the importance of small- and medium-sized enterprises in Canada. Since most of the conference participants work for large corporations or government departments, few practical solutions to encourage more SME innovation were offered. A consensus did emerge that this is an area where some creative public policy might be developed since market forces alone are not likely to produce significantly more innovation in small- and medium-sized Canadian companies.

3. It also was recognized that innovation would be greatly facilitated in Canada if all stakeholders drawn from the public and private sectors collaborated towards a common objective. Collaboration would lever the entrepreneurial strengths found in the private sector with the strategic direction and financial incentives provided by governments.

4. Building on a collaborative framework, there also appeared to be consensus that governments have a key role in setting the regulatory framework that encourages investment in those industries that can take advantage of innovation. There was strong support for the federal government’s smart regulation initiative although some concerns were raised that the effort had lost some momentum in the past year. Further, many participants argued that government could play a more active role by investing in those sectors of the economy where there is a strategic rationale for government involvement.

5. Finally, all speakers emphasized the need for strong leadership in the private and public sector. Innovation is often the result of small decisions and actions taken by a number of individuals, most of who work in isolation from one another. While competitive markets produce the most innovative companies, there was an expressed desire that Canada’s business and political leadership work more closely together to encourage an environment of experimentation and risk-taking in both the private and public sectors.


David Zussman, PhD, holds the Jarislowsky Chair in Public Sector Management at the University of Ottawa. For the complete proceedings of the conference, visit www.microsoft.ca/canwin2005.