RACE TO THE MIDDLE

Don’t get me wrong, I know under our soil we are rich with natural resources, but we can’t depend entirely on these commodities to maintain an expected ‘middle class’ quality of life for our future generations. This middle class is now under its greatest threat since before the Great Depression as wealth continues to accumulate at the top and the rest struggle or drop to the bottom. Although our Canadian economy is quite different, it is still relevant to know that poverty rates in the U.S. have risen to 15% – the highest levels in over fifty years. It is at this time of elevating debt levels and global unrest that our future generations need us to be bold and to take a stand…and yes, to behave in a completely ‘non Canadian’ way.

“Only those who dare to fail greatly can ever achieve greatly.” Robert F. Kennedy

It is well-known that innovation drives economic growth and that growth is necessary for the advancement of our societies. Although innovation is a hot topic these days, ultimately its prioritization is nothing new. Within our knowledge-based economy in North America, this understanding has been what has driven tax dollars towards basic and applied research at our Universities for years.

In Canada, federal and provincial governments are spending as much as $20 billion annually to support innovation in academic research and non profit government programs, providing the underpinnings for a system that ranks the highest (with Singapore) in the March release of the Kauffman Report on Global Innovation Policy for 2012. To put this in perspective, in BC alone, there are more than 70 not-for profit government supported organizations focused just on the technology industry, and yes, many of these groups are doing amazing things.

As a proud Canadian, it is fantastic to see us doing so well; however, we also know from various other reports (such as the Jenkins report “Innovation Canada: A Call to Action”) that our institutional infrastructure is not strong enough at moving these innovations into the market and realizing the economic benefit from this existing policy based infrastructure. The Centre for the Study of Living Standards noted in their April 2012 report (Stimulating Innovation: Is Canada Pursuing the Right Policies?) that 95% of innovation is generated by companies, not in government R&D programs or labs, when competition and corporate culture drive continual improvement in business models and products. It has been said that invention turns cash into ideas, and innovation turns ideas into cash.

As a country, we are rich in this government based support, but this can create a passive, polite and political mentality, and I think we, as entrepreneurial individuals, need to step out from the middle, and work to replace this passivity with a direct and forthright ‘for profit’ mentality…which can be seen as inherently un-Canadian.

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” Winston Churchill

I’m not suggesting we should adopt a ‘capitalist’ or materialistic mentality but I am suggesting we take a hard look and optimize the best from both worlds – yes we can build businesses that make the world a better place, but we can also focus on making money at the same time, and not have to apologize for that. As a culture we have to be comfortable with success and failure, but both of these are only possible under a system that supports and encourages risk and risk is not something most non-profit government based programs are comfortable with.

Ultimately it isn’t the commercial success alone that will satisfy us and stabilize our economy, but it is the innovation that comes from these successes that will help.

“Contrary to the vulgar belief that men are motivated primarily by materialistic considerations, we now see the capitalist system being discredited and destroyed all over the world, even though this system has given men the greatest material comforts.” Ayn Rand

Only when we start to measure the triple bottom line return on these policy-based investments can we really judge their effectiveness. The passive approach of hoping university research and government support spills over into commercial success hasn’t worked at the levels we need it to, perhaps emphasizing a for-profit based approach just might. People and planet seem to be front of mind for us as a culture, but without a goal of positive impact to the bottom line, the ecology of our economy isn’t sustainable.

As we all know, the only constant is change and it is a time of opportunity to welcome that change. As Canadians, I suggest we welcome, accept and even allow ourselves to celebrate stepping out from the middle.