Making Canada Relevant Again- The Economic Super-Thread

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, is an interesting and, I hope, provocative article by John Ibbitson on the always difficult subject of the $17 Billion equalization programme (1% of Canada's total GDP and nearly 6% of federal government revenues or expenses (which are about the same since the budget is (roughly) balanced):

http://www.theglobeandmail.com/news/politics/globe-politics-insider/as-wynne-and-notley-battle-harper-wall-tries-to-push-crucial-debate/article25891068/

Forget Wynne and Notley battling Harper, and pay attention to Brad Wall

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John Ibbitson
The Globe and Mail

Published Saturday, Aug. 08, 2015

The feuds this week between Premiers Kathleen Wynne of Ontario and Rachel Notley of Alberta and Conservative Leader Stephen Harper have been public and nasty.

But it’s Saskatchewan Premier Brad Wall people should be listening to. If they did, this election might actually advance an important debate over a roadblock that threatens this country’s peace and prosperity.

Mr. Harper’s and Ms. Wynne’s relentless criticism of each other – it was her turn Friday, when she told reporters, “We need someone in that chair, as prime minister, who understands that working with provinces … is important to the country” – makes perfect sense. The Ontario and federal Liberals are so intimately connected, sharing databases and party militants, that it’s only natural Ms. Wynne would be part of the federal Liberal campaign, and that the federal Conservatives would take her on.

In describing Ms. Notley’s fiscal policies as “a disaster” in a campaign speech, Mr. Harper was no doubt encouraging party activists in Alberta to work harder, especially in Edmonton, where the NDP is challenging the Tories. If so, job done. Ms. Notley, in rejecting his criticism, showed commendable restraint. Both sides will now move on.

Brad Wall’s comments are far more interesting. The Quebec government is threatening to veto the Energy East pipeline that would send oil from Saskatchewan and Alberta to terminals in Quebec City and Saint John unless environmental concerns are met – the so-called social licence.

Mr. Wall responded that the money Saskatchewan and Alberta contribute, and Quebec receives, through the equalization program is “a pretty good social licence.” And earlier this week he turned on the equalization program itself, saying, “It is a lot of money to go out in a way that seems to be dated and not always efficient.”

In an interview Friday with The Globe and Mail, Mr. Wall stressed that he was not attempting to link the money that “have” provinces such as Saskatchewan and Alberta send to “have not” provinces such as Quebec through equalization with Quebec’s unwillingness to support Energy East.

But “I do think Western Canadians think that, in order to keep things going, and to be able to keep contributing as we are … we need to get our product to market,” he added. As for equalization, “if we can’t debate it, or have a chat about it, in an interminable election campaign, when can we?” he asked.

Saying this was only “blue sky” thinking, the Saskatchewan Premier wondered why hydro-generated revenue such as Quebec produces was treated differently, to Quebec’s benefit, from oil-generated revenue in Alberta and Saskatchewan, under the equalization formula.

He wondered whether the $17-billion equalization program could be divided in two, with half the money going to help the stressed operational budgets of the Maritime provinces and the rest going to national infrastructure programs, or to tax incentives to encourage innovation.

Nova Scotia Premier Stephen McNeil is not impressed with Mr. Wall’s speculation. “He looks for an opportunity for a headline any chance he gets,” he retorted Thursday. “But to be perfectly frank, it doesn’t help the national debate.”

Mr. Wall, in response, acknowledged “this is an incendiary issue” that different regions of the country view differently, and that the federal party leaders don’t want to touch. “But I wish they would.”

The Premier has a point. Is every one of the equalization program’s $17-billion being spent in the best possible way, in the national interest, with the least possible amount of waste?

What rights do provinces have to impair the economic development of other provinces? What obligations do have and have-not provinces have to each other?

What are the roles and responsibilities of the federal government in guiding infrastructure projects that cross provincial boundaries? What would the Liberals or NDP do differently than the Conservatives? And is “I’d work co-operatively with the premiers to (fill in the blank)” a sufficient answer?

Voters may be very interested in hearing how the federal leaders answer all of those questions.

First: a reminder that §36(2) of the Constitution Act, 1982 says: "Parliament and the government of Canada are committed to the principle of making Equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation."

Second: there is how, in 2012/13 equalization worked:

          Province                  Received
          Quebec                    ($7.833 billion)
          Ontario                    ($3.169 billion)
          Manitoba                  ($1.792 billion)
          New Brunswick          ($1.513 billion)
          Nova Scotia              ($1.458 billion)
          Prince Edward Island ($  340 million)

That means that Alberta, British Columbia, Newfoundland and Labrador, and Saskatchewan paid the $16+ Billion in 2012/13.

 

[Brad Sallows]

There is an important distinction which sometimes gets lost in the fight over equalization payments.  Provinces are not contributors.  Only the various sources of federal revenue are contributors; this means, primarily, Canadians.  A NB taxpayer earning X and a BC taxpayer earning X pay (ceteris paribus) the same federal income and sales taxes, but the NB taxpayer likely pays higher provincial income and sales taxes.  Nevertheless, because the formulae for determining revenue-generating capability find NB to overall be at a relative disadvantage (weaker tax base, hence lower revenues despite taxing it more heavily), the federal government throws some money into a pot.

I don't have a strong feeling one way or the other about equalization - I haven't really taken the time to think it through - but I strongly favour the principle of not binding the mouths of the kine that tread the grain.  Shut up and get out of the way.

The more Wynne opens her mouth to directly or indirectly beg for someone else to solve her fiscal problems, the more foolish I think she is.  If she doesn't take advantage of the tax points Harper has left on the table soon, she could find herself stuck with a non-CPC government that has better things to do than take heat for raising taxes and allow Wynne to enjoy spending the money, and stuck having to raise ON taxes after the feds have already increased some taxes and raised the temperature of ON voters.

 

[Infanteer]

All you could ever want on equalization.

http://thoughtundermined.com/2012/04/24/equalization-misconceptions/

 

[a_majoor]

Over many posts and in many threads, Edward has been on about the idea that *we* need to increase our productivity, but as Canadians, have been pretty terible at it. This long articel by "The American Interest" talks about how DARPA has used innovative structures, iincentives and thinking to become "the" agancy which has developed and shepherded more innovative ideas and products into service and the US market than anyone else.

This model could be emulated by many of our own government bureaucracies and large corporations to move ideas from concepts to marketable goods and serivces, which would help solve the productivity problem that Edward has told us about, and help raise Canada's standard of living and economic growth prospects in the bargain:

http://www.the-american-interest.com/2015/08/01/all-that-darpa-can-be/

Part 1

All That DARPA Can Be
William B. Bonvillian

How DARPA has organized itself for innovation bears lessons for the U.S. economy that are more useful than the innovations themselves.
As World War II proceeded toward its second year and the U.S. production machine began to ship “Lend-Lease” war supplies to Britain, an enduring transfer was occurring in the opposite direction. In August 1940, British science leader Henry Tizard landed in Halifax and took a train to Washington, leading a small scientific team on a multi-month mission. In a suitcase they carried perhaps the most critical technology of the war: an early prototype of the microwave radar.

As important as the technology was, the innovation organization model that produced it turned out to be more important still. An American team led by industrial organizer and technologist Alfred Loomis and reporting to Vannevar Bush, FDR’s science czar, not only replicated the technology but also grasped—first at MIT’s Rad Lab and later at Los Alamos—the organizational lessons: form critical innovation institutions; organize them on an “island/bridge” model; create a thinking community; and link technologists to operators.

Thirteen years after the end of the war, these lessons were translated directly into the Defense Advanced Research Projects Agency (DARPA), perhaps the most successful Federal R&D agency in U.S. history. DARPA’s achievements are legendary, but not as well understood as they might be. DARPA’s fame rests in its having innovated in “frontier” technology sectors like information. But its greatest importance, in the past and prospectively, may lie instead in its bringing innovation to a certain “legacy” sector: the U.S. military bureaucracy.1
The Defense Department is once again poised at the technological brink: Its last major technological thrust in the 1980s and 1990s, which led to precision weapons, drones, and stealth, is rapidly being replicated by potential competitor nations. Its senior leadership recently announced that it seeks a new generation of “technology offsets” to keep the U.S. edge.2 Within the five-sided fortress, needed new technologies are bound to face resistance, so a first-rate innovation organization model is essential to preserving U.S. military-technical superiority.

This kind of innovation—in human social software as opposed to mere machines—is bound to be more difficult. Launching it will be contested by vested interests appealing to arguments from authority. Legacy sectors constitute most of the U.S. economy, as it happens, cluttering the landscape of innovation in energy, medicine, education, transportation, manufacturing, and agriculture with entropy. If we can clone the DARPA organizational genius, and the system of innovation actors it is part of, to transform the U.S. military bureaucracy, that might lead the way toward transforming a great deal more.3

To put DARPA in perspective, we need to lay out briefly the five models for how innovation is organized in the United States. The most familiar model, evolved in the immediate postwar era, is the pipeline, or linear, model, developed by Vannevar Bush. Basic government-sponsored research operating at the frontiers of knowledge, largely in partnership with major research universities, leads to applied research and development, which in turn leads to invention, prototyping, and finally innovation and corresponding broad commercialization or deployment. While this process wasn’t really linear (technology influenced science as well as the other way around), “pipeline” is still the term associated with this technology-push approach. It is a model where government provides a major initial input through basic research funding, but has a very limited role thereafter, and so constitutes an inherently disconnected model, with researchers separated from industry implementers.

The second model is that of induced innovation explored by economist Vernon Ruttan. Here technological innovation responds to changes in the market, generally to market niche opportunities and price signals. It is typically industry led. New products often arise through modifications of existing technologies to meet new market needs. It is a “technology pull” model, in which incremental advances occur far more often than major breakthroughs emerging from basic research.

The third model, a variation of the first, can be called the extended pipeline. In this model, government, in the form of the U.S. Defense Department, funds both the early stages of research and follow-on stages: development, prototyping, product design, demonstration, testing, and implementation. It also serves as the initial market. The internet, for example, came about this way, as did various aspects of innovation in aviation, electronics, space, nuclear power, and computing—in other words, most of the major technology innovation domains of the late 20th century. The spread from Defense Department auspices to the market was facilitated by the fact that many corporations (in the aerospace or early computing industries, for example) participated in both national defense and other sectors. In recent decades this model has migrated from defense to commercial space services, among others. At the same time, Federal R&D expenditures have lagged, or this migration might have expanded still further.

The fourth model, manufacturing-led innovation, describes innovations in both production processes and technologies that emerge from experience and expertise in manufacturing, typically augmented by R&D closely integrated with the production process. Production, particularly the initial production stage, can be highly innovative; this is where product design is completed and a new technological advance is reworked and rethought until it becomes a product that can be made at scale and meet a market need. It involves extensive and creative engineering; the original innovation and the scientific and technological learning behind it is often completely reworked. Japan’s economic success through the creation of a quality manufacturing system in the 1970s and 1980s demonstrated the importance of this stage.
These four models exist and already work with varying degrees of efficiency. The fifth model, the innovation organization model, is a conceptual framework that includes the other four and builds on them. Its essence is that innovation requires not only technology supply and a corresponding market demand, but also organizational elements that align and link the two. The focus in the science policy literature is on idea creation; detailed evaluation of implementation is largely ignored. This is a problem, especially in legacy domains of the economy. Frontier innovation need not confront a phalanx of inertia and habit; by definition, legacy innovation must.Frontier innovation need not confront a phalanx of inertia and habit; by definition, legacy innovation must. This means that to design and implement a successful innovation model, we must include the full innovation ecosystem in our thinking. That, in turn, requires including not just science and technology aspects but also culture and social structures, broadly defined.

The innovation organization model, then, moves beyond the institutional “linkage” idea of the extended pipeline model to embrace a series of elements that connect public and private sectors, from research through production. It merges aspects of pipeline and induced innovation, radical and incremental, and it seeks to overcome structural barriers to innovation, particularly relevant to legacy sectors, through change agents: institutional and individual actors whose purpose is to push innovation through the sector barriers at each innovation stage.

 

[dapaterson]

[Monty Python]

Pacific or Atlantic? 

