The Need For Innovation
Alberta has a strong history of innovation, and will need more
Michael Ganley is the editor of Alberta Venture. BizBeat takes a big-picture view of the provincial, national and international news affecting Alberta's business community. He can be reached at firstname.lastname@example.org and @MikeatVenture
by Michael Ganley
Two years ago, Todd Hirsch, ATB Financial’s chief economist, wrote an introduction to our annual list of Alberta’s 25 most innovative organizations. It was shortly after he had published his book, The Boiling Frog Dilemma: Saving Canada from Economic Decline, in which he discussed innovation at length. I’d like to return to a few of the points Hirsch made.
First, his definition of innovation as “the application of an existing technology in a new and useful way.” Innovation is distinct from invention, he wrote, which is rare and should only be applied to the creation of something brand new, unlike anything seen before, like the first phonograph, penicillin and the Internet.
Innovation is also distinct from design improvements, which are more common, and still valuable, but not as influential as true innovation. Apple’s iPod, for example, was not an invention, nor was it an innovation, but rather it was the application of design to an existing device: the MP3 player.
An example of innovation that Hirsch highlighted is the automobile. It was the application of two existing technologies, the four-wheeled carriage and the combustion engine, into something very useful. Another is the humble Post-it note. 3M didn’t invent anything (both paper and glue had been around for years), but the two combined in a new and unique way and now, for better and for worse, they’ve kind of taken over our office spaces.
Here in Alberta we have seen some profound innovations, Hirsh noted, many of which have come about because of the tremendous complexity of producing oil from oil sands. The leading one is probably steam-assisted gravity drai nage. “Nothing was invented,” he wrote, “but it’s clearly more than just a design improvement on the traditional mining technique. It’s an entirely different way of using existing technologies to extract bitumen.”
In this issue, we highlight 25 organizations that are continuing in that tradition of innovation. I have no doubt that every year, our magazine will have a host of companies from which to choose for this list, living as we do in a province that relies heavily on the oil sands, with all their economic, social and environmental challenges.
Energy is coming from – and will increasingly come from – all kinds of sources. In many hot jurisdictions, solar is matching fossil fuels on a cost per joule basis. There are environmentalists arguing for nuclear power in light of climate change, seeing it as the lesser of two evils. There is hydro and wind and tidal and geothermal, many of which are making great strides in their efficiency and usefulness, and which, as the ravages of climate change continue to show themselves, will be developed and implemented with increasing urgency. Then there are more experimental energies like nuclear fission and thorium, and there are efforts at conservation.
That is not to say that we won’t be pulling oil from the ground in northern Alberta for decades to come. We will, but just how much will depend on a number of factors. It will depend on the price of oil, access to markets and cost of production, and on oil companies’ ability to secure the social licence to operate, which is something they frequently struggle with. And it will depend on our ability to innovate. Innovation will keep the cost of producing that oil down, reduce the amount of energy and water required, adequately protect the environment, and even help create the social license to operate.