I was listening to Don Drummond on the radio today talking about his recommended budget cuts for Ontario.  Why is it that the only way governments can find money to create a new program is to add spending? When budgets need to be reduced, it is slash and burn? Has anyone in government ever heard of creative thinking?  Zero-based budgeting?  What is called for here is profound systemic change, not rout by a thousand cuts.

My good friend Claude LeGrand has recently co-authored an intriguing book with David Weiss called “Innovative Intelligence.”  Essentially Claude’s thesis is that when we invest in R&D in this country we are talking products and manufacturing, yet today, 77% of Ontarians work in the service sector and only14% in manufacturing.  With that level of activity in service, the only way we are going to make a real difference in, let’s say healthcare – which accounts for roughly 80% of the Ontario budget – is by getting creative.  We don’t want to reduce service so we have to find better ways to deliver it. It’s that simple.

A few years ago, Claude asked us for some help to launch a Centre of Excellence for Service Innovation.  We tried to get the government’s ear with limited success. The only guy listening was then Ontario Minister of Research and Innovation whose riding gave him the boot in last fall’s provincial election.  Go figure.

In Ontario, we’re still recovering from the switch from an industrial economy to a knowledge-based one, which has created challenges for everyone. But the service industry has dominated our economy for over 20 years. Organizations need to realize where most Canadians are actually working. Service is the largest part of our economy but when it comes to innovation, we pretend it doesn’t really exist. Statistics Canada barely measures it; the Government grants in R&D are reserved for science-based R&D, specifically excluding services. As amazing as it sounds — the developers of Amazon, EBay, Starbucks, and Google would not have received R&D assistance from Canadian R&D support money.

Basically we’re in a rut – but we won’t climb out of it by putting the bean counters in charge of the store.