"igh tech" is today's headline. From the CANADARM to the latest computer, technology points the way to the future. But in itself, technology is just know-how, knowing how to make and use the tools for the job. It's the combination of technology with markets that creates innovation and gives a competitive edge.

If technology is know-how, what is an innovation? In simplest terms, an innovation is a new product or process that people can buy. An idea may lead to an invention, but it cannot be called an innovation until it is commercialized. The marketplace turns an invention into an innovation. It is only when technological know-how is developed, sold, distributed and used that it becomes an innovation.

Some ideas are a technical success, and may even be patented, but can't be sold. The road from idea to marketplace is long and uncertain. As few as five years or as many as 100 years may pass before a profit is realized from a new idea. The Xerox process, for example, was patented in the 1930s, but copying machines didn't come into widespread use until the 1970s.

Having the most advanced and newest technology makes companies more efficient. They can manufacture new products and produce traditional ones more cheaply. Innovation boosts productivity and drives economic growth. As a trading nation, Canada has to compete in world markets: our future success depends on technological innovation. Canada has no trouble generating good ideas; our difficulty has been with exploiting our inventions to our best advantage.

Canadians have an impressive history of invention and innovation. Pablum and kerosene were invented in Canada; so were the electron microscope and five-pin bowling. Canada was built on the wealth of its natural resources, and we have a long and notable list of innovations in agriculture, mining, energy, forestry and fisheries. Canadians have invented everything from better barley to the first successful process for freezing fish. Marquis wheat, developed by Charles Saunders, won the West after its introduction in l908 because it could ripen in just 100 days. This was important because the first frosts come early to Canadian prairies. The self-propelled combine harvester, built in l937 by Thomas Carroll, rolled all stages of wheat harvesting--binding, stooking, threshing and cleaning--into one operation. This remarkable innovation benefited farmers all across North America.

Even Canada's geographical size, harsh climate and varied topography have inspired innovations in transportation. In l937, Armand Bombardier received his first patent for a rubber-cushioned drive wheel and track. This turned into the first commercial multi-passenger snowmobile and eventually the two-person Skidoo so vital to winter life in Canada.

Great distances made aircraft especially important in Canada's growth. The variable pitch propeller, developed in l922, made the air transport industry possible by allowing planes to carry heavy loads. The first commercial jet in North America and the second in the world, the Avro Jetliner, was built in Toronto. DASH-7 and DASH-8 are names well-known in small plane technology for their success in short takeoff and landing technology.

A scattered population also encouraged communications technologies. We all know about Alexander Bell and the telephone, but Bell also invented the lighted switchboard and audio-phone, developed the basis for radio, tape recording and T.V., and invented the gramophone: all of this took place in Canada. In l927, the Creed telegraph system was the first combined transmitting and receiving teleprinter ever invented. Creed's system made the expansion of the news wire services possible, and increased the amount of news available to newspapers. Another innovation was the wirephoto system, which allowed people to have photographs to go with news stories. More recently, Northern Telecom has become a world leader in digital telephone switching systems.

In medicine the list of Canadian accomplishments includes the discovery of insulin by a team at the University of Toronto, the first mobile blood bank, the first practical diagnostic test for cancer, and the use of cobalt for its treatment.

These are only a few of the inventions and innovations that are part of Canada's history. Unfortunately, Canadians have not always managed to find the financial and marketing support needed to transform their inventions into innovations. With our natural resources in great demand throughout the world, it was often easier and more immediately profitable to invest in resource development. Today, with technological innovations determining international competitiveness, Canadians are becoming more aware of the importance of exploiting their ideas in the world marketplace.

successful innovation must have two characteristics -- it starts with a good technical idea and it provides something people need. An innovation might be a new product or a new process (or way of doing things). In either case, the development of an innovation goes through a series of stages that connect the idea to the marketplace like a chain. The first two links in the chain are invention and then development, which are supported by research. These are followed by commercialization and distribution, which are accomplished by investment and effective marketing techniques.

Those industries and countries that invest in research and development, or R&D, also have a greater capacity to create and use new technology. Canada spends much less in relation to the size of its economy than the United States or Japan. While this may not be surprising, we also spend less than countries such as Norway and Finland which have much smaller populations. Instead of creating new products, Canada tends to import innovations from abroad. As a result, our high technology trade deficit grows by 5% each year. This means we import much more technology than we export.

Canada pays a high price for using other countries' technology. Every $l million worth of imported computers or television sets costs ten Canadian jobs. Creating markets for domestically made technology would cut down imports. For example, although we have a large forest industry similar to that of Sweden (which invests heavily in R&D), we use Swedish chainsaws to harvest our trees. The key to innovation is commercialization, because an invention only becomes an innovation when it can be bought and sold. Studies of the innovation process show that successful innovators make the effort to learn what their customers need, and look for creative solutions.

