Innovation as a driver of competitiveness

In my conversations about Canada’s competitiveness, the topic of innovation as a key driver always arises. Yet surprisingly, I hear many differing definitions of what innovation means depending on whom I’m talking to. Let’s look at innovation and what it entails, and then look at the processes that need to be in place to ensure it happens.

Innovation and productivity

If competitiveness means providing the market with what it needs, wants and demands at a price it is willing to pay, and being able to do that successfully over time, then innovation comes into play in all aspects of that definition. Innovation can mean creating new products or product characteristics that meet the changing demands of the market. So, in that way, it is dependent on understanding the key drivers or trends in the market place and changing with them as they evolve over time, not doing things as we’ve always done them. It means looking forward to where those trends are leading and trying to change your products over time to stay aligned with those projections. Are you doing that? Are you doing it well?

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Innovation also means developing those products so that they can be made with the highest level of quality possible at the most affordable price possible. Therefore, innovation can have a major impact on cost and productivity. Design it right and it uses less materials, and can be produced more efficiently at higher speeds using less energy and generating less waste, with greater assurance of food safety. Now that’s innovating!  Are you doing that? Doing it well?

Research to commercialization

There is also another aspect of innovation that needs to be understood. There is an innovation value chain reaching from basic “blue sky” research, to applied research, to commercialization of new applications and discoveries. Many new innovations get lost in what is sometimes called “the valley of death” because they can’t find the funds to commercialize. While most large multinationals rely on their global technical centre to look after that for them, smaller companies often lack the technical resources to stay attuned to what’s happening in research.

A challenge, then, is how to better connect the research-to-commercialization value chain, connecting with universities and research centres, and bringing more innovations to the market. That includes innovations that are formula-related, like functional ingredients to enhance health; packaging-related like biodegradable plastics; or process-related like high-pressure processing. But how do we collaborate with our value chain partners – our suppliers and their suppliers, and yes, our customers too? And what processes must you have in place to ensure the greatest degree of innovation?

Knowledge sharing

First we need to understand the market. This has traditionally involved a market research function, usually under the control of sales and marketing, which focuses on understanding consumer trends, usually only in North America. But what about exports? There’s also a responsibility to make sure the rest of the organization understands what’s happening out there, particularly product developers. Also consider the purchasing department, which buys the packaging, engineers who buy the equipment, and the operations department, which sets up the processes.

In large companies the market research department does this research, and in small companies it’s probably the CEO or owner. The point is that information needs to be shared, and a clear “innovation strategy” for the organization developed. Are you doing that? Are you doing it well?

So, are we innovative? Well, can you name 10 new breakthrough product, packaging, or processing innovations that have come from Canadian food companies and that have made us more competitive? No, we’re not as innovative as we need to be in order to be globally competitive over time. We need to change.

Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at gfread@sympatico.ca