Canada’s Moonshot: Solving grand challenges through transformational innovation

Executive Summary

From COVID-19 to climate change, from the need to guarantee food security to how we cope with an aging society, from ensuring everyone has access to digital connectivity to repairing our country’s ravaged and threatened ecosystems, we face many deep and complex challenges as a society.

For all of these challenges, and many more, innovation has a key role to play. Yet Canada’s innovation policy framework does not sufficiently align innovation with solving the most pressing social, economic, and environmental problems that Canada and the world face today.

Canadian federal and provincial governments spend billions to foster innovation, but Canada remains stuck in what has been coined a “low-innovation equilibrium.” Despite producing some of the world’s leading research, we are not doing enough to harness the long-term economic benefits associated with catalyzing breakthrough inventions, or transitioning enough of these innovations through to commercialization at scale, with widespread adoption and export.

Canada’s Moonshot: Solving grand challenges through transformational innovation seeks to better understand how Canada can best use its innovation policy toolkit to intentionally direct, support, and fund innovation that solves the challenges we face—in other words, how we can reach for our own moonshots.

Moonshot innovation policies are outcome- and impact-oriented, with a focus on ambitious but specific and measurable goals. They seek to achieve transformational change, yielding sustainable economic, social, and environmental benefits. Solving the central challenge is the goal—not economic metrics like job creation or GDP growth. As Mariana Mazzucato has described, these economic spillovers “do not happen because you want them to: they happen along the way to solving bigger problems.”

Moonshot innovation policies focus on unaddressed needs, areas that are not priorities for public or private investment, either because of their complexity or their lack of profitability. And they are focused on long-term impact, seeking to create sustainable ecosystems by building out the connective tissue between different actors invested in solving challenges, whether they are from academia, industry, government, communities, or third sectors (NGOs or non-profit organizations).

There have been many reports, articles, and books that have examined the strengths and weaknesses in Canada’s innovation ecosystem. Canada’s Moonshot builds on these foundations, and, guided by the project’s expert advisory panel and informed by insights from interviews with innovation thinkers and practitioners, offers suggestions on how Canada can use a moonshot approach to innovation that not only solves those central challenges, but is also cognizant of the barriers and opportunities that come from our particular Canadian context.

Best Practices and Design Principles

Canada can draw on the experiences of other countries that have sought to deploy innovation policies to solve real-world challenges. Canada’s Moonshot puts forward five design principles to ensure the innovation continuum is supported end-to-end, from invention to commercialization. These principles draw from global successes such as Norway’s PILOT-E, the efforts to transform Japan’s energy system, and the Defense Advanced Research Projects Agency (DARPA), which, over its lifetime, has helped catalyze breakthroughs from the internet and GPS, to autonomous vehicles and mRNA therapeutics. The principles include:

• Select “grand challenges” that have clear, bold, measurable, and time-limited goals that are sector-, discipline-, and technology-agnostic and that align with top government priorities
• Seek a lean, agile, and independent governance structure
• Coordinate end-to-end support, using a wide range of policy instruments, to help scale the most promising ideas and help them reach their intended markets
• Create meaningful engagement with willing stakeholders, including existing innovation ecosystem actors, leading industry and research experts, communities, and the wider public
• Use a portfolio approach to managing risk, a high tolerance for failure, and an evaluation framework focused on learning and adaptation

Understanding Canada’s Innovation Landscape: Challenges and Opportunities

This report identifies six challenges that have historically impeded the success of transformational innovation, and that moonshot innovation policies must address:

1. Moving from an unintentional to an intentional innovation system. The bulk of Canada’s innovation policies have traditionally been unintentional in their design, focused on inputs not on impact, and for decades have generally failed to spur significant economic growth. Whereas, moonshot innovation policies are inherently intentional—seeking to provide direction to innovation toward a specific purpose.
2. Unleashing the power of demand-side instruments. Government measures such as procurement, tax incentives, pricing negative externalities, standard-setting, and regulations all have crucial roles in supporting a wider transition to new behaviors and technologies, and in shaping consumer behavior and market demand. There is often a disconnect between innovation inputs and these demand side levers—moonshots are an opportunity to close that gap.
3. Overcoming the challenges of coordinating between and within governments. Canada’s high degree of decentralization means that a range of important policy areas, such as health care and education, sit with provincial governments. This can complicate the ability to use moonshot innovation policies to bring a greater emphasis to demand-side instruments at the federal level, but it can open opportunities to experimentation and innovation with a wider range of actors if effort is put in to build coalitions across jurisdictional, sectoral, and disciplinary boundaries.
4. Centering inclusion and reconciliation in innovation. Canada has failed to build an inclusive innovation system and fails to engage with Canada’s full diversity of people, perspectives, and ideas. Deep and persistent inequities in the distribution of opportunities and benefits for innovation highlight the need for moonshot innovation policies that ensure inclusion and reconciliation are centered as key tenets of their design.
5. Connecting a complex innovation-actor landscape. Progress often gets stuck in a congested landscape of innovation actors, funders, agencies, programs, and other organizations that are frequently working in silos trying to solve a part of the problem. Moonshots can provide the pathways that smooth processes for firms and individuals that are, as Dan Breznitz describes, the actual “agents of innovation.”
6. Instilling a new culture around success. Current metrics and measurements of success are often more closely tied to short-term political needs and timetables than to the longer-term horizons and needs of innovating firms. Moonshots require a new approach that recognizes that investing in innovation can take time to succeed and that measuring impact is what matters most.

Deploying Moonshot Innovation: Policy Recommendations

The following five recommendations address some of the key governance, operational, and design considerations that will need to be considered when seeking to select and deploy moonshot innovation policies in Canada.

1. Define a clear grand challenge anchored in unaddressed real-world needs, through an open and inclusive consultation process. Grand challenges should seek to focus on unaddressed gaps that are not being sufficiently served by public or private investment, or where there is a need for an organization to serve as the connective tissue across disciplines and stakeholders to help build a sustainable ecosystem. These should be identified with meaningful consultation and engagement with diverse voices across Canada and should also reflect pan-Canadian opportunities to deliver public value. They should also be rooted either in distinct need, assets that can be successfully leveraged, or key existing strengths that would be served by the success of projects under it.
2. Facilitate policy innovation through providing delivery agencies with lean, agile, and independent governance structures. Government structures are oftentimes not suited for the nimbleness and experimental phases of the innovation process. While a national approach is needed, the delivery of moonshot innovation policies do not necessarily have to sit within the federal government directly. An independent agency has greater nimbleness and more flexibility as a neutral convener to engage with multiple levels of government, different departments and agencies, industry, academia, and communities.
3. Develop a portfolio of moonshot projects that are cross-disciplinary and cross-sectoral, embrace a range of different risk levels and types, and are inclusive of different types of individuals, organizations, industries, and regions. A portfolio of diverse multi-stage projects with varying scales and timeframes, along with a healthy appetite for risk and an openness to failure, can significantly increase the chances of landing a successful moonshot.
4. Support the full innovation continuum, and the full value chain, from invention through manufacturing, commercialization, and deployment, using the full policy toolkit of supply- and demand-side levers. The diversity of organizations in the innovation landscape means that there is a need for a “herding” organization that is able to crowd in different pools of existing government funding streams, different streams of activity and help connect-the-dots to commercialize and deploy innovations at scale. Achieving the moonshot also requires a focus on building out the “soft infrastructure” that helps create a successful ecosystem that is vibrant and sustainable in the long term.
5. Focus on the metrics that matter for the success of the grand challenge. It is important that grand challenges are guided by clear, central metrics that are consistent across projects and that have a strong focus on impact. For example, a net zero emissions moonshot should be measured by the amount of emissions prevented. Projects in the grand challenge portfolio should be actively tracked, with program managers who are empowered to end them early if they are failing to reach their targets. There must also be a focus on an internal culture of learning and experimentation to help improve impact over time.

Many of the resources needed for moonshot innovation policies already exist in Canada, but need to be brought together to streamline the process. The take-home message is that policymakers need to change their mindset. This includes taking more risks, not letting short-term political interests impede momentum, and engaging stakeholders, experts, and the public to really understand the biggest grand challenges that need solving. They cannot assume good outcomes are going to happen by chance.

A fundamental shift is required to embrace risk-taking, set clear outcome-oriented goals, foster collaboration across multiple sectors, and engage the private sector in partnerships that are oriented around solving problems using new ideas and technologies.

The potential impact from solving our challenges through moonshot innovation could be immense. If we can sustainably improve Canada’s social and environmental well-being, impacting real lives and addressing real problems, and along the way solidify our place in the global economy as a leader in innovation, then we really will have a shot for the moon.