Patents are considered one indicator of creativity, and reflect a country's capacity for invention. Each patent represents a potential innovation. As a source of new technology, however, Canada is relatively insignificant. We create only 0.3% of the world's patented inventions. Residents of other countries, mainly the United States, file over 90% of the patent applications in Canada. Conversely, Canadians take out relatively few patents abroad.

What do these numbers tell us? Although we produce only a small percentage of the world's new technology, we are viewed by other countries as a profitable market for their innovative products and processes. If Canada, on the other hand, were more active in promoting abroad the new technology we do generate here, the first two links in the innovation chain could be greatly strengthened. Some of the money earned through the sale of our technology could be used to support more basic research.

he third link in the chain from idea to innovation is technology transfer. In order to take a new idea or invention from the laboratory to the industry where it will become a product or process, a system for transferring technology must exist. Because Canada creates only a small percentage of the world's patented inventions, it is in our interest to encourage the transfer of technology to Canada from elsewhere. Through multi-national corporations and licensing agreements, Canadian firms gain access to technology which they may be able to use to create innovations. However, other companies and countries recognize that the newest technology gives them a competitive advantage, and are beginning to protect their discoveries. Without its own technology to trade, Canada may see its access to the latest technical breakthroughs greatly reduced.

Within Canada, technology is transferred through consulting companies, patent agencies, and brokerage agencies (which sell new ideas) and through industrial associations and research institutes. In addition, federal and provincial governments help private business to gain access to and commercialize the results of government research through technology centres and offices of technology transfer. Contracting out government projects is another method of promoting technology development and transfer.

These efforts to strengthen the transfer link are critical to innovation, because very few companies in Canada carry out extensive research and development on their own.

The fourth and final link in the innovation chain is the diffusion or distribution of the new technology beyond the first users. The first users of a new process or invention often take the greatest risks, because they must pay the cost of working out the initial "bugs" and problems. Remember that a particular technology can often be adapted to a number of different uses. One factor which may slow the flow of a new technology into an industry is the size of companies. Canada has a relatively large proportion of small and medium-sized enterprises. Smaller companies often cannot afford the risks of investing in expensive new technology. Smaller companies also may not have the knowledge or personnel to identify what technology they need or the time to work out how an idea could be adapted to their own use. Regional disparity can play a role in the diffusion of technology. In a country such as Canada, companies in some regions will have more ready access and be better equipped to use new technologies.

Innovation is a risky business. A variety of factors can break the chain. No one can predict for certain what the results of research will be. No one can know in advance how consumers will respond to an innovation. Often returns on money invested in a particular innovation may lie far in the future. Many important inventions -- semi-conductors, nylon and television, for example -- took years to develop. But the results of not innovating are certain: loss of profitability and deterioration of competitiveness.

Government, industry and universities each have their role to play in forging the links in the innovation chain. A coordinated effort by all three ensures that innovation is strongly supported.

Countries that are most successful in developing, using and selling new technologies have systems of research, development, design and commercialization to support innovative efforts. Industries and universities work together, while government contracts promote innovation, and special financing arrangements help companies to market their technologies internationally.

In l991 industry in Canada spent more than $3 billion on research and development -- 54% of the approximately $6.5 billion invested in R&D across the country. While $6.5 billion seems like a large amount, it is still much less than that spent by other major industrialized countries. Many business leaders agree that the total national expenditure on R&D is not enough, but they also think that their own companies already spend enough. Perhaps this is because, until recently, firms in Canada have been able to acquire technologies from other countries fairly easily. In Canada approximately 50,000 businesses are involved in manufacturing and in technology-dependent services; less than 3% of these do any R&D at all. Most Canadian firms rely instead on borrowed or imported technologies. This easy access may disappear, however, as other countries begin using technologies as competitive bargaining chips.

Canada does indeed have its own success stories. Our communications industry has invested heavily in R&D since the mid-1970s, and now competes internationally in the area of microelectronics, as well as in digital and packet switching. Aircraft and parts manufacturers have made substantial commitments to research and development, and businesses which provide engineering and scientific services are also major spenders. These groups together account for about 50% of the R&D expenditure by Canadian industry. In the past, the petroleum industries group was also a significant performer, but spending by this group has declined due to the uncertainty in oil prices. At the same time, however, clusters of high-tech companies have sprung up across the country -- in Ottawa, Saskatoon, Victoria, and other cities -- to take advantage of Canadian advances, especially in information technology. This is possible wherever skilled, well-educated workers can be combined with venture capital and supported by university and government laboratories.

Qualified researchers, engineers, scientists and technicians are essential to innovation. Thus universities, which provide this critical training, are important builders of the innovation chain. They also do a significant amount of basic and some applied research. Canadian universities have world-class expertise in such fields as lasers, synthetic fuels, remote sensing, and computer software. The 50 degree-granting universities in Canada carry out approximately 25% of the R&D in Canada, and the spending by universities on research compares favourably with many other countries.

