IF ECONOMIC REALITIES CHANGE, ARE DEPUTY MINISTERS BETTER AT ADAPTING THAN BUSINESSES?

All this came to mind this weekend when reading a companion article, also by Akin, reporting on a paper by Peter Nicholson, longtime Liberal economic guru and one of former finance minister Paul Martin’s top idea people in the early 1990s (when Martin did his best work, in fact). Published in Canadian Public Policy last November, the paper argued there are good reasons for why our now-centurylong effort to become a major innovating country has failed. Echoing the economic nationalism of the Science Council of Canada of the 1970s, Nicholson attributes it to the branch-plant nature of a Canadian economy extensively integrated into the much larger U.S. economy.

This line of argument is, of course, entirely un-innovative.

What makes it new and interesting is Nicholson’s candour in recognizing that by behaving this way, Canadian businesses have been responding to economic reality. “The incentives embedded in the North American economy,” he writes, “have been vastly more powerful than those emanating from government policy.” And a good thing, too, for the results have been excellent: “Canada’s business economy has consistently delivered one of the world’s highest standards of living,” with growth in real per capita GDP matching the U.S. over the last 25 years.

But (you knew there would be a but) “Canadian pundits nevertheless regularly express an anxiety that our underlying economic weakness will finally be exposed and the good life will suffer.” Although that “nevertheless” seems innovatively clear-headed about the uselessness of punditry, Nicholson then proceeds to currently standard predictions about megatrends: Economic power is shifting to Asia, microchips change everything (that has a 1990s ring to it, doesn’t it?), and green economies require lots of new technology offering big rewards to those who design it. In short, the reality Canadian firms have been accustomed to is changing — although do you suppose many Canadian business people really haven’t heard of Asia, computers and green?

So economic reality is changing. Maybe. These are forecasts, remember: futurology. But the main argument here is that, for a century, Canadian businesses have adapted to the reality that confronts them. If economic realities do change, who’s to say Canadian firms won’t adapt? In the meantime, who’s to say how they should prepare? Deputy ministers and their staffers who have spent several months asking around?

Here’s an example of how governments really could be useful when it comes to innovation: As can happen as you age, I’ve been spending time recently interacting with the government-run health-care system.

They sometimes want you to send them forms. The part of the system I’ve been dealing with wants the forms sent by fax. You may remember fax. It was very popular in the 1980s and 1990s.

In most of the modern world it has been replaced by scanning and email. In my neck of the woods, health-care workers treat email as if it were still experimental technology.

How about this? Once our governments finally get the health-care system they wholly own and operate out of the 20th century, then — but only then — we let them think about how private business should cope with the 21st.