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Innovation Economy

By Chooi Law Professional Corporation | 

The ‘Innovation Economy’ is here to stay ...

The 2016 World Economic Forum (WEF) meeting has just concluded in Davos and it is always interesting to note the key issues or trends that were discussed there. Undoubtedly, the WEF has its fair share of supporters and detractors. However, as a past participant, I can certainly vouch that the WEF is an amazing event to attend – not just in terms of the people you meet and the breadth and depth of ideas being discussed but it is also a forum that inspires in that there is a shared sense of responsibility and the collective will to want to try to tackle some of the world’s most challenging problems. It is an awesome gathering but as with all meetings, there must be action once the talking is done.

What particularly struck me about this year’s Davos event was the message from Canadian Prime Minister Justin Trudeau to the world at large – the importance of diversity, inclusiveness and its impact on innovation. Here in Canada, we have seen these same messages translated into government action and from the various conversations that I’ve had, there is certainly more optimism in the technology sector than ever before.

Why is innovation so important?

In the technology driven world that we live in today, we see the digital influx in every sphere of our lives – whether it is in our workplace, our homes, our cars, our lifestyle and even our health. Going forward, the impact which technology and innovation will have upon our lives is likely to increase, and not decrease. It is therefore not surprising that many more governments around the world are talking about their innovation economy and making this a focal point of their economic and strategic planning. Why has innovation become such an important topic? Generally, the conversation often revolves around:

  • increased investments in research and innovation will, in the long term, create new businesses, new job opportunities and revenue streams as well as lead to economic growth
  • this new economy will be a catalyst to attract new talent into the work force and retain the best of our home grown talent and
  • innovative products and services will continue to impact lives and enhance productivity and individual well-being, especially in the areas of healthcare and the environment.
So, what else is happening?

We have heard all this before but perhaps what’s new is that we are seeing more positive action in areas that matter. For example:

  • New Funding: We are seeing new sources of government funding being made available to develop this new ‘innovation economy’ – this includes the recent announcement by Prime Minister Trudeau that the federal government will provide C$20 million to the Centre for Commercialization of Regenerative Medicine in Toronto to help establish a new world-class stem-cell therapy development facility, the first of its kind in the world to use a collaborative approach – between research institutions and industry – to solve cell therapy manufacturing challenges (see CBC news, January 13, 2016)
  • An Enabling Regulatory Framework: There are signs that new regulations are trying to keep pace with innovation and doing its part to facilitate technology growth instead of inhibiting it. Whilst the new shared economy in the likes of Uber have caused various disruptions to traditional sectors such as transportation, it is interesting to see regulators attempting to create a level playing field that balances the need to regulate versus facilitating innovation. We are seeing this trend in Singapore which introduced the new Third-Party Taxi Booking Service Providers Act 2015 to regulate Uber and more recently, the city of Edmonton in Canada decided to endorse a bylaw that will legalize Uber and impose some minimum conditions to be complied with
  • Innovation Clusters: A number of innovation clusters continue to grow, both in this part of the world and elsewhere. We all know about Silicon Valley, New York City and Boston and here in Canada, there’s Toronto, Vancouver, Waterloo and we are seeing increased start-up activity in Ottawa. Elsewhere in Asia, the more well-known cities are Singapore, Bangalore, Seoul and with many cities in China starting to catch up on this front. According to the report “The New ‘Cluster Moment’: How Regional Innovation Clusters Can Foster the Next Economy” by Mark Muro and Bruce Katz, these ‘strong clusters foster innovation through dense knowledge flows and spillovers strengthen entrepreneurship by boosting new enterprise formation and start-up survival, enhance productivity, income-levels, and employment growth’ and
  • Emerging Trends: The level of innovation is contributing to exponential growth in the internet of things (IoT), big data and analytics, cognitive computing and a growing number of ‘smart cities’. As an example, the Canadian market for IoT solutions is projected to increase from C$5 billion in 2013 to about C$21.1 billion in 2018 (see the Information Technology Association of Canada report titled ‘Canada’s ICT Sector and the Digital Economy’, published in 2015).

Overall, there is a sense of optimism with what’s happening in the innovation economy and so long as policy and regulation continue to take a pragmatic approach and provide an enabling environment for new businesses to grow, the future does seem somewhat promising.