Aaaaaaaaaaaaaagh!!!!!

[/Monty Python]

You were remarkably prescient with that comment...

 

[a_majoor]

Part 2

With this we come back to DARPA: While it fits historically with the “extended pipeline” model, it has also developed features that have enabled it to innovate in the legacy defense sector. The emerging outline of an overall “innovation organization” model will be crucial as the Office of the Secretary, DARPA, and their allies embark on a new innovation strategy for “technology offsets.” This new task will illustrate key features of the innovation organization model—just what we need to reduce entropy in all our legacy economic sectors, not just defense, and increase synergy, creativity, and productivity.

There is an obvious rule functioning here: no innovations, no innovation system. Innovation entrepreneurs require not only an understanding of the overall system for its development; innovation also requires genuine new ideas with some sort of practical application. The “front end” of the innovation system is thus a necessary but not a sufficient element of innovation success and, ironically perhaps, it is a harder necessary element to bring about in legacy sectors than in out-of-the-blue frontier innovation. It means, in particular, that we must find ways to move beyond the “valley-of-death” stage between research and late-stage development—so-called because it is the place where many efforts go to die.

Consider, for example, the F-35 program.The prototypes developed at the Lockheed-Martin Skunk Works involved at least two significant innovations: qualitatively enhanced low-observable technology, and dramatic information science adaptations to a range of functions. The research stage went well, and the late-stage development of the entire platform has come around—but the middle stages were excruciating, in part because that required connecting the machines to the people who needed to be able to use them (both individual pilots and larger ensembles of operators). Innovation requires connected science and technology—linkages between innovation stages and the actors engaged with them.Innovation requires connected science and technology—linkages between innovation stages and the actors engaged with them. We must combine aspects of pipeline, induced, and the other innovation models into what Avery Sen and others call transformative innovation.

This transformational task of innovation for both frontier and legacy sectors will always depend on the front end of an innovation system—by definition for frontier sectors, but often enough for legacy sectors too. For example, in health care, incremental advances in electronic medical records could lead to dramatic improvements in efficiency (assuming we can figure out how to apply the data this will provide), but breakthrough medical devices and nano-scale drug delivery based on genomic assessments can also generate significant advances. Marrying different but simultaneously developing improvements puts a huge burden on the human organizational elements trying to apply the innovations. Similarly, in the energy sector, “smart” devices are evolving incrementally for the electric power grid, but breakthroughs in power electronics are needed, as well—and again, the organizational elements, complete with the regulatory and politics aspects they bring, represent an overarching challenge in part because there is no convening platform where all the organizational elements can plan together or transact business with each other as a unified function.

We know, thanks to DARPA and many people who have studied it, how to stimulate the front end. It requires four tasks.
1) Form critical innovation institutions. If R&D is not being conducted at an adequate scale by talented research teams, innovations will not emerge. But talent alone is not enough; talent must operate within institutional mechanisms capable of moving technology advances from idea to innovation. Critical innovation institutions represent the space where research and talent combine, where the meeting between science and technology is best organized. Arguably, there are critical science and technology institutions that can introduce not simply inventions and applications, but significant elements of entire innovation systems.

This is where DARPA takes center stage, with its history of attracting outstanding research talent and of spurring remarkable technology advances. In promoting innovations, it has long played within both frontier sectors, through its role in the information technology wave, and the defense legacy sector, through its role in such defense advances as precision strike and unmanned aerial vehicles. As the most successful U.S. R&D agency operating in the innovation space, and because it represents more of a “connected science and technology” approach than other agencies, our initial focus is on lessons that can be learned from the characteristics of the DARPA model.

Formed in 1958 by President Eisenhower to provide more unified defense R&D in light of the separate, stove-piped military services’ space programs that had helped lead to America’s Sputnik failure, DARPA became a unique entity, aimed at both avoiding and creating “technology surprise.”4 In many ways, DARPA directly inherited the connected science and technology (linking science research to implementation stages) and challenge (pursuing major mission technology challenges) organization models of the Rad Lab and Los Alamos projects. Building on the Rad Lab example, DARPA built a deeply collaborative, flat, close-knit, talented, participatory, and flexible system, oriented to breakthrough radical innovation. Its challenge model for R&D moved between fundamental and applied, creating connected science and technology and linking research, development, and prototyping with access to initial production. In other words, it followed an innovation path, not simply a discovery or invention path.

However, innovation requires not only a process of creating connected science and challenges at the institutional level; it also must operate at the personal level. People, not simply the institutions where talent and R&D come together, are innovators. At the same time, because innovation is more complex than the earlier stages of discovery and invention, it requires “great groups”, not simply individuals.5 Unlike other Federal R&D agencies, DARPA has attempted to operate at both the institutional and personal levels. It became a bridge organization connecting these two institutional and personal organizational elements.

At the heart of the DARPA rule set is what Tamara Carleton has termed a “technology visioning” process, using a “right-left” research model: Its program managers contemplate the technology breakthroughs they wish to emerge from the right end of the innovation pipeline, then go back to the left side of the pipeline to look for proposals for the breakthrough research that will get them there.6 As noted, it uses a challenge-based research model: seeking research advances that will meet significant technology challenges. It looks for revolutionary breakthroughs that could be transformative of a technology sector.

All of these elements infuse a process where agency program managers develop a vision of a technology advance that could be transformative, then work back to understand the sequence of R&D advances required to get there. If these appear in range of accomplishment, DARPA has processes that allow rapid project approvals by agency directors. This technology visioning process is very different from the way industry undertakes step-by-step downselection of technology options, known as the “stage gate” process, in which budget and market gain are factors used to select which incremental advances to pursue.7 The visioning process is also very different from the methods used by other Federal R&D organizations, which place more emphasis on research for its own sake. The visioning process is also very different from the methods used by other Federal R&D organizations, which place more emphasis on research for its own sake. In the context of attempting to bring innovation into legacy sectors, the visioning process may be particularly apt.

2) Use the Island/Bridge Model. Warren G. Bennis and Patricia Ward Biederman have argued that innovation requires locating the innovation entity on an “island” and protecting it from “the suits”, the bureaucratic pressures in larger firms or agencies that too frequently repress and unglue the innovation process.8 But there must also be a “bridge”; the innovation group must be strongly connected to supportive high-ranking decision-makers who can press the innovation forward, providing the needed resources. Sen has argued this is a foundational innovation model.9

Island/bridge from the beginning has been a key to DARPA’s success, and other innovative organizations use it as well. Lockheed’s Skunk Works, and IBM’s PC project have exemplified island/bridge at the industry level, severing innovation teams from interference from the business/bureaucratic side.10 Some of the ideas for this approach came from the way the British organized their wartime labs in the 1940s. While the Skunk Works and IBM PC groups also had strong bridges back to “mainland” decision-makers, Xerox PARC did not, and thus exemplifies the need for the bridge. DARPA exemplifies the island/bridge model at the Federal R&D agency level. It has initiated innovation in frontier sectors, particularly IT, where it operated largely outside the Pentagon’s legacy systems, working with and helping to build emerging technology private-sector firms. It has also worked within the defense legacy system. It has operated as an island there but has also used strong links with the Secretary of Defense and other senior defense leaders; these Defense decision-makers helped bridge technology advances from DARPA researchers to the implementing military services.

There are alternative models to island/bridge. In the “open innovation” approach, firms drop reliance on in-house R&D labs and reach out to groups at other, often smaller firms (through acquisitions, technology licensing, or partnerships), or at universities (by linking to public-sector funded researchers at these institutions and licensing their work or creating collaborations).11 This is primarily, however, a tool for more mature firms that are facing global competition and are less able to afford in-house R&D, or for their rivals, who are attempting to out-compete them.

Robert Rycroft and Don Kash present a similar model but broaden it, arguing that innovation requires “collaborative networks” at a series of levels that must reach outside the organization for a kind of heightened R&D situational awareness. These networks can be less face-to-face and more virtual.12 Neither approach obviates the need for an originating innovation “great group” applying an island/bridge approach.

3) Build a Thinking Community. A prerequisite for the ongoing success of the island/bridge is building a community of thought. In science, each contributor stands on the shoulders of others, building new concepts on the foundations of prior ones. Building a sizable “thinking community” has been key to DARPA’s success as a source of contributing ideas, as well as talent and political support. Composed of multiple generations of DARPA program managers and researchers working in a field DARPA has supported, this community at its best becomes a group of change agents and advocates. Building a thinking community takes time, but ultimately it reaches a density and mass where ideas start to come faster and faster. For example, in the field of nanotechnology physicist Richard Feynman arguably initiated the community with a 1959 talk entitled “There’s Plenty of Room at the Bottom.” He urged work at the smallest scale, where quantum properties operate. In 1981 Eric Drexler published the first journal article on the subject, and by 2000 more than 1,800 articles using the term nanotechnology had accumulated, showing that a thinking community had formed and was generating advances at an accelerating rate.

4) Link Technologists to Operators. Another key organizational feature of successful innovation organizations involves connecting the technologists to the operators. This approach was perhaps first exemplified by the relationship between British scientists and military users in developing radar on the eve of World War II. But their success was also recognized and replicated by U.S. scientists and operators during the war.

DARPA then further exemplified the effort to link technologists with operators and transform operations in its work on major defense technology advances. Its work on personal computing and the internet, which shattered the arm’s-length relationships in mainframe computing between technologists and operator/users, exhibits the same drive to produce technologies that connect with operators. DARPA’s Tactical Technologies Office (TTO) is specifically designed to bring technologies into military tactical systems, using rapid prototyping to transition to air, ground, and naval operators.

Perhaps the most stunning aspect of DARPA’s achievement is that it has done it all within a very conservative legacy system: the U.S. military. We could focus on the “stuff” DARPA has midwifed in computing and robotics. But DARPA would not have produced anything innovative had it not operated according to an innovative process. So cloning DARPA for non-military purposes isn’t about replicating “things” but rather its operations as an innovation organization. Put slightly differently, we need to be interested not in the picture (the output), but in the camera (the method).

Innovation doesn’t just happen. Even if the elements for a strong innovation system are assembled, someone or some entity must serve as the catalyst for change. These change agents can be persons or organizations. Change agents, like innovation itself, must operate at both the institutional and the personal, face-to-face level. As usual in human affairs, there is no substitute for leadership.
If the front end of the innovation system generally is a prerequisite to innovation in legacy sectors, then the concept of change agent is a requirement as well. So the innovation system needs strengthening, including through specific approaches cited here such as critical innovation institutions, island/bridge organization, thinking communities, and linking innovators to operators. But none of these steps alone will implement innovation, particularly in thorny legacy sectors, unless there are institutions and accompanying individuals prepared to act as change agents. Without such change agents, it is hard to see how innovations, particularly in legacy sectors, can emerge out of the innovation pipeline.

The core breakthrough technologies behind the Revolution in Military Affairs in the 1980s and 1990s illustrate that the defense sector has many of the attributes of a legacy sector: The military services resisted precision strike, stealth, and UAVs. Nevertheless, the Defense Department still found a way to put revolutionary technologies into place and bring on significant innovation. Unlike most legacy sectors where breakthrough and disruptive innovations languish, Defense actually implemented them.Unlike most legacy sectors where breakthrough and disruptive innovations languish, Defense actually implemented them. DARPA alone was not enough to press its advances into the military—it needed change agents, initially led by Defense Secretary Harold Brown and Undersecretary William Perry. If the ultimate question before us is how to create the functional equivalent of DARPA and its allies for other legacy sectors (health care, energy, education, and others), what does the history of Defense Department “offsets” approach tell us about how to do this?

 

[a_majoor]

Part 3

Stealth Aircraft: Air superiority has been a fundamental U.S. defense doctrine since World War II.13 However, by the late Vietnam War, Soviet air defense systems were making U.S. aircraft ever more vulnerable. This forced the Air Force to employ vast air armadas of mixed-purpose aircraft undertaking jamming and electronic countermeasures, chaff dropping, and radar attacks in order to protect the smaller number of aircraft that were actually undertaking the strike. As early as 1974, the Defense Department’s office of the director of defense research and engineering (DDR&E) and DARPA began discussing the development of a “Harvey” aircraft (named after the invisible rabbit in the play and film) that would have a greatly reduced radar, infrared, acoustic, and visual appearance. A Lockheed engineer, Denys Overholser, found the “stealth” answer in a Russian basic research physics paper, DDR&E leaders Malcolm Currie and then William Perry pushed the concept, and DARPA got to work on it.

