Collaboration and strategic partnerships are fundamental to improving business outcomes.
In his best-seller, Sapiens, Yuval Noah Harari argues that the seemingly simple idea of large groups of Homo sapiens (us) coming together around shared stories/ideas might have been the key contributor in the survival of our species. Working collaboratively still results in success. It takes thousands of people, mostly complete strangers to each other, to build and later support the operation of a commercial airliner. Needless to say, the fruit of their successful collaboration can take us from Paris to Toronto in only eight hours!
Solo Nobel prizes in Physics, Chemistry and Physiology have been extremely rare since the early 1950s, emphasizing that major scientific breakthroughs require ever larger teams of collaborators. As different areas of science become increasingly intertwined and collaborative, the need for businesses to form deeper partnerships with academia becomes more evident. By entering into these partnerships — especially long-term partnerships — companies can access talent and cutting-edge research outcomes. More importantly, they can seed early-stage research in areas of interest to them. When operating at the interface between academia and industry, researchers — notably younger researchers with their steady stream of fresh ideas — can foster a culture of innovation at their partner industries, helping them to be more productive.
Productivity is key for the long-term prosperity of businesses. GDP, a measure of economic progress which is also linked to many quality of life indicators, directly correlates with productivity:
GDP per capita = Labour productivity (GDP per worker) x Employment ratio
Labour productivity is often broken down into three contributing factors: workforce skills, capital investments, and “multifactor productivity” (MFP). MFP predominantly includes innovation in how ideas, skills, capital and other resources are combined to generate success.
Since the mid-1980s, labour productivity in Canada as a percentage of the US has declined rapidly. Thanks to better employment ratios in Canada, our GDP per capita has kept up, but this measure is also starting to decline. This calls for boosting labour productivity, which is synonymous with innovation. Canadian business has mostly acquired innovation from the US and, despite steady growth in profits, business spending in innovation relative to GDP has fallen since 2001, versus an average increase for the OECD nations.
Traditional innovation policies support academic research and training to develop ideas and produce qualified people who then help diffuse novel ideas into the market (the push model). Given our historic trends of productivity and business expenditure in innovation, it seems that more demand-driven measures that focus on market needs and business-led innovations are needed to complement the traditional model (the pull model). And in areas of cutting-edge technology (e.g., AI), a powerful push-pull approach will support very close industrial-academic partnerships and a constant flow of ideas. The push model increases a company’s readiness for adopting cutting-edge innovation, while the pull model provides market incentives for further investment in R&D.
While the need to partner and innovate has been building over the years, the onset of the COVID-19 crisis has pushed many Canadian businesses to pivot and respond rapidly. In one example, partnerships with academics, businesses, and not-for-profit organizations have enabled Myant to rapidly modify their technology and manufacturing line in response to the pandemic. Their intelligent textile solutions are now used for remote monitoring of patients and they are utilizing their hardware capabilities to manufacture novel antiviral masks. Another firm, Cyclica, in partnership with researchers from the Vector Institute and the University of Toronto, is using its proprietary AI technology to facilitate faster drug repurposing for COVID-19.
It seems that, just like at the beginning of our history, we as one species need to come together and partner in this fight for survival.