Maybe, but …

2015-05-27-03-15-24-May.27111There is an interesting article in the Globe and Mail about leveraging defence procurement to improve our (rather sorry) national level of innovation. The article was written by Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries (CADSI), so it surely comes with a quite strong point of view.

On the surface the thesis is sound: look at what military technology has done, from the jet engine to the satellite. But one should also look deeper and, perhaps, take Ms Cianfarani’s thesis with a grain of salt. (Caveat lector: I worked, both in the military and, post retirement, in the private sector, in the radio-communications technology field, most specifically on national and global spectrum management issues; my personal experience suggests that, since about, say, 1970, the private civilian sector has been more innovative than the military but my experience and perceptions are narrow and may not be applicable to other sectors.

Ms Cianfarani says that “many of our allies have for decades used military procurement to drive innovation in their economies. The British, U.S., French and Swedish economies, for example, would not be nearly as innovative today had they not approached military procurement with a focus on developing key defence technologies and innovations at home that often to lead to wider commercial applications and then exporting them abroad. Canada has not traditionally been in that game.

I would agree that many of our allies have used military procurement to drive production european_data_relay_system_edrs_esa… but, how much of that production was really innovative is a matter of some debate. Sometimes the military acts as a brake on innovation. I know, from personal experience, that some innovative research has been shut done, thanks to pressure from allied militaries, when it showed some promise. In at least one case it was suggested, by a senior Canadian official, that Canadian research was frustrated because it threatened to “steal” a market opportunity from an ally.

It seems to me that real, fiscally conservative Conservatives ought to be suspicious of proposals to use defence spending as a lever. We ought to consider a few factors:

First, we ought to understand (believe, as a conservative article of faith) that all defence spending, every penny of it, while essential, is unproductive; it’s like our fire department or our car insurance, absolutely essential, and we want the best, but, in the end, something we do not want to use. Our primary goal should be to “buy” just as much military power as we really need at the lowest possible cost.

cp-dnd-lav-specsEgyptian_Air_Force_de_Havilland_DHC-5_Buffalo_JanuraSecond, when a Canadian vendor builds something good ~ and we have and are, right now, building “world beating” military equipment ~ the Canadian Government should get behind selling it to other countries. But we should always remember that we built and our government “supported” the Ross rifle, too. The lesson is that politicians and bureaucrats and generals are bad at “picking winners.” When we discover a Canadian “winner,” we should get behind it, all the way, despite the complaints of the political left, but the market will, always, pick the winner, politicians almost always choose “losers.”

Third, Canadians don’t like spending on defence. The conventional wisdom is that they will dislike it less if they are getting some jobs out of the deal. That’s why we will plan to spend, roughly, $1 Billion on a Canadian made warship which could be bought offshore, fitted up to Canadian standards, for about ⅓ of that price. Is that really trueowait? Was our, Conservative, commitment to build warships in Halifax why we won so many seats in Nova Scotia?

Fourth, there is a lot more to having an “innovative” culture and a “productive” economy then just leveraging one sector. It seems to me that the Industrial and Technical benefits programme, which Ms Cianfarani wants to exploit for the benefit of her industry, is just the latest iteration of the old Defence Industry Productivity Programme (DIPP) which was dumped in the 1990s, at the behest of Lloyd Axworthy who didn’t want Canada to be seen as an “arms merchant” (because he was looking for134502_2 his own Novel 10558392Prize). The simplest way to improve productivity is to make Canada “open for business” and encourage ~ through taxes, mainly ~ companies to make Canada “home” to their head offices and to their R&D centres. Canada has first rate universities and research centres and that, not in shipyards or aircraft plants, is where the keys to innovation lie. Ms Cianfarani is correct when she says that “the results” [of existing government strategies] “have been disappointing. Canada’s productivity growth, which is highly dependent on innovation, remains stagnant, at about 1 per cent a year,” but might that not be because governments (Liberal, Conservative and Liberal) have been looking for  “quick fix,” immediate results, and have focused too much on the Development part of R&D, which is, arguably, a corporate tool, and not enough on the Research part, where governments can be major actors?

Heaven knows I want a bigger, better, more productive economy, and I agree that improving our innovation and creativity is part of that. Equally, I want a strong, vibrant, productive and innovative defence industrial base. I sympathize with almost everything that Ms Cianfarani says … except for her focus on supporting one industrial sector, looking for the magic bullet, again, as we have done over and over and over again …


By Ted Campbell

Old, retired Canadian soldier, Conservative ~ socially moderate, but a fiscal hawk. A husband, father and grandfather. Published material is posted under the "Fair Dealing" provisions (§29) of the Copyright Act for the purposes of research, private study and education.

1 comment

Leave a comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s