Air Force leaders resisted, seeing limited value in slow and largely unmaneuverable aircraft; they had to be guaranteed that funding for their other aircraft programs would not be affected by the budget for stealth. Encouraged by Perry, Lockheed pushed ahead with the F-117; its performance against a Soviet-supplied air defense system in the Gulf War exceeded expectations. Only the combination of a critical innovation institution (DARPA), the island/bridge approach of protecting the innovators in DARPA and in Lockheed’s Skunkworks but giving them a bridge back to top Defense Department decision-makers, a thinking community organized around the challenge, and the linking of innovators and operators (at DARPA, at Skunkworks and, when they came around, at the Air Force) was able to overcome the legacy sector forces in the Pentagon. Change agents at the top of the Defense Department were critical.

Precision Strike: The mix of defense capabilities known as “precision strike” was a response to the confrontation between Cold War forces in Europe. Perry formulated precision-strike objectives as the ability to “see all high value targets on the battlefield at any time; make a direct hit on any target we can see; and destroy any target we can hit.”14 Precision strike was at the core of what became known as the Revolution in Military Affairs (RMA); it grew in significant part from Perry’s and Harold Brown’s drive to develop technology “offsets” to Soviet advantages in numbers. While armies before the RMA had relied on the massed force of as many individual weapons as possible and a few overwhelming nuclear weapons, precision-strike doctrine focused on the ability both to see and to select critical high-value targets and to cripple them rapidly in order to break down the enemy’s operating capabilities, without inflicting major casualties on either side or significant civilian casualties. While the wars Clausewitz wrote about were between mass armies inflicting mass casualties on a massive scale, the RMA used precision strike to scale this way back.

To achieve precision strike required “joint” efforts between services. Air Force and Navy weapons systems would have to work in close coordination with Army systems, which is never easy when weapons procurement remains service-controlled. Again, each of the organizing rules cited above came to bear. The Defense Department’s efforts began with DARPA working initially outside the service R&D systems, but required pressure from top DoD leaders acting as change agents to implement.

UAVs: The idea for unmanned aerial vehicles (UAVs, or drones) went through early development stages in both world wars as attack devices, before the advent of guided missiles. There were early Cold War UAV efforts by the Navy and Air Force, and efforts continued until terminated in the 1970s. Despite this halt, today’s UAVs are omnipresent on U.S. battlefield and in counterterrorist operations. They undertake a wide range of roles: reconnaissance (using cameras, sensors, and radar), electronic intelligence gathering, long-term surveillance, target designation, communications relays, and, carrying on-board weapons, attacks on specific targets. The U.S. military is approaching the point where it will have more UAVs than manned aircraft. Again, DARPA played a key role in developing the enabling technologies; in the 1970s, it funded R&D in sensors, radar, signal location systems, controls, lightweight and low-visibility airframe structures, long-endurance propulsion, and new operating concepts. Navy Secretary John Lehman, a UAV advocate, provided support for early programs.

But UAVs weren’t being developed or produced at a pace where they could make a difference; they weren’t scaling up. Using the remarkable performance of RMA technologies in the 1991 Gulf War as proof of the power of advanced technology to transform the battlefield, the Defense Science Board (the Defense Department’s leading technical advisory body) called attention to military problems that could be resolved by improved UAV capabilities. In the subsequent Clinton Administration, a trio of defense and intelligence agency leaders, Secretary of Defense William Perry, Undersecretary of Defense John Deutch, and CIA director James Woolsey, pushed for renewed UAV development. In cooperation with DARPA, a new “Advanced Concept Technology Demonstration” (ACTD) process emerged to streamline and accelerate defense technology development and management, but with early cooperation with service users (linking innovators and operators). Perry, Deutch, Woolsey, and other DoD change agents created a new process—essentially an innovation organization model. It built on DARPA advances (using the island/bridge approach) outside the services, but it involved them in implementing new defense technologies. UAVs were the pilot for this new ACTD approach.

What, then, do these defense case studies tell us about organizing innovation in legacy sectors? It is vital, first, to bring front-end innovation capabilities to influence legacy sectors.It is vital, first, to bring front-end innovation capabilities to influence legacy sectors. An important lesson from DARPA’s ability to bring innovation into a defense sector with deep legacy characteristics has been the importance of critical innovation institutions. These institutions should attempt to embody both connected science and technology (linking scientific research to implementation stages) and challenge approaches (pursuing major mission technology challenges). Again, innovation requires not only a process of creating connected science and technology challenges at the institutional level; it also must operate at the personal level. The critical stage of innovation is face-to-face, not institutional, so while there is a need for institutions where talent and R&D come together, personal dynamics, usually embodied in great groups, are a necessity.

The DARPA “right-left” research can be important to reaching the innovation stage, where program managers contemplate the technological breakthroughs they seek to have emerge from the right end of the innovation pipeline, then go back to the left side of the pipeline to look for proposals for the breakthrough research that will get them there. This process tends to lead to revolutionary breakthroughs that could transform a technology sector. A technology “visioning” process at the outset of the effort appears to be a particular key. The approach results in seeking high-risk but high-reward projects.

As discussed, the island/bridge organizational approach for innovation institutions also appears to be important. The innovation team should be put on a protected island apart from bureaucratic influences that can ruin it, so it can focus on the innovation process. The strength of the innovation process will also depend on building a solid thinking community as a source of ideas and support. Because innovation must span numerous steps from research through initial production, means for linking technologists to operators appear to be critical.

Second, change agents will be required to move the innovation toward implementation. DARPA alone was not enough. Unlike most legacy sectors, the Defense Department has an official, the Secretary of Defense, by law a civilian, who can exercise authority to force change. If the Secretary sees the need for a technology shift, he or she can muster the power to direct it despite all the legacy-sector checks in the system. DARPA has been successful when it ties its technological advances to a senior defense leader in the Office of the Secretary who is prepared to override legacy pressures and be a change agent. Of course, the Defense Department faced an additional intense pressure for change—meeting national security needs—but these two characteristics, a strong front-end innovation system linked to change agents, remain central.

There are important lessons here for other legacy sectors: a “connected” innovation agency, using the “extended pipeline” model that is outside the legacy system, and then linked to a source of power that can direct change—a change agent—has proved to be a vital combination in the defense sector’s ability to innovate. The long-standing perspective on DARPA has been that its successes have been in the “frontier” sector; it is rightly acclaimed for its foundational role in the IT revolution. But there is a less well understood perspective on DARPA that is the other side of the coin: It has brought disruptive, radical innovation into a legacy sector’s organization routines and model too.

So DARPA doesn’t only belong in the “extended pipeline” model; it also has developed features that have enabled it to innovate in a legacy sector. It has displayed key features of the “innovation organization” model. Legacy sectors use political, technological, economic, and social system barriers in their defense against disruptive innovation. The innovation organization model recognizes that there are many institutions and mechanisms operating within an innovation system, particularly in legacy sectors. This mandates a richer evaluation of innovation and of potential policies to shift the overall system. DARPA and its senior Department allies have found ways to impose this richer mix of polices. This mix of strong front-end innovation capability and change agents provides basic lessons for innovation in other legacy sectors that go far beyond defense to other key parts of the economy.

Obviously, the Defense Department is a special environment, and the defense industry is special on account of it. DoD leaders have now embarked on a new “defense innovation initiative” to develop a new generation of “offset” technologies. They have indicated they will be pursuing major technology development efforts in cyber security, undersea capabilities, air dominance, and space. They are now at work developing technology strategies in each area. However, this effort will not bear fruit unless the lessons for innovation organization in legacy sectors from the last “offsets” strategy are studied and adapted. Since most of the economy resides in legacy sectors often in sore need of innovation advances, these lessons on “transformative innovation” also have much wider application to other sectors.

1See William B. Bonvillian and Charles Weiss, Technological Innovation in Legacy Sectors (Oxford 2015), pp. 119–34.

2Charles Hagel, The Defense Innovation Initiative, Department of Defense, November 15, 2014; Frank Kendall, Long Range Research and Development Plan (LRRDP) Direction and Tasking, Department of Defense, October 29, 2014.

3See William B. Bonvillian and Richard Van Atta, “ARPA-E and DARPA: Applying the DARPA Model to Energy Innovation”, Journal of Technology Transfer (October 2011).

4Discussion drawn from Bonvillian, The Connected Science Model in 21st Century Innovation Models (National Academy Press, 2009), pp. 207, 209, 215.

5Warren Bennis and Patricia Ward Beiderman, Organizing Genius (Basic Books, 1997).

6Carleton, The Value of Vision in Technological Innovation (Stanford University dissertation, 2010).

7See, for example, R. G., Cooper, S. J. Edgett, and E. J. Kleinschmidt, “Optimizing the Stage Gate Process”, Research Technology Management (August 2002).

8Bennis and Biederman, Organizing Genius, p. 206.

9Avery Sen, Transformative Innovation: What ‘Totally Radical’ and ‘Island-Bridge’ Mean for NOAA Research, Dissertation, George Washington University, March 2014.

10Ben Rich, Skunk Works: A Personal Memoir of My Years at Lockheed (Little Brown/Back Bay Books, 1996); Michael A. Hiltzik, Dealers of Lightening: Xerox PARC and the Dawn of the Computer Age (Harper Collins, 1999); James Chposky and Ted Leonsis, Blue Magic: The People, Power and Politics Behind the IBM Personal Computer (Facts on File, 1986).

11Henry W. Chesborough, “The Era of Open Innovation”, MIT Sloan Review (April 2003).

12Rycroft and Kash, “Innovation Policy for Complex Technologies”, Issues in Science and Technology (Fall 1999).

13Details on the three case studies here are in, Richard H. Van Atta, Alethia Cook, Ivars Gutmanis, Michael J. Lippitz, Jasper Lupo, Rob Mahoney, and Jack H. Nunn, Transformation and Transition, I, IV, VI, and in the accompanying Detailed Assessments (Institute for Defense Analysis, 2003).

14Van Atta et al., Transformation and Transition, IV-35; see generally, William J. Perry, “Perry on Precision Strike”, Air Force Magazine (April 1997).

William B. Bonvillian directs MIT’s Washington Office. He teaches on the adjunct faculty at Georgetown and Johns Hopkins-SAIS and co-authored, with Charles Weiss of Georgetown, a new book out in September, Technological Innovation in Legacy Sectors (Oxford University Press), which he drew on here. He is indebted to his co-author for numerous insights behind this article.

 

[Edward Campbell]

KAL, the editorial cartoonist in The Economist, explains that economics, at the political level, including fiscal and monetary policy, is not for the faint of heart:

                       

                        Source:http://www.economist.com/news/world-week/21662598-kals-cartoon?fsrc=scn/li/cp/kal/st/kalcartoonaug29th

 

[CougarKing]

Is Canada doomed to be just another resource base for China in the way Australia has?

Anyways, this full article shows how Australian economy has become dependent on China:

Diplomat

China and Australia: It’s the Economy, brilliant
The Australian government tried to reassure in the wake of market gyrations.

By Helen Clark
August 30, 2015

Australia’s deep ties to the fate of China’s economy and the latter’s hunger for Australian resources is well known. So the problems and gyrations in China in recent days and weeks have been watched closely here.

The plunge in the Chinese stock market earlier this week had obvious, and immediate, repercussions for Australia. The All Ordinaries fell four percent Monday, and then spent the next two days bouncing back, 2.6 percent Tuesday and another 0.6 percent Wednesday. The plunge and recovery overall were quick, with the drop the steepest in two years. The Australian dollar has meanwhile weakened further, currently trading at 71 cents to the U.S. dollar, down from the level of around 75 cents where it has been for much of the year, and a sharp decline from the parity it enjoyed a few years ago (a strength than was tough on the country’s export sector).

