Innovation in Real Places: Strategies for Prosperity in an Unforgiving World

By Dan Breznitz

Oxford University Press/2021. Winner, 2021 Balsille Prize.

Review by Teresa Marques

December 12, 2021

Greater innovation seems to be the goal for every leader in every sector, but are we approaching it in the right way? Dan Breznitz doesn’t think so. In his book Innovation in Real Places: Strategies for Prosperity in an Unforgiving World – which won the inaugural Balsille Prize for Public Policy, presented by the writer’s Trust of Canada in November – Breznitz convincingly breaks down a series of myths about innovation’s role in driving economic progress. By taking a closer look at key case studies around the world, the University of Toronto professor and co-director of the Innovation Policy Lab at the Munk School of Global Affairs and Public Policy identifies specific lessons that policymakers need to consider rather than simply rely on the existing rhetoric of innovation.

Breznitz’s overarching premise is that innovation is too often misunderstood as invention, and that this mistake has serious consequences. Whereas invention is static, innovation is dynamic, and is about actualizing ideas in different ways. According to Breznitz, this misconception has resulted in a fixation on high-tech industries, start-ups, new products and a “Silicon hyphen” model of growth creation in a way that encourages neither widespread nor long-term economic growth and mobility. It overlooks both the unique capabilities of communities and regions that should actually be capitalized on, and the ways in which global production patterns have dramatically evolved.

The anchor of the ecosystem, according to Breznitz, is as – or more – important a determinant of economic success than some key idea or innovation alone. Communities should recognize their own unique advantages and build on the kinds of innovation that rely on those regional and network strengths. He calls on policymakers to think about the various actors that make up a thriving ecosystem for innovation, including public officials, large employers, entrepreneurs, small business owners, and academia. His approach looks to generate more sustainable and deeply-rooted long-term economic growth by leveraging local strengths and partnerships.

Breznitz also argues that a singular focus on the Silicon Valley model for growth creation ignores the bigger picture of how global production (and with it, innovation) have changed. In particular, he points to the collapse of conventional vertically integrated production systems and argues that globalization’s shift to fragmented production opens new possibilities for capitalizing on innovation potential across four distinct stages. Not every stage or approach will work for all cities, regions and countries, but policies will only work by incorporating a region’s particular characteristics and ecosystems, and by building on these strengths.

(While this book was published in March, before the crisis currently besieging global supply chains struck, Breznitz co-authored the 2020 study Global Supply Chains as Drivers of Innovation in China, which makes his views on the current bottleneck well worth the search).

In the thought-provoking and engaging Innovation in Real Places, Breznitz suggests that communities should focus on where they fit within four stages of the global production process, and that different populations will excel at different stages. There is no fixed or predetermined recipe for which regions will excel in which stage of the process, or in which industry. He describes these as (1) novelty-focused or the creation of an idea; (2) design/prototype development or production engineering; (3) continuous improvement – bringing second generation products to the market or innovating on components of a product; and (4) production and assembly-based processes. In Breznitz’s view, Canada is particularly good at the first of these, but not so much when it comes to the other three.

Breznitz’s overarching premise is that innovation is too often misunderstood as invention, and that this mistake has serious consequences.

Rather than emphasizing start-ups or tech giants, Breznitz suggests that the focus be on “tech teens”: companies that are between 5-15 years old, with between 5-100 employees and some market traction. Breznitz makes the claim that more should be done to support their greater success, scaling, and the building of ecosystems around these industries. This approach could serve as a means of combatting the risk of successful high-tech companies exiting the market — a rightful cause of anxiety in Canada.

Woven throughout Innovation in Real Places is a challenge for policymakers to focus on inclusive growth as opposed to economic dynamics at the top of the food chain. Rather than doubling down on a dominant business model paradigm that encourages swift exits (and developing legislative tools related to patents and trademarking that reinforce it), Breznitz challenges policymakers to consider innovation in terms of stages of production, and focus on strategies that will build up, support and celebrate thriving innovation ecosystems.

As CEO of the Rideau Hall Foundation — the independent charitable organization founded by former Governor General David Johnston to mobilize ideas, people and resources to encourage and celebrate Canadian innovation — I spend a good part of my days not just immersed in our ever-evolving culture of innovation but building relationships with innovators themselves, especially young and burgeoning innovators. Any ideas that provide me with new insight into the nature of innovation are not just welcome but indispensable to my role at RHF. This book adds considerably to that creative process.

Those interested in the state of Canada’s culture and practice of innovation need to understand the certain advantages and ecosystems that exist within different regions of the country and how they connect to various entry points of a now fragmented global production system. Not referenced by Breznitz but reflective of this approach are two recent laureates of the Governor General’s Innovation Awards: Dr. Breanne Everett, founder of Calgary-based Orpyx Medical Technologies, which produces sensory insoles that help manage diabetic neuropathy, and Katherine Homuth, founder of Montreal-based Sheertex, manufacturer of the world’s first run-and-rip-proof tights. These are just two of several Canadian innovation success stories that are grounded in their communities, adapting as they go to local conditions, playing to their own strengths while working in collaboration with others, and on significant growth trajectories.

While Breznitz’s focus on policy levers is important, I would add that it’s incumbent on all sectors – public, private, academia and NGO – to recognize their role in fostering a more robust culture of innovation. We need a system wherein governments, academia and business sectors engage in actual experimentation and creative partnerships to support innovation, and have license and leeway to try new approaches as opposed to pursuing what’s conventional or making headlines elsewhere. This will be particularly important as we collectively figure out how to advance national interests in what is obviously as rapidly changing global economic context. To determine how Canada’s innovation culture can best evolve requires asking and answering the key question of what kind of society we ultimately want to live in, and what kind of economic growth will lead to more inclusive prosperity.

Teresa Marques is President & CEO of the Rideau Hall Foundation and member of the Advisory Committee for the University of Ottawa’s Institute of Science, Society and Policy.