The Canadian Federal government is emphasizing support for innovation as a big theme in its second federal budget that is likely to be tabled in March 2017. Dr. Peter Nicholson has been meeting with key players in Trudeau’s government to figure out how to break the 100-year run of federal failure to encourage Canadian firms to be more innovative. “Innovative is not a prominent feature of this country’s global brand,” Peter Nicholson concludes in his paper, published in the November 2016 edition of the academic journal Canadian Public Policy.

Sometime the actions of the federal government send a completely contrarian message to innovation as in the largely ineffective Bombardier and auto industry handouts. Governments are not good at picking winners. That’ been tried on many occasions in Canada and elsewhere with disastrous results. Anyone remember Newfoundland chocolates? “Diversifying Alberta’s economy is not complicated” lists Alberta’s history of multi-million dollar losses from the provincial government’s many attempts to pick winners.

Notwithstanding some disappointing history and contrarian examples, innovation in Information and Communications Technology (ICT), with modest government support, can make a huge contribution to accelerating innovation for the benefit of all Canadians and likely many others on the planet.

I’m not the only one thinking along these lines. “ITAC wants Canada to become a leader in cybersecurity, IoT, and the cloud”. Here are some examples where I think modest support, to pursue ICT innovations, can produce a significant benefits.

The Internet of Things

The Internet of Things (IoT) has received huge media coverage in recent years. IoT offers huge opportunities for business improvement in all sectors of the economy. Here’s a quick IoT summary. A recent example, “HPE and Nokia partner for new IoT smart city solutions” discusses how IoT benefits cities. IoT has benefited from significant hardware and software cost reduction developments, better promotion and lots of hype.

However, there is much more work to be done develop IoT technology further. For example:

  1. Although IoT devices have benefited from significant hardware and software cost reductions, there are further opportunities to reduce manufacturing cost, electrical power consumption, and heat generation.
  2. The adoption of IoT devices is impeded by a plethora of incompatible industrial automation protocols. Because of deep Canadian expertise in DCS/SCADA, the predecessor of IoT, we are well-positioned to develop the next generation of protocols that will offer simpler interoperability.
  3. D-Wave, a Canadian company is building leading-edge, quantum computers for an impressive client list. Unlike traditional computers, which perform calculations using bits binary — that is, bits that either represent a 1 or 0 — the bits in a quantum computer can represent both states at the same time. Researchers say they can exploit this behavior to perform more complex computations than traditional computers, and perform them much faster, as well. This hardware technology can help organizations make sense of the avalanche of data that IoT devices generate.
  4. Individual IoT devices are designed using a selection of standards that comprise a technology stack. The huge number of overlapping choices, as summarized in this overview, cries out for rationalization.

Canada can position itself to more aggressively support these IoT innovation opportunities that will have global impact.

Operating systems

General Electric is developing Predix to become the dominant operating system for the Industrial Internet. By connecting industrial equipment and IoT devices, analyzing data, and delivering real-time insights, Predix-based apps are enabling higher levels of performance of both GE and non-GE equipment.

Siemens is marketing MindSphere, its cloud-based, open IoT operating system. MindSphere is intended to support the digital transformation of companies regardless of industry or size.

Siemens’s focus is more on software tailored to industry verticals, such as health care and manufacturing, rather than on a horizontal platform, like GE’s Predix, that is intended to fit all sectors.

QNX is a successful Canadian operating system that is well known in the automotive industry but has so far not achieved a global mindshare. QNX is a commercial Unix-like real-time operating system that is aimed primarily at the embedded systems market that includes IoT devices.

Kaspersky releases secure IoT operating system for developers is an example of innovate IoT software has the potential to have a huge impact. It could just as easily have been developed in Canada.

Canada can choose to support these innovation initiatives that will help us regain our competitiveness in manufacturing.

R&D support programs

The federal government offers two incentive programs to facilitate companies to enhance research and development. There’s the Industrial Research Assistance Program (IRAP) and the Scientific Research and Experimental Development (SR&ED). Both programs are designed to help businesses conduct research and development to increase economic growth.

In 2012 Ottawa cut $770 million annually from the SR&ED Investment Tax Credit program from the roughly $3 billion in annual tax reduction that SR&ED was costing.

Perhaps the easiest way to incent innovation in Canada is to restore this cut.

Innovation centres

Often fostering innovation isn’t about throwing tons of money around. It’s about bringing together the right people, in the right atmosphere, in the right facility and letting brainstorming, creativity and interaction among the innovators do the rest.

General Electric understands this model and established the GE Customer Innovation Centre (CIC) in Calgary, Alberta. IBM has similarly established Innovation Centers. Microsoft Innovation Centers (MICs) are located in many countries. Zone Startups is an example of several startup accelerators that make connections, provide access to experienced mentors, and consult with corporate clients seeking innovative solutions.

A cheap way to foster innovation in Canada is to build more of these centres.

Conclusion

The bottom line is that innovation is most valuable for Canada when the focus is on profitable applications while avoiding a focus on esoteric technology. This pragmatism is well explained in How to make money from the Internet of Things.

What are your ICT ideas that can contribute to accelerating Canadian innovation?



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