What does all this mean in and for Australia? Fairfax China’s correspondent, writing in the Sydney Morning Herald on Tuesday, said, “In broad strokes, anything bad for the Chinese economy is not usually good news for Australia either.”


(...SNIPPED)

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, is an article about some smart (and maybe not so smart) ideas about help the Canadian economy:

http://www.theglobeandmail.com/report-on-business/economy/nineteen-smart-ideas-to-create-a-flourishing-canadian-economy/article26345165/

Fifteen smart ideas to create a flourishing Canadian economy

ERIC ANDREW-GEE
The Globe and Mail

Last updated Saturday, Sep. 12, 2015

The Globe and Mail is hosting a debate on the economy among the leaders of the three main political parties on Thursday at 8 pm (ET). Click here for more details.

Demand for resources, and not just oil, is swooning as China’s economy slows. Manufacturing, expected to bounce back in response, is instead going sideways. Pulling things out of the ground and hammering steel have been pillars of Canada’s economy for at least a generation. But those sectors are either increasingly vulnerable to swings in global demand or finding themselves in structural decline.

Ahead of The Globe’s leader’s debate on Sept. 17, we spoke to economists and public policy gurus to come up with 19 smart ideas – some weighty, some wishful – that wring as much as possible out of the old economy and help a new economy flourish.

1. Federal government could fund apprenticeships for the tech sector.

London, Ont., is no Palo Alto. But in the seemingly unending worldwide quest to become the next Silicon Valley, the rustbelt city is looking surprisingly frisky.

Mike Moffatt – an assistant professor of business, economics, and public policy at the University of Western Ontario’s Ivey Business School spends a lot of time talking to people in London’s nascent tech sector. One of their gripes is a shortage of skilled workers: In March, there were reportedly about 1,000 job openings across London’s more than 300 tech companies.

Mr. Moffatt thinks government-sponsored tech apprenticeships could be part of the solution. Typically associated with the trades, apprenticeships would let brainy but inexperienced university students get hands-on experience making apps or solving coding glitches, while helping to plug the startups’ skills deficit.

2. Federal government could invest in sexy infrastructure like transit to make cities more livable for techies.

The tech skills shortage can’t only be chalked up to lack of training at universities. Canadian schools are churning out plenty of brilliant engineers and developers – many of whom promptly decamp to California’s Bay Area.

Stopping the brain drain is no mean task: San Francisco has great weather, ocean views, and a rich cultural fabric, not to mention all the best tech companies. But some, like Mr. Moffatt, think Canadian cities can fight back by investing in urban infrastructure, particularly transit.

Toronto’s recently unveiled renovation of the Queens Quay waterfront strip was pitched in just these terms: our cities are constantly trying to woo the kinds of clever workers who could find a job anywhere. Better put our best foot forward.

3. Reduce gridlock to make it easier for manufacturers like Cadbury in downtown Toronto to get their products to market.

To paraphrase Mark Twain: reports of Canadian manufacturing’s death have been greatly exaggerated. While it accounts for 1.7 million jobs and about 10 per cent of Canada’s GDP, the sector may be in chronic decline, but it’s still an important part of the economy.

Mr. Moffatt thinks we need to do more to help manufacturers get their products to market. That means reducing gridlock.

GTA factories, like Toronto’s Cadbury chocolate plant or Oshawa’s GM plant, suffer from particularly acute traffic woes. Road tolls, new highways, and better transit could all help unclog the commercial arteries of Canada’s biggest city.

4. Reduce border wait times.

Our border with the U.S., Canada’s biggest trading partner by far, has gotten “thicker” since Sept. 11, 2001, as security measures increase wait times, and make them less predictable.

That’s bad for exporters. “It’s something that manufacturers talk about constantly,” Mr. Moffatt said. “You never quite know how long it’s going to take to get a shipment across the border.”

Convincing the Americans to weaken border protections is a tall order, but diplomatic nagging could save Canadian businesses gobs of money.

5. Notice the world getting slicker? That’s because businesses are learning to take design seriously. If the success of Apple can teach the business world anything, it is surely that beauty matters.

BlackBerry may have gleaned that lesson too late, but other Canadian firms need not. Kevin Milligan, an associate professor at UBC’s Vancouver School of Economics (and occasional Liberal adviser), said that schools might teach the kinds of creative visual skills that inspire young techies to design the next iPhone.

After all, one of the world’s design seers is Canadian: Tyler Brûlé, founder of the magazines Monocle and Wallpaper, is the son of a CFL player.

6. Morels! They may not be an economic cure-all, but they taste great in an omelette. Morels, a coveted kind of mushroom, grow on forest floors and flourish the year after a big fire. With wildfires expected to become more common in the Canadian West, the morel harvests could be rich. The fungus sells for about $61a kilo when dried.

The very source of their profusion can make them hard to harvest: last year, an estimated $40-million worth of morels sprouted up in the wake of a bad forest fire in northern California, but the public was banned from gathering them because the flame-ravaged trees risked crushing mushroom hunters.

But the risk doesn’t dissuade everyone. Hundreds of morel fiends flocked to the Yukon in pursuit of a bumper crop in the territory last summer.

7. Offshore wind.

It’s close to the antithesis of oil sands extraction, which may be why Canada lags so far behind Europe on putting turbines offshore. Cheaper electricity prices have also put the brakes on wind power expansion here.

But there are signs that this energy segment has promise. The British-based firm GlobalData expects the industry to grow by an average of 30 per cent a year until 2020.

Meanwhile, Beothuk Energy Inc., a St. John’s-based company, has plans for a $400-million wind farm off the western coast of Newfoundland. As the world moves away from carbon-based energy, others might be wise to follow Beothuk out to sea.

8. Goose drones.

Drones can kill terrorists and deliver hardcover books, but a Canadian entrepreneur may have found a more useful métier for pilot-less aircraft: warding off Canada geese.

Steve Wambolt, an Ottawa-area photographer, has pioneered what he calls the Goosebuster, a six-rotor drone, 66 cm wide, that has successfully cleared the birds and their poop from Petrie Island, a park in the area.

Evoking American helicopters playing “Flight of the Valkyries” in Apocalypse Now, Wambolt’s drones are mounted with speakers blasting the calls of predator birds like eagles and hawks. He’s now trying to sell Ottawa City Council on the idea, though there’s been some resistance from those who are uncomfortable going to war with a Canadian icon.

9. A sovereign wealth fund for oil.

Norway has one; so does Angola. Rich and poor nations alike have clued in: sovereign wealth funds for natural resource wealth are a good idea. They temper the booms and busts of volatile commodity prices, they provide a measure of intergenerational equality, and they keep countries from succumbing to “Dutch disease,” where resource jackpots weaken the overall economy.

Some provinces have made meagre efforts towards creating such funds. Alberta’s, set up with promise in the mid-70s, has been neglected and raided for decades.

But in a February paper for the Macdonald-Laurier Institute, Greg Poelzer suggests something more radical: a federal sovereign wealth fund drawing on income tax from the mining sector, including the oil patch. The recent chaos wrought on the national economy by falling oil prices suggests he may be on to something.

10. Stem cell research.

Stem cell research was invented in 1960s Toronto. So, some researchers have asked, why not make Canada a “magnet” for such research today?

It’s a good question. The field is poised for growth. Stem cells can give rise to other cell types, helping to regenerate damaged body parts and organs. Researchers appear to be getting a handle on how to put this awesome knowledge to work.

The federal government has hinted that it sees the potential – in July, Ottawa bestowed scientists from the University of Toronto with a $114-million grant spread over seven years largely to conduct stem cell research.

But more can be done. In 2004, the state of California, with its Canada-sized population, committed $3-billion to the study of stem cells.

11. Invest in aerospace.

Canadian manufacturing is mostly associated in the public mind with cars, and with bad news. Which may be why Thomas Mulcair is trying to train sights on the country’s aerospace industry, this week pledging to hand it $160-million over four years.

It’s not that Canada’s 700 aerospace companies need help, especially. They rank third in the world in civil aircraft production. Annual revenues were at more than $25-billion in 2013. The industry directly employs about 70,000 workers.

But in contrast with the sclerotic automotive sector, aerospace is relatively high-tech and modern, devoting 20 per cent of its activity to research and development, according to a recent federal government report. That combination of old-school solidity and new-age innovation makes it an understandable target for doting politicians.

12. Tourism from China.

By the end of the year, China will probably become the second-biggest source of foreign visitors to Canada, leap-frogging Britain. A total of 107,351 Chinese visited Canada from January to April alone, up 20 per cent from last year.

But Canada is still taking a tiny slice of the Chinese tourist pie, which comprised 117 million trips abroad last year. That’s a lot of hotel rooms and CN Tower snow globes.

We could be doing more to promote ourselves in the Middle Kingdom. In May, the federal government committed to building on our tourism strengths, like the Calgary Stampede and Japanese visits to Prince Edward Island (they’re crazy for Anne of Green Gables). Perhaps we should redirect those efforts to an ad campaign in Beijing for the autumn leaves.

13. Better aboriginal education.

A well-educated population is the sine qua non of a successful modern economy. So it’s not only a humanitarian disaster, but an economic one, that Canada’s aboriginal population has such low educational attainment.

Fifty-eight per cent of First Nations people aged 20-24 living on reserves have dropped out of high school, according to the 2011 National Household Survey.

A big part of the problem, says Don Drummond, former chief economist for TD Bank, is underfunded aboriginal schools. His 2013 analysis of the issue showed the funding gap between federal aboriginal schools and public schools in Ontario was as much as $8,000 per student.

“That’s a brilliant idea, right?” he said acidly.

14. Video games.

By one estimate, Canada has the world’s biggest video gaming industry per capita. It employs 16,500 people, according to an industry group, with hubs from Burnaby, B.C., to Montreal. In hip Toronto bars, it’s possible to eavesdrop on gamer geeks plotting out the next Zelda, with talk of princesses and pots of gold.

How did we get here? Freebies, largely. Starting in Quebec, Canadian provinces have been luring video game firms with boutique tax breaks and special digital media funds. In 2014, the Ontario government doled out 23 grants worth $150,000 to gaming companies.

Cash handouts may not be the most efficient way to develop local industries, but it’s hard to argue with thousands of well-paid jobs in a growing sector.

15. Legalize marijuana.

When the sale of recreational marijuana became legal in Colorado on January 1, 2014, it unleashed an entrepreneurial free-for-all. Brownies, pain patches, medical strains called Gorilla Glue #4: weed products of every description were suddenly available for anyone 21 or older.

Naturally, the pot boom is big business. The Washington Post estimates that the industry was worth $700-million (U.S.) in 2014.

In Canada, with about six times the population of the Rocky Mountain state, it would be even bigger. Canadians love weed – we’re among the world’s biggest consumers of the drug. The Liberals favour legalization, though not primarily to spur the economy. They, and the other federal parties, should visit Colorado.

Editor's Note: An earlier version of this article incorrectly alluded to 19 ideas. This has been corrected.

Some of these ideas, notably numbers 1, 5, 6 and 8 are either whimsical or are notions that specific industrial sectors might pursue on their own. A few, 10, 11 and 14, are just ways to funnel taxpayers' money into specific industries ~ economists, like governments, are not very good at picking winners. A couple more, like 2 and 3, are ways to funnel money into infrastructure investment, but #3 gets the priority right: its aim is to improve productivity. That leaves numbers 4, 7, 9, 12, 13 and 15.

Number 4 does matter and it should be a constant theme in our ongoing, daily, discussion with US officials.

Number 7 might make for interesting, very location specific, projects for some provincial and territorial governments.

Number 9 has considerable merit, in my opinion, bur sovereign wealth funds require good, professional, private and strategic management. Money is too important to be left to the politicians.

Number 12 is a good idea, if you delete the word China. Tourism is a "good," profitable industry that does require some government support, specifically with e.g. visas. We want to make it easy for tourists (by definition people with money to spend) who do not pose security or unlawful immigration threats to Canada, to come, visit, spend and return to their homes with pleasant memories. The private sector has a lot of catching up to do here.

Number 13 ought to be a top priority.

