04/13/2017 02:57 EDT | Updated 04/13/2017 02:57 EDT

Demand Data Before Demanding Innovation

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We live in a low-growth world and Canada is not immune -- we've experienced sluggish growth for much of the past decade and our GDP growth rate is not predicted to breach the coveted 3-per-cent mark without bold action now. So what do we do?

The recent federal budget set out some bold ambitions: an infrastructure bank, increasing the labour supply through immigration, increasing investments in innovation and skills.

These ideas all have merit, but if we really want to retool Canada's economy and become the "innovation nation" this Liberal government wants us to be, so far, a key piece to this puzzle is elusive: data.

Weak growth necessitates that we use all of Canada's assets to reignite our economy. Yet, data are assets that have yet to be effectively leveraged. While we fixate on the numbers of startups or high growth firms, do we really have adequate data with which to build a resilient labour force or an innovative economy?

Minister Bains has repeatedly highlighted the leading role talent plays in the innovation process. If innovation is going to be the means through which we achieve growth and talent is the driving force behind innovation, let's start by measuring this key input to growth correctly. Where do Canada's current talent gaps exist and, more pressingly, where do these gaps exist for the firms performing the innovation that leads to economic growth?

On talent, the data challenge rests almost entirely in the lack of evidence on demand: We do not know in measurable terms what the market demand is for particular skill sets or credentials. For example, we do not know for certain if we are producing too many PhDs, engineers or lawyers, or enough mechatronic technologists, marketing specialists or project managers. The result is an overproduction of individuals in possession of credentials or skill sets the market cannot absorb, even as we clamour for international talent to spur innovation.

Using credentials as a signal for productivity has serious implications. It leaves individuals with high levels of academic achievement working jobs far below their skill sets. A recent Statistics Canada survey on overqualification states that 40 per cent of university graduates outside management occupations are considered to be overqualified for their positions.

Further, innovation is a people-driven activity, so shouldn't we know what type of talent is in demand by the companies performing innovation? Our approach so far seems to indicate that PhDs in STEM (science, technology, engineering and mathematics) subjects hold a monopoly on R&D and innovation, but innovation is a team sport. We need the contributions of undergraduates and technologists as much as we need doctoral students and researchers. As the government begins to implement the many facets of its Innovation and Skills Plan, the case for evidence-based decision-making is urgent.

In Canada, we decry our underproduction of PhDs relative to global counterparts. Implicit is the assumption that this inhibits our ability to innovate - but what do the data suggest? Data from the 2011 Review of Federal Support for R&D show that Canadian firms use individuals holding technologist designations, BAs, and Master's degrees more than they use PhDs for R&D. This is the type of demand-side data we need to collect year over year.

Such evidence adds nuance to discussions around credentials. Depending on who you talk to, there is an alphabet soup of credentials in demand: STEM+B (business), or STEM+D (arts and design). Before we move ahead and say we need more of such talent, our first step should be to collect the data about demand for it.

Productivity and growth do not occur when our workers cannot effectively put to use the full extent of their education or training. Higher education institutions that respond to market demand such as polytechnics and colleges, urgently need these indicators of demand to improve the quantity and quality in the supply of the talent that industry is seeking.

As we seek to move Canada beyond 2-per-cent growth, let's remember that public policy can't be built on hunch or anecdote. To attack Canada's growth challenge, more data are needed to unlock the barriers to commercialization of research and labour productivity.

What are the skills in demand, by industry sector and region? Are we certain that made-in-Canada talent is in short supply, or would better labour market data help companies to locate the talent they need right here at home? Can governments help people and employers make informed choices about education and training, about hiring and innovation? Federal funding for labour market information was sadly missing from an otherwise smart suite of initiatives for skills and training.

Building a talented, innovative work force is a gradual process and will not happen overnight. We need to demand data before we demand innovation.

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