The bulk of funding for university research comes from the federal government through its three granting councils: the Natural Sciences and Engineering Research Council (NSERC), the Medical Research Council (MRC), and the Social Sciences and Humanities Research Council (SSHRC). Faced with tight government budgets, universities are also reaching out to industries for financial support in an effort to demonstrate the importance of partnership and cooperation in the R&D process.

Examples of these university-industry links are the Centre for Cold Ocean Engineering at Memorial University, the Manufacturing Technology Centre at the University of New Brunswick and the Canadian Industrial Innovation Centre at Waterloo University. Courses with titles such as "Creativity and Innovation" and "Entrepreneurship for Engineers" are found in engineering and business faculties across the country. Many universities have also set up offices of technology transfer to serve as points of contact between the university research community and industry. These offices have helped raise research funds, have earned money on patents and demonstrated the value of dealing with the private sector.

Government has a long tradition of involvement in science and technology. There are federal research laboratories in every province. Government provides a supportive economic climate by allowing tax concessions on expenditures that qualify as furthering research and experimental development. It has three major direct granting programs for industry and the National Research Council carries out a broad range of scientific activities.

Other government supports take the form of disseminating science and technology information, public awareness initiatives and training activities. Efforts have been made in recent years to strengthen the relationship of government R&D with industry. Government buying and contracting-out, for example, can encourage innovation. In Canada, the federal government alone purchases over $6 billion worth of goods and services each year. By purchasing new technology, government provides a measure of security to companies providing new products, services and processes and lessens the risk involved in innovation.

Governments have recognized the growing importance of innovation. In l987 federal, provincial and territorial ministers signed the National Science and Technology Policy. The policy sought to encourage economic, social, cultural and regional development by increasing activity in science and technology. Its six objectives included improving industrial innovation and diffusion, developing strategic technologies, ensuring a pool of highly qualified people, supporting basic and applied R&D, dealing with the effects of technological change on society and promoting a more science-oriented culture. This initiative represented an important formal commitment to the role of science and technology in Canada's future.

he importance of competitiveness and economic growth is clear, but what about the consequences of technological innovation, especially in the workplace? The impact of technology on jobs is a complex issue, because people will be affected by both the number of jobs to be lost or gained and by the type and quality of jobs created. A research report published by the Economic Council of Canada concluded that the adoption of high-tech innovations in Canada will change the way Canadians work and will be very hard on some individuals. In the past, technological changes have not brought about serious unemployment because new technologies were introduced in times of economic growth. Unemployment was short-term while people either retrained to acquire new skills or simply found other jobs. In the present economic climate, the future is much less certain.

Different industries are affected in different ways. For the automobile industries, adopting new technology has meant job losses. Computer integrated manufacturing (CIM) has created more highly skilled jobs, but has been responsible for considerable loss of middle-level jobs. On the other hand, though word processors and automated accounting technology were predicted to make secretaries and accountants obsolete, in reality these innovations have freed employees up for more tasks and other types of work. Jobs that disappear in one sector will often turn up in another, thus making necessary the development of retraining programs. But retraining has generally been inadequate as few firms have much experience with retraining on a large scale. Educational institutions have not addressed the retraining of employed workers to the same degree that they have the retraining of the unemployed.

The concept of innovation has touched the area of job design itself. Socio-technical systems (STS),for example, combine both human and technical elements in job descriptions, creating semi-autonomous or independent work groups which are responsible for a natural, whole unit of work -- the assembly of a complete automobile engine, for example. This allows individual workers within a group to learn and carry out a wide variety of tasks, to take on added responsibility and to be involved in decisions concerning the production process.

The well-known quality circle developed in Japan incorporates many of these components. Workers discuss and monitor production problems and implement solutions with the approval of management.

Employees in such work systems often participate in profit-sharing and cost-saving schemes and receive productivity bonuses. The positive effects of these initiatives are increased job interest, less absenteeism and better labour-management relations.

Organizational innovations are a natural offshoot of technological change. Many companies in Canada continue to operate in the traditional ways that most of their managers grew up with. As more and more companies adopt the newest technology, organizational changes will be necessary to ensure that companies keep the well-trained, committed workforce necessary to successful innovation.

ations all over the world are recognizing that technological innovation provides the competitive edge in international trade. To be a successful runner in this technological race, Canada must take steps to alter its high technological trade deficit and low level of industrial research and development. Our strengths lie in our inventive spirit, our well-educated and skilled population and our long history of investment in science and technology in the public sector.

Although we cannot excel in every field, we have made a good start in ocean industries, environmental technologies and telecommunications. It would seem that a cooperative national effort with all sectors of the economy working together could produce a plan for selecting and investing in the technologies that best serve our needs and are also sought after on the global market. Canada has an opportunity to build its future on technological innovation. Finding the means may be the greatest challenge to our creativity yet.