Number 15 is, in my opinion, a good idea, but I know that some, with very valid reasons will disagree. I believe that marijuana (and prostitution) should be legalized, rather as alcohol and gambling are, despite their proven social costs. The economic calculation will, of course, depend on what costs you choose to use and how you choose to measure: some social "costs" (and benefits) are highly subjective. On balance I think M Trudeau is right, in principle, but I am 95% sure that he is right for the wrong reasons which means that his plan is wrong, in practice.

 

[Brad Sallows]

We already have (1) (co-op programs).  Results are mixed, but generally unimpressive.  Students in an intensive STEM program can not be pulled away for more than 4 months without skill fade, and you can't get much out of a student in 4 months.  Generally you wind up with a poorly built, very small piece of a non-critical component that someone else has to fix later.  We don't need to add a federal bureaucracy to try to fix that which can't be fixed.  Let universities and companies continue to do what they are already doing without interference.

(2) is an example of wishful thinking.  We will pay much more in than we ever get out.  "Sexy" is a lazy adjective meaning "attractive, but impractical".  The initiative can also be self-defeating: to create an attractive neighbourhood is to attract everyone, which eventually prices out the people wanted in the first place.

(3) and (4) are important and practical.

(5) is not a novel idea.

(6) is trivial and ridiculous.

(7) is environmentally risky (bird life).

(8) will be a greater public nuisance and hazard than the geese.

(9) is ridiculous: we have a large debt, and we should build up a wealth fund from taxes and somehow find wizards to run it?  Let the private business world be the "sovereign wealth fund" they already are, let them manage themselves, and continue to tax them.

(10), (11), (14): yes, just particular niches: someone's particular quiffs.  Anything we subsidize that is exported is simply a partial gift to foreigners.

(12) is already done.  Someone will first have to prove that what is already done is "not enough", and then quantify how much "more" is "enough".

(13) important and practical, but insoluble with merely "more money".  The kids have to want to be there; the parents have to support them and keep them there; the standards have to be set and met.  Until the cultural corrosion of "not acting white" is removed, very little will be achieved.

(15) leads to the eternal economic gain vs social harm debate.

 

[GR66]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, is an article about some smart (and maybe not so smart) ideas about help the Canadian economy:

http://www.theglobeandmail.com/report-on-business/economy/nineteen-smart-ideas-to-create-a-flourishing-canadian-economy/article26345165/

Some of these ideas, notably numbers 1, 5, 6 and 8 are either whimsical or are notions that specific industrial sectors might pursue on their own. A few, 10, 11 and 14, are just ways to funnel taxpayers' money into specific industries ~ economists, like governments, are not very good at picking winners. A couple more, like 2 and 3, are ways to funnel money into infrastructure investment, but #3 gets the priority right: its aim is to improve productivity. That leaves numbers 4, 7, 9, 12, 13 and 15.

Number 4 does matter and it should be a constant theme in our ongoing, daily, discussion with US officials.

Number 7 might make for interesting, very location specific, projects for some provincial and territorial governments.

Number 9 has considerable merit, in my opinion, bur sovereign wealth funds require good, professional, private and strategic management. Money is too important to be left to the politicians.

Number 12 is a good idea, if you delete the word China. Tourism is a "good," profitable industry that does require some government support, specifically with e.g. visas. We want to make it easy for tourists (by definition people with money to spend) who do not pose security or unlawful immigration threats to Canada, to come, visit, spend and return to their homes with pleasant memories. The private sector has a lot of catching up to do here.

Number 13 ought to be a top priority.

Number 15 is, in my opinion, a good idea, but I know that some, with very valid reasons will disagree. I believe that marijuana (and prostitution) should be legalized, rather as alcohol and gambling are, despite their proven social costs. The economic calculation will, of course, depend on what costs you choose to use and how you choose to measure: some social "costs" (and benefits) are highly subjective. On balance I think M Trudeau is right, in principle, but I am 95% sure that he is right for the wrong reasons which means that his plan is wrong, in practice.

I generally agree.

Item #1 however I think is something I think that provinces could/should encourage through their education funding policies (in a very general way).  Don't tell Universities what degrees they can and cannot offer...and don't force students to take certain programs.  However, I see no problem (and great potential merit) in the Provinces providing preferential funding to schools for those programs (e.g. engineering, medicine, pure sciences, skilled trades, etc.) which potentially can provide the greatest growth in competitive advantage for Canadian industry while providing less funding for those programs (English literature, political science, underwater basket weaving, etc.) which provide less competitive advantage.

A well balanced society still needs the 2nd group of people, but it also needs a very strong economy (provided by the first group) to be able to flourish.

Item #4 must always be a top priority for us given the huge percentage of our trade that is with the US.

Item #15 I'm torn over but fear that doing so could have a negative impact on Item #4. 

 

[a_majoor]

Overall I have to agree with Edward's take on the article. The government and bureaucrats should not be intervening in the market or picking "winners and losers", becasue they have no proper signals to read, nor do they have a vested interest in the outcomes (If a bureaucrat picks the wrong branch of the Engineering sciences to fund, he/she never faces any direct consequences, while downstream the marketplace has to make contortions to reflect the surplus/shortage of that particular specialty).

Most of the suggestions amount to special pleading for particular interests, and if you stop to think about it, even suggesting funding aborigional education should cause a head shake; if aborigional bands can provide gigantic salaries and perques to band "leaders" and their cronies, then there is more than enough money there already to pay for good quality education; it has just been misallocated.

This goes back to the idea of regulatory failure; government interventions in the marketplace cause distortions or mal incentives, causing people to make decisions that have shiort term payoffs for themselves, but create longer term distortions and issues in the greater economy. Ensuring a level playing field, transparency of information and providing neutral arbitration of contract related disputes (Courts of Law) do far more to grow the economy than any amount of "pump priming", "government investment" or regulatory interventions ever do.

 

[a_majoor]

Perhaps there needs to be a "Grand Strategy for Canada" thread. This is a very interesting look at the middle powers today, and how we stack up: (Part 1)

http://www.the-american-interest.com/2015/01/10/power-rankings-the-second-tier/

Power Rankings: The Second Tier
Walter Russell Mead & Nicholas M. Gallagher

The second part of our series on global power in 2015. This time: the aspiring powers, the regional hegemons, the has-beens and the wanna-bes.

In the first installment in this series, we profiled the “real G-7”–the countries whose global sway dominates international politics. But the great powers play aren’t alone; they play their often Machiavellian games amongst a host of allies, rising powers, and antagonists—and often it is how these vital secondary players perform that affects the day to day outcome of geopolitics.

Today we look at the second tier of the world’s power rankings. These powers don’t rule the world, but they help shape it in important ways. One thing many of them do is form alliances that boost and to some degree channel the power of the top tier countries. The power of these alliances is very real; America’s unique network of alliances with other countries is both a sign and a cause of its preeminent power. The United States continues to defy predictions of its imminent decline and fall in part because American power is constantly getting boosts from the network, even as second tier countries like Britain or Israel benefit from an American alliance that gives them influence and access that they might otherwise lack.

So here, in descending order of power, are the world’s regional powers, aspiring global powers, or fading stars. These eight countries couldn’t invade the United States or bully China economically. But they still help shape the world we live in—and sometimes, if they play a canny game, form the right partnerships, and make the right move at the right time, they can even pull off the occasional win over a great power. Or so they hope.

1) Iran

Of all the second tier powers, Iran is making the most determined push to elbow its way to the global high table. Essentially, Iran wants Saudi Arabia’s role. It wants enough power in the Persian Gulf that Tehran will replace Riyadh as the power that determines the OPEC oil price. It also wants to take Saudi Arabia’s place as the leading Islamic power—and it wants to be the strongest regional power east of Europe and west of India. Success would make Iran one of the global greats, and the Iranians have been willing to pay a high price and run great risks to try to bootstrap themselves up to the world’s Premier League.

Iran has both handicaps and advantages in its quest. Its biggest handicaps are its Shia religion and non-Arab ethnicity; many Sunni Arabs consider Shi’ism a dangerous heresy and distrust Persians. Among its advantages: it has a much larger population and a much more advanced political and economic structure than most of the Arab states it wants to dominate. Additionally, while its Shi’a faith hurts Iran with many Arabs, there are significant Shi’a Arab populations in Iraq, in Syria (Assad and his Alawi kinfolk side with the Shi’a), Bahrain (where a Sunni dynasty rules over a restive Shi’a majority), Lebanon (where the Shi’a support Iran’s ally Hezbollah), and Saudi Arabia itself, where many of the people who live in the oil rich Eastern Province are Shi’a. Combine the hard power of its Iran’s push for great power status with its soft power appeal to Shi’a co-religionists, and you have a formidable force that can realistically aspire to dominate one of the most strategic regions in the world.

Iran also benefits from its hostility to Israel and the United States. Both countries are wildly unpopular across most of the Middle East, and Iran can point to Saudi Arabia’s longtime alliance with U.S. as well as Riyadh’s (muted and conditional) support for coexistence with Israel to show that Iran, not the Saudi Arabia, is the true leader of Islamic resistance to the West. This soft power helps offset Iran’s religious and ethnic disadvantages in the region; fear of losing that advantage is one reason that Iran, even as it gingerly negotiates with the U.S. and others over the nuclear issue, continues to scoff at the idea of a true rapprochement with the United States.

At the moment, Iran has yet another advantage: the widespread belief shared by many of its adversaries that President Obama is willing to offer Saudi Arabia’s current job to Iran. Rightly or wrongly, suspicious Sunni Arab analysts and policymakers all across the region believe that the United States, beginning with the overthrow of (Sunni) Saddam Hussein under Bush and continuing under Obama with its refusal to push for regime change against (Shi’a) Assad in Syria, is out to weaken and divide the Sunni Arab world and to install Iran as America’s regional proxy.

How all this shakes out in 2o15 and beyond is anybody’s guess. But Saudi Arabia and Iran, each with proxies and clients, are engaged in the ugliest, bloodiest and most bitter showdown in the world today. The prize is great power status; Iran believes that if it can replace Saudi Arabia as the prime regional power, its larger population and more advanced economy (potentially with nuclear weapons as well) will make it a much more formidable global force than the Saudi kingdom could ever hope to be.

2) Britain

Britain is not the superpower that it once was, but many Brits would like to think it retains a place at the global high table. It doesn’t; a combination of deep military cuts and diplomatic ineptitude mean that the UK, like its ancient rival France, no longer ranks among the seven great powers.

Even so, one square mile of pure power still remains: the financial district centered in the historic City of London. Britain’s position as the center of global finance does not just mean there are jobs in the UK’s capital; it means that many foreign investors—particularly from countries where legal protections are weak. as in Russia, or where local talent lacks the skills and experience of British money managers as in the Middle East—leave their money under British management. This enables the City and therefore the UK to have a much greater global reach than Britain’s own wealth and power could ever give it. From the sands of Arabia to the mines of Australia to finance ministries in debtor countries around the world, the City plays a more significant role in decision making than many understand. The UK is not quite as post-imperial as it sometimes looks.

Britain’s own economy is also an asset, growing at a faster rate than that of the U.S., Japan, or its major European competitors.  Britain also retains immense cultural clout, and we are not just talking about the Bard and the Beatles. Almost the whole world passionately follows soccer, a British game codified and popularized by men who could have walked right out of the door of Downton Abbey. UK Premier League teams, such as Manchester United, have fans all over the world, not to mention foreign oligarchs lining up to buy them.

Britain’s superb intelligence services and Special Forces help keep Britain great. Beyond that, the still vibrant special relationship with the U.S. matters, with diplomats and intelligence staffers in both countries working hand in glove on some extremely sensitive issues.

So why doesn’t Britain have a place among the seven great powers of our time? Blame military cutbacks. For all the quality of its elite unites, the British military would struggle to repeat its Falkland Islands success of 1982, much less its role in the 2003 invasion of Iraq. But Britain’s military cutbacks, damaging as they are, aren’t nearly as crippling as its diplomatic collapse. For hundreds of years British diplomacy shaped European political realities; in the 21st century Albion’s once brilliantly perfidious diplomats have lost their guile. Even as the Franco-German entente withers, Britain’s leaders seem unable to build a natural, even obvious, coalition with the countries of Eastern and Northern Europe for EU reform, and the once sure-footed British have been unable to develop a European strategy for the last twenty years.
Decline is a choice for the UK today, not a fate. Its population and economy are both growing at rates that would bring it closer to Germany in the long run, and its entrepreneurial spirit, great universities, and long record of stable government are qualities that others can only envy.

