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Does innovation have to mean jobs?

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Markets bounce around and I have no idea how this will have evolved by the time you read this, but when I wrote this column the hot parlour game for market geeks was guessing when Apple would pass Exxon to become the world’s most valuable company for market capitalization. Apple now has more liquid assets than the U.S. Treasury. Apple’s really freaking big.

I brood over this news because a detail leaped out at me in July, when Apple announced their financial results for the third fiscal quarter of 2011. Obviously it was full of good news: Revenue and profits doubling from a year earlier to establish, in both cases, new company records. One reason Apple doesn’t run those cute “I’m Apple, I’m PC ” ads any more is that the point is moot. Nobody cares what happens to PC any more.

But what struck me was this: three-quarters of Apple’s unit sales in Q3 2011 were in product lines that didn’t exist when (to pick a random benchmark) Stephen Harper became Prime Minister of Canada. The company shipped 3.95 million Macintosh computers and 7.54 million iPods. But it also sold 20.34 million iPhones, a product launched in 2007, and 9.25 million iPads, a product Apple introduced in 2010.

Here’s where I make the point you knew I was going to make, about innovation. Everyone knows Apple has passed Exxon and Uncle Sam by selling products a little fresher than theirs. But it’s more than that: if Steve Jobs had relaxed in 2006 because he had the best music player and the coolest laptops on the market, he would have foregone all the growth his company has experienced since then. New ideas are really valuable.

But of course governments get that memo. In August, Stephen Harper visited McMaster University to announce the latest winners of the Vanier Canadian Graduate Scholarships. This new initiative pays for high-level research by the best Canadian and international graduate students. Six of the latest Vanier scholars will pursue their research at Western.

Why a new knowledge-economy program? “We are building a culture of innovation and high achievement right here in Canada,” Harper said. “The importance of this cannot be overstated. Research leads to discoveries and inventions, that leads to patents that build Canadian businesses and create Canadian jobs and that makes for greater prosperity for Canadian families and workers.”

To which an honest observer can only say: No it doesn’t.

If I were Katie Kryski or Fabrice Szabo reading the PM ’s remarks, I might be a bit nervous. Kryski and Szabo are two of Western’s new Vanier Scholars. They both  have dynamite research programs lined up. Kryski will examine the relationship between genetics and environment in determining vulnerability to depression. Szabo will compare Hugo’s Les Misérables with latter-day adaptations to see how a work is transformed and distorted as it finds new life.

Kryski’s work gives us a shot at a society with better mental health. Szabo’s might give us new clues about beauty. Worthy recipients, say I. But what they probably won’t do is lead to “patents that build Canadian businesses and create Canadian jobs,” and as I’ve written before, if we ever reach the day where that’s the only lens through which universities’ work is judged, then universities are going to be flat out of luck. But there’s another angle through which to look at all of this, and it’s why I started with the survey of Apple’s fortunes. You’re not going to find a company that builds more prosperity through discovery and invention than Apple, and none of its game-changing innovations since 2007 have come out of a university lab.

Universities weren’t irrelevant, of course: Apple engineers and designers come from some of the best schools, and advances in flat screens and battery life come from research. But you don’t own an iPad because it has a unique screen or a perfect battery, because it really doesn’t. You own it because it embodies new notions about what a computer can do in your life.

A couple of years ago Harper got in trouble for skipping a United Nations meeting in New York City so he could hold a photo op at something called the Tim Horton’s Innovation Centre. Oh, we had a chuckle over that one.

Laser crullers! Quantum Timbits! But actually, a place like Tim Horton’s needs an innovation centre, because no company in a competitive market should rest on its laurels. ‘Innovation’ here might look like adding drive-through lanes, which have the effect of multiplying a restaurant’s virtual floor space without adding to the rent bill. An innovation is just an idea that hasn’t been tried.

We’re getting a lot of this backwards in Canada. Governments that want to “produce more innovation” look first to the elements of society they control most directly: universities, granting councils, ribbon-cutting ceremonies. The universities dutifully stack up breakthroughs like cordwood — by any measure I’ve seen, Canadian universities are good at producing influential research — but Canadian businesses don’t change their ways, because they don’t know how or they don’t even know they’re supposed to.

When we make “innovation,” “jobs” and “university research” synonymous, we put unfair distorting pressure on university science, we let business off the hook, and we get frustration instead of prosperity. Business schools can play a huge role in getting innovation right. So can design schools. Internships to get smart kids out of labs and onto shop floors. But first things first: we need to understand that productivity breakthroughs happen when businesses pick a new idea up, not when labs push one out.

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