Federal Strategy and Management

Innovation, productivity, and competitiveness must be top priorities for Canada’s next federal government, not sidenotes or vague aspirations to be addressed with little more than lip service.

Legislated procurement targets for SMEs should be a tool to stimulate technology R&D and commercialize Canadian innovations, and not a goal in and of itself. Focusing on firms that develop innovative solutions for government problems will create opportunities for Canadian firms to scale up and drive innovation, productivity, and competitiveness.

Canada needs a productivity commission. But instead of emulating Australia’s model, which is driven by orthodox neoclassical economics, it should take guidance from “productionists” with a deep understanding of firm, industry, and technology dynamics.

On the Australian Productivity Commission’s watch, productivity growth in Australia over the last two decades is at its lowest for 60 years, with accompanying real wage stagnation.

The word “innovation” appears a total of 97 times and “productivity” 63 times in Canada’s 2024 federal budget, and many measures targeted towards innovation and productivity reflect that focus. However, some of the funds being disbursed are tangential at best to actually addressing Canada’s declining productivity and supporting Canada’s innovation ecosystem.

It’s time to move from an Economic Statecraft 1.0 premised on using U.S. strength to support friends and punish adversaries, to an Economic Statecraft 2.0 premised on husbanding U.S. strength while limiting the relative techno-economic advance of China.

Accelerating the construction of semiconductor facilities requires thinking in terms of “let’s get it done,” not “let’s cover every base and limit every liability.”

As Daniel Castro writes for RealClearMarkets, Canada's major technology policy initiatives over the past year have been discriminatory policies targeting the tech sector, especially foreign companies.

The United States is essentially defenseless against the kind of mercantilist aggression it now faces from China. Congress should respond by funding university programs and career training programs that focus on economic warfighting, which is distinct from learning about foreign affairs, economics, or military affairs.

We live in a world where, if the United States wants to avoid sinking further into economic weakness, all levels of government need to be in regular communication with one another to improve their alignment.