Yet the Brits seem more interested in picking their society apart than in renewing its dynamism. The Scottish drive to secede, the fumbling approach to the EU, the failure to develop a working immigration policy: none of these seem like the hallmarks of a rising state. Britain is one of a handful of countries that seem bent on throwing away opportunities that others would kill for. But it has recovered its footing in the past; its friends must hope that this ever-less-Scept’red Isle changes course.

3) France

Britain and France are rivals, but these days they seem united in decline, and France, as much as Britain, is now punching well below its potential. France has the 5th largest economy in the world. It has nukes, an advanced army, an aircraft carrier, and a veto on the UN Security Council. What it doesn’t have is a plan.

Specifically, it doesn’t have a plan for dealing with Germany’s rise. France originally hoped that the euro would lock a united Germany into a monetary union that would favor France. Things didn’t work out that way; Germany has adapted to the euro and today it is France that is constrained and hemmed in by the currency it once saw as its greatest achievement.

The euro requires deep structural reforms that French society does not want to make, but France has been unable to force Germany to turn the euro into the kind of loose monetary system that would make it easier for France to continue with business as usual. Neither Nicholas Sarkozy nor Francois Hollande has been able to make Angela Merkel budge on the question of Europe’s monetary destiny; never has France’s power and prestige in the EU been at such a low ebb.

 

[a_majoor]

Part 2:

http://www.the-american-interest.com/2015/01/10/power-rankings-the-second-tier/

4) Turkey

Geography has always been Turkey’s best friend. At the intersection of Europe and the Middle East, Turkey controls some of the world’s most vital trade routes, including Russia’s link to the Mediterranean and the Middle East. Geography boosts Turkish power in another way; it sits at the center of a region of enormous importance, surrounded by crisis ridden states.

Syria, Iraq, Ukraine, Greece, Lebanon, Iran, Georgia: every one of these countries faces huge problems, and every one of them matters to the outside world. Turkey has its domestic troubles, including a long running war against the PKK Kurdish rebels that it has not yet been able to end, but by contrast with its neighbors, Turkey is an oasis of stability and progress.

That gives Turkey clout. America comes calling because the U.S. needs Turkey’s bases, craves its diplomatic cooperation, and will want its military help if anything is ever to be done to bring the war in Syria to an end without leaving ISIS in control. The EU and Russia both want Turkish trade and Turkish cooperation; Iran sees Turkey as a potential weak link in the alliances around it.

Turkey has had its share of setbacks. Erdogan’s Muslim Brotherhood allies have taken one hit after another. The Saudis are doing their best to pry the Qataris out of Turkey’s embrace. But none of that affects the foundations of Turkey’s continuing power. Between Germany and India, only Iran is a match for Turkey’s combination of a strong state, a technologically sophisticated economy, and a large, educated and hardworking population. Rivalry between the Ottoman Turks and the Persian Empire shaped the Middle East for four hundred years; while President Erdogan as so far signally failed to put Turkey back on the path to regional power, the geographical, economic and demographic facts on the ground ensure that any power with vital interests in the Middle East needs to consult with the Turks.

5) Israel

Inch for inch and pound for pound, no country in the world matches Israel’s impact on international politics. Israeli prime ministers can make or break an American president’s day, bomb nuclear reactors in Syria, put the Iranian nuclear program front and center for the whole international community—and still drive the world to distraction by authorizing a housing developer to build an apartment complex on a barren hillside near Jerusalem. The Israeli intelligence services, including Shin Bet and Mossad, are among the most effective in the world, and the expeditionary and special forces elements of its military among the most experienced. Above all, Israel maintains the strongest, most technically advanced conventional military forces in the Middle East.

While doing all of the above, Israel has built one of the most dynamic high tech industrial complexes in the world, discovered huge energy fields in its territorial waters, and brought its largest Arab neighbors into an uneasy but serious coalition against Israel’s three most serious regional enemies: Hamas, Hezbollah, and the Islamic Republic of Iran.

Conventional media coverage of Israel’s diplomatic efforts consistently accentuates the negative, but a clear-eyed look at the Jewish state’s situation reveals a more complicated picture. Israeli-Indian relations have never been closer, and their defense cooperation will deepen as their trade links grow. Black Africa is increasingly Christian, and many of those Christians are Christian Zionists who see themselves in a war against jihadi terror. Vladimir Putin wants to stay close to Jerusalem. The Egyptian army hates Hamas at least as much as the Israelis do. Jordan needs Israel more than ever. The ascendant Kurds and the Jews have long had warm relations.

Iran remains a major security threat, Israel’s relations with the EU continue to deteriorate and the Obama administration cannot stand the Netanyahu government. But Israel has been in hot water since it proclaimed its independence back in 1947; during all that time it has been beset with challenges and threats and, so far, its power has continued to grow.

6) Brazil

In 2014, Latin America was an oasis of calm in a troubled world. That is in large part due to the power of Brazil, a country whose quiet regional leadership matters more than many think.

Brazil dominates South America almost as completely as the United States dominates the northern half of the New World. Brazil’s GDP is bigger than that of every other nation in South America combined. Its population is four times that of the next largest country; it is larger in area than the continental United States. Of the ten most populous cities in South America, six are Brazilian. And though Brazil has not been to war with a neighbor in over 140 years (a diplomatic achievement in itself), none of its neighbors would want to cross it militarily.
Brazil’s power is best described as a moderating power: Brazil’s steady focus on peaceful economic growth keeps Latin America relatively calm. It steadfastly refuses to choose either the loco-left politics of the unhinged Bolivarians found in countries like Venezuela or a slavish obedience to every economic fad that sweeps the Washington policy elite. High levels of pro-American feeling in public opinion combine with a left-leaning political system (the Workers’ Party has won the last four presidential elections in a row) to produce a government that Caracas, Havana and Washington can all work with and more or less trust.

Not everyone in Brazil thinks this is enough. Many Brazilians (especially many of those working in the highly professional and widely admired Foreign Ministry) want to see Brazil take its place in the elite ranks of the great powers. A permanent seat on the Security Council, a larger role in Africa, a voice in the Middle East: Brazilian nationalists think big. And its regional accomplishments fall short of the standards some set: to the frustration of many Brazilians. Mercosul, the Latin American trade bloc, has never evolved into something like the European Union. Nobody was more disappointed than the Brazilians when the BRIC hype faded away.

Being a moderating power in a quiet region is not the most glamorous of global vocations, but Brazil is secure, popular, and free to work out its own destiny on its own terms. In a wild and dangerous world, that is nothing to sneeze at.

7) Australia

Australia is one of the world’s rising powers. Economic diversification, technological development, and population growth are making Australia stronger even as the evolution of a new Asian power system makes Australia more important.

Australia had a banner year in 2014. Australia’s Prime Minister had triumphant visits to each of Asia’s Big Three: in China, India and Japan he got the red carpet treatment. That wasn’t all. Australia built ties with the Indian Navy, agreed to export uranium to India, and arranged to purchase up to twelve high-tech submarines from the Japanese. It deepened its defense ties with Japan in other ways too, inking arrangements to share sensitive military technology and a trilateral defense agreement with Tokyo and Washington. The diplomatic successes went beyond defense links; 2014 Australian economic diplomacy secured free trade agreements with South Korea, Japan, and China. The last one meant that up to 95% of all Australian exports will now come into China duty-free.

Beyond Asia, Australia continues to build one of the world’s closest relationships with the United States and the military, trade, intelligence, cultural, and diplomatic ties between the two countries are about as close as these things ever get.

Australia’s population is still only 23 m, and even though that number is projected to jump by 63% to 37.6M by 2050, Australia isn’t going to be a superpower anytime soon. But Australia’s voice matters more today than it ever has in the past, and its influence seems fated to continue to grow.

8) Canada

Think of Canada as a cross between Australia and Brazil. Like Australia, it is a rising power that is rich in resources, closely tied to the United States and gaining skilled new residents through an influx of highly qualified immigrants. Also like Australia, it is a country that finds itself moving from the fringes to the center of important geopolitical issues. Like Brazil, it is a moderating power whose strong influence often operates behind the scenes.

If the rise of China and the resulting tensions in Asia have helped propel Australia into the midst of world politics, it is Russia that is bringing Canada into a more engaged stance. Russia’s invasion of Ukraine sent shock waves across Canada, where Ukrainian immigrants are one of the country’s largest and most vocal ethnic groups. Canada has consistently been one of Ukraine’s strongest supporters, with prominent Canadian politicians competing to show their support for the embattled republic. Meanwhile, Russia’s growing activism across the Arctic is driving many Canadians to take another look at both their diplomatic and military situation.

At the same time, the steady rise in Canada’s importance as an oil producer is making it a more important factor in world politics. Canada’s unconventional reserves are even larger than the U.S. resources already shaking the global geopolitical order. Canada’s growing heft in world energy production will bolster America’s new role and could ultimately make North America the world’s swing oil producer.

But while Canada has a large and growing oil sector, the crash will affect it less than one might expect. Canada is not Saudi Arabia with ice hockey: it has a diversified economy, and the oil crash is likely to help manufacturing in Ontario as much as it hurts Alberta. Canada also has three world-class economic hubs in Toronto, Montreal, and Vancouver—assets that will help it ride out the crash.

Like Brazil, Canada has a foreign policy that sometimes looks boring. But as in Brazil’s case, that is a consequence of success, not of failure. Canada has maintained a close and confidential relationship with the United States for decades, but it has also hammered out a distinct international role. Nobody doubts that Canada and the United States ultimately stand side by side, but Canada is widely seen as a more approachable and flexible power than the titan to its south. Over time, as more of Canadian trade shifts to the Pacific, it is likely that Canadian and Australian policy will begin to develop in tandem. That will likely increase the influence of these two far flung offshoots of the old British Empire—both on the wider world around them and on the United States.

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions of the Copyright Act from the Financial Post, is a report on some calming words by Bank of Canada Governor Stephen Poloz:

http://business.financialpost.com/fp-comment/terence-corcoran-stephen-poloz-for-prime-minister

Stephen Poloz for Prime Minister

Terence Corcoran | September 22, 2015

Vote economic reasoning over electioneering

After months of hyperventilating media reports on Canada’s slide into recession and a looming national economic crisis over falling oil prices, along comes Bank of Canada Governor Stephen Poloz to calm the frothing waters.

The idea that Canada is undergoing a destructive economic mega-shift away from oil and natural resources has been one of the driving metaphors of the current election campaign.  To avoid sliding helplessly beyond recession into some dark unknown future, Canada supposedly needs a retooled national policy “vision” from government — new strategies, bold investment initiatives, revamped incentives, grand innovation programs.

No such policy imperatives appeared in Poloz’s speech to the Calgary Economic Club Monday. On the contrary, the central bank governor declared Canada to be a resource-rich economy that will continue to thrive on its natural endowments. “While an abundance of raw materials may complicate the management of companies and the conduct of economic policy, it is far better for a country to have resources than not to have them.”  They represent, he said, a “store of value and a source of future riches.”

More importantly, perhaps, Poloz appeared to be cautioning against the grand policy paradigm shifts advocated by some. It’s up to business leaders to manage risks and “be ready to react to market signals and seize opportunities.” As for “policy makers,” Poloz said they can help by “encouraging economic flexibility.” This means, he said, “allowing the necessary adjustments to take place and not frustrating flows of investment or labour from one region to another.”

That advice — let market forces do their job — flies in the face of much of the fuzzy rhetoric and some of the initiatives percolating through Canada’s policy wonkland and much of the media.

There was also not a word from Poloz on the recession and economic slowdown, perhaps because the recession may never have happened and the minor slowdown has already passed.  A new report from RBC Economics says Canada’s economy “contracted mildly” during the first half of 2015, but the decline was marginal and concentrated mostly in the energy sector.  RBC chief economist Craig Wright said the “flurry of recession talk” was “misplaced.”

