DDP Research Memo #7: The Partisan Playground
How Canadians take part in the political discussion onlineThursday October 17, 2019
One consequence: the status quo is not a strategy for future success, anywhere. Information technology — — digitization — — has enabled globalization 3.0 and helped drive a broader technology revolution. A second consequence: a large gap has emerged between a world of “tech 4.0” and “gov/pol 1.0”.
More systemic; more global; more geopolitical; more interconnected; and more insecurity-related. Countries, and companies, need to adjust their “risk management” approaches for these new “global macro risks”.
“Top 5” Global Risks in 2017*
2. Involuntary migrations: MENA refugees; Iraq, others
3. Conflict: terrorist attacks; cyber attacks; interstate conflicts
4. Populism: unemployment; inequality; social stability
5. Failure of governance: national, international
*World Economic Forum, Jan, 2017
Over the medium term the challenge is mediocre trend (potential) growth, due to weak productivity growth trends and aging populations. The IMF’s updated forecast (April 2017) projects an improving global outlook, led by a pick-up in the US, Euro area and Japan, supported by continuing strong growth in China and India. There are three key global uncertainties: geopolitical, political and policy.
*Recent Canadian data have led the Bank of Canada to upgrade its forecast to 2½% growth in 2017 and 2018.
Risks to the Global Outlook
Less than 50% of the general population expresses trust in the core institutions of government, business, and the media in 20 of the 28 countries surveyed by the Edelman Trust Barometer. Trade displacing jobs, technology displacing workers and jobs, short-termism displacing long term investing — — are all elements of this loss in trust. Loss of trust nurtures populist and protectionist movements.
Its driving transformation and it is at an inflexion point, with disruptive innovations imminent in many fields. What is most disruptive is the combination of scale and scope of these technologies, and their speed of adaptation. It leads to the gap between “tech 4.0” — “gov/pol 1.0”; it also leads to a gap between “innovation frontier firms” — — those that can adopt at the pace of tech 4.0, and the rest — — the “innovation laggards”.
The consequence of this scale, scope and speed: to be a disruptor or be the disrupted?
•Do we have the technology and entrepreneurial capacity to be at the leading edge of disruptive innovations, which will drive growth and productivity and, at the same time, have we developed the innovative education systems and business education-government partnerships to reskill and retrain the workforce of this future?
•McKinsey estimates that 40+% of current jobs can be automated through these disruptive technologies.
The “Scope and Scale” of Disruptive Technologies
Canada has strong macro-economic foundations, a necessary but not sufficient condition for sustainable strong growth. Building on this foundation, Canada needs to better target talent, trade, innovation, foreign investment, infrastructure and skills to strengthen long term growth and diversify the economy.
Strong macro foundations
It is not defined by cheap inputs. The building blocks, in addition to strong research anchors, are: talent, capital, infrastructure, customers, trade/investment and brand plus leadership in selected transformative technologies and depth in key transforming sectors.
Innovation Ecosystem Blueprint
Talent — Develop, recruit, retain
Capital — Start-up, scale-up, grow-up
Infrastructure — Connecting the corridor, densifying the corridor
Customers: Procurement — Strategic procurement (start-ups), DARPA-type tech support
Trade and Investment — Start-ups going global, global tech anchor firms going local
Branding — Strengthen brand: attracts talent, capital, investments
Possible Transformative Technologies. Examples:
Possible Transformative Sectors. Examples:
Both Canada and China are in the process of “rebalancing” key aspects of their economies to respond to lower long term (potential) growth and economic imbalances. An efficient, innovative and trusted financial sector is crucial to successful rebalancing.
Income distribution rebalancing
We can better leverage the “Canada brand” in China, and Asia more broadly. In these turbulent times, when political stability, social cohesion, diversity, open trade and a solid economic base are in short supply globally, our brand should underscore that — — the world needs more Canadas.
Our global brand — Nice Canadians
… or …
Our future global brand — Nice+
Canada, and the “Canada brand”, have under-realized potential in China and Asia
In this changing world — — an era of disruption and uncertainty — — China and Canada have strong economic complementarities, as well as shared histories. It is time to turn the potential of our relationship into a shared reality.