Ottawa could learn a lot from Israel, which has been uniquely successful at marshalling the power of government to drive private sector research and developmentGetty Images/iStockphoto
Israel might not seem like an obvious model for Canada – for anything. It's a small unitary state with few natural resources and locked in perpetual conflict with its Arab neighbours.
But the country is also a global leader in putting innovation and entrepreneurship at the core of its economic strategy. And on that score, Canada has much to learn from a country dubbed the Startup Nation.
A good start for Canada would be to take a look at Israel's office of the chief scientist – a post that centralizes a wide array of functions related to research-and-development policy and spending. In this country, it's a job spread over dozens of departments and agencies, even multiple levels of government.
Meet Avi Hasson, Israel's chief scientist. (Spoiler alert: He's not actually a scientist). The 45-year-old Mr. Hasson is a former venture capitalist, tech executive and military intelligence officer. He heads an agency with a budget of roughly $450-million (U.S.), and a modest staff of fewer than 150 people, many drawn from the technology and startup world.
"Innovation and technology are a natural resource, a national treasure of Israel," Mr. Hasson explained during a stop in Ottawa last week. "Our job is to manage that resource and create that infrastructure."
Mr. Hasson's office doles out venture capital, sponsors R&D, funds collaborative research around the world and develops innovation policy for the government, including tax incentives.
In Canada, Prime Minister Justin Trudeau is talking up innovation. He renamed the venerable Industry department as the Department of Innovation, Science and Economic Development. And he handed its Minister, Navdeep Bains, the job of crafting a new "Innovation Agenda" for the country, including spending and tax measures to drive technological innovation.
At the World Economic Forum in Davos, Switzerland, Mr. Trudeau talked about shifting Canada's image to a country known more for its "resourcefulness" than its resources.
It will take much more than happy talk. Previous governments have made similar commitments to innovation, with limited success.
Ottawa could learn a lot from Israel, which has been uniquely successful at marshalling the power of government to drive private sector research and development.
Israel's efforts have spawned hundreds of technology startups, many of which have grown into multinationals. Israel leads the world in R&D spending at 4.2 per cent of GDP. Over the past couple of decades, the country has doubled that ratio even as the economy has doubled in size. Canada is going in the other direction, with total R&D spending falling to 1.6 per cent of GDP from more than 2 per cent since the early 2000s.
Mr. Hasson was in Ottawa , meeting Canadian officials and checking up on various joint Canada-Israel R&D projects, including a $14-million project to develop a smart power grid management system for construction company EllisDon and the deployment of Israeli desalination technology in the oil sands.
"There was a keen interest to hear about our model," Mr. Hasson remarked. "People were listening. People are curious about the office of the chief scientist. It's a model that is interesting in its structure."
Singapore and South Korea have borrowed heavily from Israel's R&D policies. Israel also has a rapidly growing relationship with China
Mr. Hasson acknowledged that countries can't just "cut and paste" what works in Israel. Nonetheless, there are some fundamental principles that guide his office, including a government-wide commitment to innovation, keeping politics out of R&D and a willingness to take on risks that the private sector won't.
"Companies don't come to us with their bread-and-butter projects, their regular R&D," he said. "But when their project is high-risk, technologically or because it's long-term, they come to us."
Israel's technology landscape has matured, forcing the government to evolve the role of the chief scientist. Many of its roughly 3,000 tech startups have grown up and crossed the crucial $1-billion value threshold, companies such as Check Point, Mobileye and CyberArk. The country is a magnet for global venture capital, with $4.5-billion invested in Israel last year. Government spending now makes up just 5 per cent of R&D in the country, compared with more than 20 per cent in the 1990s.
"We can't do everything," Mr. Hasson said of the government's diminished role. "We have to be more selective in what we do."
The same goes for Canada, where government R&D efforts are too often spread thinly across industries and a vast geography – for political, rather than economic reasons.
Canada also has much to learn from Israel about having a relentless, long-term, government-wide commitment to innovation, and one individual tasked with making it all happen.