RBC said Canadian employment growth is up and wages are rising, suggesting Canadian business is “competing for workers instead of laying them off.”  Poloz made the same point, if less directly. Canada’s labour market showed impressive flexibility as workers moved to Alberta to fill demand.  The Bank of Canada’s latest business survey, said Poloz, showed evidence of labour shortages in some regions where workers are returning from the oilpatch.

Throughout his speech, Poloz put forward an economic perspective that has been missing amidst the cacophonous overtalking of the election campaign and the mad scramble of politicians and commentators to come up with new talking points.  By the time any prime minister or political party gets around to implementing their billion-dollar mega-programs and interventionist micro-schemes, most of the business world will have already adjusted to the changed economic circumstances.

An example of such micro-meddling was announced Monday by the Conservatives, a $100-million four-year scheme to encourage manufacturing.  The Manufacturing Technology Demonstration Fund will allegedly provide non-repayable grants as incentives to large “anchor firms” to partner with small business and universities to boost automotive, information and communication technology, steel, aluminum, and machinery and equipment sectors.

If Poloz’s portrait of economic adjustment to changing economic conditions is right, such programs — of which the election has produced a pandemic — are essentially unnecessary.

The great oil and commodity price boom of the past few years was a logical market reaction to changing economic circumstances. For example, between 2008 and 2010, the price of copper tripled and oil and gas prices doubled. “If you believe in market forces,” said Poloz, “these movements represented a clear signal to invest and expand output.”  Companies did expand output, and the increased income flowed through to the Canadian economy.

Reversal of the boom prices does not mean that Canada has somehow entered some new economic world in which resources play a lesser role. Canada, said Poloz, is a storehouse of resources and potential.  The world will continue to demand the oil, gas, fish, food, minerals and other resources that are native to the country’s vast geography.

At the Bank of Canada, meanwhile, the policy is to hold to Canada’s inflation-target regime and floating exchange rate.  The movements in prices can be hard to handle at times, but Canada is a nation of producers and consumers. “Canada is fortunate to be both,” said Poloz, “and we shouldn’t ignore the resources we have been blessed with.”

In short, Poloz’s Calgary speech is one of the best ever delivered on the strengths and potential of Canada’s economy. Poloz for Prime Minister!

Financial Post

I was tempted to post this in the Election 2015 thread because it does provide a useful critique of some of the rubbish being spouted from the left of the political spectrum, especially by young candidates with no background in fiscal policy, business or economics.

We are, technically, in recession ... but do you (or most political candidates, including party leaders) understand what that really means? I think not. And the first question one ought to ask about sliding into a technical recession, as Canada has done, is; "So what?" And the correct answer to that question is:  :dunno: "So nothing," ~ market forces change and we adapt, sometimes painfully, more often, as now, without too much difficulty.

In short, notwithstanding all the hype, the sky is not falling, and almost everything said by Messers Mulcair and Trudeau and most of what's been said by Prime Minister Harper is nonsense, designed to frighten you into making poor electoral decisions ... and, in my opinion, there are no really good ones, just some one that are is less bad than all the others.

 

[a_majoor]

If we imbued more Canadians with this sort foo attitude this thread would not even exist. An interesting note (from the post where this was taken), Forbes website took this down because of the reaction to it. IF there was a bit less of this sort of "reaction" then this thread would also not exist. Go to the link and read the comments by Techraptor posters, very illuminating (Sadly, there does not seem to be a link or archive of the Forbes comments):

http://techraptor.net/content/there-is-no-diversity-crisis-in-tech-by-brian-hall

There Is No Diversity Crisis In Tech by Brian Hall

Editor’s Note: We are reposting this article by Brian Hall with his permission after he got the copyright to it from Forbes. It had previously been up on their website for about 24 hours and then got pulled for mysterious reasons with “violating terms” cited but no more description. While there are a lot of theories on why it was pulled, we don’t know, but given the backlash surrounding it on the Internet, we believe that we must advocate against censorship in any way we can, so we are hosting it here. The backlash it received is amazing considering it is a pretty light editorial. You can see more about it on Brian’s website.
Needless to say, these are Brian’s own words and views on the topic.

There Is No Diversity Crisis In Tech by Brian Hall

Repeat after me: there is no “diversity crisis” in Silicon Valley. None. In fact, there is no crisis at all in Silicon Valley. Silicon Valley is doing absolutely gangbusters. Apple has $200 billion in cash reserves and equivalents — and a market valuation of about $630 billion. Amazing. Facebook now garners a billion daily users. This is a nearly unfathomable number. Google is worth nearly $450 billion and has $70 billion in cash on hand.

This is not a crisis. Silicon Valley is swimming in money and in success. Uber is valued at around $50 billion. Companies like Airbnb are remaking travel and lodging. Intel is moving forward into the global Internet of Things market. South Korea’s Samsung just opened a giant R&D facility in the heart of Silicon Valley. Google and Facebook are working to connect the entire world. Netflix is re-making how we consume entertainment.

Silicon Valley is home to the next phase of the global auto industry. Fintech and biotech are transforming banking and medicine. The success of Silicon Valley is not due to diversity — or to any bias. Rather, to brilliance, hard work, risk taking, big ideas and money.
Want to be part of this? Great! Follow the example of the millions who came before you. Their parents made school a priority. They took math and science classes, and did their homework every night. They practiced ACT tests over and over. They enrolled in good schools and focused on English, Political Science and Humanities.

Okay, that last bit is not true. They took computer programming, engineering, chemistry — hard subjects that demand hard work. They then left their home, their family, their community, and moved to Silicon Valley. They worked hard, staying late night after night. They didn’t blog, they didn’t let their skills go stale, they didn’t blame others when not everything worked out exactly as hoped.
Are you doing all of these? Are you doing any of these? Do them!

From all over the world, from Brazil and Canada, Nigeria, Pakistan, Russia, Norway, Egypt, fellow humans come to Silicon Valley to work, create, succeed. And they do. Silicon Valley is extremely diverse.

Of course, the iPhone wasn’t created because of diversity. Nor was Google. Nor Facebook, nor the computer chip, nor the touchscreen. They were created because a small band of super-smart people who worked very hard to create something better than existed before.
Wait. It gets better.

Silicon Valley doesn’t just create greatness, it’s probably the most open, welcoming, meritocratic-based region on the planet. Anecdotal evidence strongly suggests that disproportionately more Chinese, Indians, and LGBQT succeed in Silicon Valley than just about any place in America. Guess what? Everyone earned their job because of their big brains and ability to contribute.
Is that you?

Then come here! It’s an amazingly inclusive place.

But be sure to bring your computer science degree, your engineering degree, your proven set of accomplishments. Be sure you are prepared to sacrifice “fun” for long hours and hard work. Offer proof of how well you did in school, in math, in physics. These matter dearly as they are fundamental to what makes Silicon Valley succeed.

Silicon Valley is not perfect. It’s certainly no utopia. But if you aren’t able to make it here, it’s almost certainly not because of any bias. Rather, on your refusal to put in the hard work in the hard classes, and to accept all the failures that happen before you achieve any amazing success.

Stop demanding Silicon Valley adhere to your desires, or your limitations. Remember, there’s a reason you’re not using a flip phone. There’s a reason you’re not cursing that taxi that never showed up. Silicon Valley is about moving forward. It’s not biased but it is demanding. That’s what makes it so great.

 

[Edward Campbell]

I agree generally, with Quebec, on the issue of maritime boundaries, as discussed in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from CBC News:

http://www.cbc.ca/news/canada/montreal/quebec-calls-for-urgent-extension-of-northern-border-1.3261668

Quebec calls for 'urgent' extension of northern border
Provincial boundary ends at shoreline, complicating maritime strategy for Plan Nord

By Ryan Hicks, CBC News

Posted: Oct 08, 2015

The Quebec government is counting on the federal government's help in resolving a century-old conundrum over its northern boundary, in order to proceed with the maritime strategy that's part of its billion-dollar northern economic development plan.

The Couillard government's Plan Nord includes building ports, however, Quebec's northern border, delineated by Ottawa in 1912, officially ends right at the shoreline — which would leave boats docking at those ports moored outside of the province.

"We will have to put a place to receive boats there, and if we don't settle that frontier…it will be complicated to build those kinds of structures," Quebec Intergovernmental Affairs Minister Jean-Marc Fournier told CBC News in an exclusive interview, adding the issue is "urgent."

The first step to extend the boundary beyond the shoreline and into the water, he said, lies with Ottawa.

Fournier said Quebec wants the prime minister to bring together all parties – provinces, territories and aboriginal groups – to discuss how to resolve the boundary question.

The issue is important enough to Quebec that it was included in a letter Premier Philippe Couillard wrote to federal party leaders at the start of the election campaign, outlining his key priorities.

Fournier said he's not sure party leaders are even aware of the boundary issue and why it's problematic.

"So let's expose the problem and find solutions — being pragmatic, in fact."

2,500-km border that moves with the tides

Quebec's northern border is 2,500 km long, and the way it was drawn is an anomaly, said Mathieu Jacques, a lawyer who has researched the subject.

"The moment you're on the beach, you're in Quebec. And if you put your feet in the water, you are in Nunavut."

"Just try to imagine you want to create a port in northern Quebec," he said. "You would have the boats...at the end of the dock...in a different jurisdiction from the people on the shore."

Quebec is not the only province with this jurisdictional issue.  The federal government delineated the borders for Manitoba and Ontario in the same year, and their borders also exclude the water.

This means in all three provinces, the borders shift daily, from high to low tide, and they're also shifting with climate change.

Those borders "made no sense in 1912 and make even less sense today in 2015," said Jacques.

"Ontario, Manitoba and Quebec cannot develop themselves in the north. They cannot develop infrastructure correctly, while they have this problem of jurisdiction," says Jacques. "It's unfair. There is no other place in the world where you have a border that is fixed along the shore."

BC, NL borders extend into oceans

British Columbia and Newfoundland and Labrador, for example, do have jurisdiction over their waters — allowing them to exploit natural resources and share royalties with the federal government. Jacques said it only makes sense that Quebec, Ontario and Manitoba should obtain similar power and authority.

"Every province wants to work to make economies stronger," he said. "We have to acknowledge everyone's interests and find a solution that reflects and respects all stakeholders in the situation."

Jean-Marc Fournier said while his government wants the province's arctic and sub-arctic boundary extended into the water, it hasn't yet established how far offshore that boundary should be.

Maritime strategy at stake

A provincial commission which spent six years studying Quebec's borders recommended in 1972 that Quebec should include about half of Hudson Bay and the Hudson Strait, which would include Sanikiluaq and other offshore islands now part of Nunavut.

The commission concluded that boundary is the "logical" option "from a geographical point of view and normal from a political point of view."

However, successive Quebec governments never felt a sense of urgency to challenge the existing northern boundary until recently, with Couillard's announcement earlier this year that his new Plan Nord will include a maritime strategy.

I'm in general agreement, only, because I suspect that the fate of the islands will be a problem. I also wonder if a province needs a boundary that extends, say, beyond 3 miles.

But I am in general agreement because issues like nthe boundaries need to be settled before provinces can make good economic plans.

 

[a_majoor]

Interesting how we stack up with Denmark (at least according to one American). Too bad we seem willing to throw it away for spite in this election:

http://www.nationalreview.com/corner/425544/somethings-awesome-state-denmark-kevin-d-williamson

Something’s Awesome in the State of Denmark
by Kevin D. Williamson October 14, 2015 12:29 AM @kevinNR

Bernie Sanders’s Denmark love is another reminder that our Democratic friends, who imagine themselves to be worldly cosmopolitans more at ease with sophisticated European ways, don’t actually know a damned thing about what’s going on overseas.

For those of you who are keeping score, the Heritage Foundation, which literally keeps score, rates Denmark’s economy as slightly more free – slightly more capitalistic — than that of the United States. Denmark is in a rough spot just lately, but it has been undergoing a series of deep and intelligent reforms to its welfare state (as have many of the other Northern European countries) to counteract the ill effects of earlier excesses.

Its corporate-income tax is much lower than that of the United States. Its regulatory environment is in many ways more free. It is very free-trade oriented.

What Denmark does have — what all the Nordic countries have — is relatively high taxes on the middle class, which gets double-whammied with income taxes and a value-added tax. Is that what Sanders et al. are proposing for the United States, to make it more Danish? A big, heavy tax increase on the middle class? Maybe it should be — the Danes have a big welfare state and they pay for it – but no Democrat walking this Earth has the intellectual honesty to say as much.

Strong property rights, low corruption, openness to trade and investment, low public debt: Bring it on.

Sanders seems to think that nothing has changed in Denmark or Sweden since 1975.

Denmark today has one of the world’s most free economies, up there with Canada, Switzerland, and Australia. That isn’t socialism, kiddies.

Read more at: http://www.nationalreview.com/corner/425544/somethings-awesome-state-denmark-kevin-d-williamson

and some discussion of how Denmark reformed some of the excesses of the Welfare State:

http://www.nytimes.com/2013/04/21/world/europe/danes-rethink-a-welfare-state-ample-to-a-fault.html?_r=0

Danes Rethink a Welfare State Ample to a Fault
By SUZANNE DALEYAPRIL 20, 2013

COPENHAGEN — It began as a stunt intended to prove that hardship and poverty still existed in this small, wealthy country, but it backfired badly. Visit a single mother of two on welfare, a liberal member of Parliament goaded a skeptical political opponent, see for yourself how hard it is.

It turned out, however, that life on welfare was not so hard. The 36-year-old single mother, given the pseudonym “Carina” in the news media, had more money to spend than many of the country’s full-time workers. All told, she was getting about $2,700 a month, and she had been on welfare since she was 16.

In past years, Danes might have shrugged off the case, finding Carina more pitiable than anything else. But even before her story was in the headlines 16 months ago, they were deeply engaged in a debate about whether their beloved welfare state, perhaps Europe’s most generous, had become too rich, undermining the country’s work ethic. Carina helped tip the scales.

With little fuss or political protest — or notice abroad — Denmark has been at work overhauling entitlements, trying to prod Danes into working more or longer or both. While much of southern Europe has been racked by strikes and protests as its creditors force austerity measures, Denmark still has a coveted AAA bond rating.

But Denmark’s long-term outlook is troubling. The population is aging, and in many regions of the country people without jobs now outnumber those with them.

Some of that is a result of a depressed economy. But many experts say a more basic problem is the proportion of Danes who are not participating in the work force at all — be they dawdling university students, young pensioners or welfare recipients like Carina who lean on hefty government support.

“Before the crisis there was a sense that there was always going to be more and more,” Bjarke Moller, the editor in chief of publications for Mandag Morgen, a research group in Copenhagen. “But that is not true anymore. There are a lot of pressures on us right now. We need to be an agile society to survive.”

The Danish model of government is close to a religion here, and it has produced a population that regularly claims to be among the happiest in the world. Even the country’s conservative politicians are not suggesting getting rid of it.

Denmark has among the highest marginal income-tax rates in the world, with the top bracket of 56.5 percent kicking in on incomes of more than about $80,000. But in exchange, the Danes get a cradle-to-grave safety net that includes free health care, a free university education and hefty payouts to even the richest citizens.

Parents in all income brackets, for instance, get quarterly checks from the government to help defray child-care costs. The elderly get free maid service if they need it, even if they are wealthy.

But few experts here believe that Denmark can long afford the current perks. So Denmark is retooling itself, tinkering with corporate tax rates, considering new public sector investments and, for the long term, trying to wean more people — the young and the old — off government benefits.

“In the past, people never asked for help unless they needed it,” said Karen Haekkerup, the minister of social affairs and integration, who has been outspoken on the subject. “My grandmother was offered a pension and she was offended. She did not need it.

“But now people do not have that mentality. They think of these benefits as their rights. The rights have just expanded and expanded. And it has brought us a good quality of life. But now we need to go back to the rights and the duties. We all have to contribute.”

In 2012, a little over 2.6 million people between the ages of 15 and 64 were working in Denmark, 47 percent of the total population and 73 percent of the 15- to 64-year-olds.

While only about 65 percent of working age adults are employed in the United States, comparisons are misleading, since many Danes work short hours and all enjoy perks like long vacations and lengthy paid maternity leaves, not to speak of a de facto minimum wage approaching $20 an hour. Danes would rank much lower in terms of hours worked per year.

In addition, the work force has far more older people to support. About 18 percent of Denmark’s population is over 65, compared with 13 percent in the United States.

One study, by the municipal policy research group Kora, recently found that only 3 of Denmark’s 98 municipalities will have a majority of residents working in 2013. This is a significant reduction from 2009, when 59 municipalities could boast that a majority of residents had jobs. (Everyone, including children, was counted in the comparison.)

Joachim B. Olsen, the skeptical politician from the Liberal Alliance party who visited Carina 16 months ago in her pleasant Copenhagen apartment, is particularly alarmed. He says Sweden, which is already considered generous, has far fewer citizens living on government benefits. If Denmark followed Sweden’s example, it would have about 250,000 fewer people living on benefits of various sorts.

“The welfare state here has spiraled out of control,” Mr. Olsen said. “It has done a lot of good, but we have been unwilling to talk about the negative side. For a very long time it has been taboo to talk about the Carinas.”

Already the government has reduced various early-retirement plans. The unemployed used to be able to collect benefits for up to four years. Now it is two.

Students are next up for cutbacks, most intended to get them in the work force faster. Currently, students are entitled to six years of stipends, about $990 a month, to complete a five-year degree which, of course, is free. Many of them take even longer to finish, taking breaks to travel and for internships before and during their studies.

In trying to reduce the welfare rolls, the government is concentrating on making sure that people like Carina do not exist in the future. It is proposing cuts to welfare grants for those under 30 and stricter reviews to make sure that such recipients are steered into jobs or educational programs before they get comfortable on government benefits.

Officials have also begun to question the large number of people who are receiving lifetime disability checks. About 240,000 people — roughly 9 percent of the potential work force — have lifetime disability status; about 33,500 of them are under 40. The government has proposed ending that status for those under 40, unless they have a mental or physical condition that is so severe that it keeps them from working.

Instead of offering disability, the government intends to assign individuals to “rehabilitation teams” to come up with one- to five-year plans that could include counseling, social-skills training and education as well as a state-subsidized job, at least in the beginning. The idea is to have them working at least part time, or studying.

It remains possible that the cost-cutting push will hurt the left-wing coalition that leads the government. By and large, though, the changes have passed easily in Parliament and been happily endorsed by conservatives like Mr. Olsen, who does his best to keep his meeting with Carina in the headlines.

Carina was not the only welfare recipient to fuel the sense that Denmark’s system has somehow gotten out of kilter. Robert Nielsen, 45, made headlines last September when he was interviewed on television, admitting that he had basically been on welfare since 2001.

Mr. Nielsen said he was able-bodied but had no intention of taking a demeaning job, like working at a fast-food restaurant. He made do quite well on welfare, he said. He even owns his own co-op apartment.

Unlike Carina, who will no longer give interviews, Mr. Nielsen, called “Lazy Robert” by the news media, seems to be enjoying the attention. He says that he is greeted warmly on the street all the time. “Luckily, I am born and live in Denmark, where the government is willing to support my life,” he said.

Some Danes say the existence of people like Carina and Mr. Nielsen comes as no surprise. Lene Malmberg, who lives in Odsherred and works part time as a secretary despite a serious brain injury that has affected her short-term memory, said the Carina story was not news to her. At one point, she said, before her accident when she worked full time, her sister was receiving benefits and getting more money than she was.

“The system is wrong somehow, I agree,” she said. “I wanted to work. But she was a little bit: ‘Why work?’ ”

Anna-Katarina Gravgaard contributed reporting.

 

[Edward Campbell]

In this column, which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, Jeffrey Simpson explains five essentially economic "remedies" for Atlantic Canada's perpetual "troubles" which a new, beholden, Liberal government might decide to try:

http://www.theglobeandmail.com/news/politics/globe-politics-insider/jeffrey-simpson-with-liberal-sweep-political-stars-align-for-atlantic-canada/article26917071/

With Liberal sweep, political stars align for Atlantic Canada

SUBSCRIBERS ONLY

Jeffrey Simpson
The Globe and Mail

Published Thursday, Oct. 22, 2015

Of all the electoral surprises, one of the greatest was the Liberals’ clean sweep of Atlantic Canada.

The Liberals were expected to do handsomely in the region. But nobody predicted that the party would capture all 32 seats. An oceanic metaphor for these four coastal provinces is apt: When a powerful political tide comes in, nothing can stop it.

This is a rare political moment in Atlantic Canada. All the federal MPs are Liberal. The three Maritime premiers are Liberals. In the Nov. 30 election in Newfoundland, the Liberals will likely oust the Progressive Conservative government, putting Liberals in power in all four Atlantic Canadian provinces.

If ever, therefore, the political leadership of Atlantic Canada could work together and do something big for the region that time must be now. And the region needs help.

What it doesn’t need, however, are old-style Liberal remedies that have done so much to shape the political culture of the region. Put another way, the flip side of this rare opportunity for progress is the possibility that Liberal governments and MPs will squander this chance by dropping more money into old programs to perpetuate the status quo, because propping up the status quo brings the largest harvest of votes.

Atlantic Canadian Liberals practised the politics of patronage and the pork barrel for decades. The electorate came to expect it, and Liberals tried to deliver. Even in the recent election campaign, echoes of the past reverberated around turning back the clock on changes to unemployment insurance.

The region’s political culture makes it hard for politicians to tell the truth that the provinces are up against it. Two of them have large fiscal deficits: New Brunswick and Newfoundland. The slowdown of the Alberta economy means fewer remittances sent home.

The populations of the four provinces are aging fast. Nineteen per cent of New Brunswick’s population, for example, is over 65 compared with a national average of 14 per cent. Unemployment rates are higher than the national average, although the provincial averages are distended by very high rates in rural areas. Out-migration of young people continues apace. Tax rates are high by national standards.

Getting citizens to face these and other realities is difficult, partly because the realities are painful, partly because the drip-drip of relative decline makes it harder to galvanize people to action than a sudden crisis, and partly because transfer payments from Ottawa cushion the decline.

What might a new Liberal agenda look like?

Start with regional co-operation. Too many barriers remain among the Maritime provinces – different regulations and standards, professional codes, government policies. Getting rid of as many of these as possible would help Maritimers and their governments to think and act as a region. Local pride is fine; parochialism is so yesterday.

Immigration: All four provinces desperately need more immigrants. Efforts to promote immigration have been halting. They run up against intrinsic suspicions of people from far “away” who might take scarce jobs. The provinces, working with a co-operative federal government, should do a Manitoba and actively recruit immigrants and help them relocate. (Who better to be immigration minister than the new MP for Winnipeg South Centre, Jim Carr? As former head of the Manitoba Chamber of Commerce, he got to know all about that province’s efforts.)

Infrastructure: Figure out two or three big projects – not a series of itsy-bitsy ones scattered everywhere for maximum political impact – the region needs most. Broadband? Distance learning? Transportation hubs? Research centres?

Trade: The free-trade and investment deal with the European Union and the Trans-Pacific Partnership are good news for Atlantic Canada, especially but not exclusively the fishery. Think how to position the region to take advantage of these opportunities.

Innovation: Build up specialized research capabilities in universities and build networks in these areas around them. Work hard to keep some people from “away” who attend the region’s universities.

Energy: It’s the region’s biggest potential trump card. New Brunswick’s only prospect for a big revenue boost comes from exploiting its natural gas and making Saint John an energy hub. An oil pipeline from Alberta to Saint John is a national imperative.

Some of this agenda was outlined in a 2014 report about Nova Scotia entitled “Now or Never” produced by a team led by Acadia University president Ray Ivany. Dust it off. Make it happen regionally. The political stars are all aligned.

I don't agree with Mr Simpson all that often, but I think he's right on this one; I hope someone is whispering in Prime Minister designate Trudeau's ear.