Yukonomist: The Power of Spend

Yukonomist Keith Halliday

Yukonomist Keith Halliday

Innovation is a buzzword heard in economic development meetings from Whitehorse to Warsaw.

Knowledge economy. Value add. Innovation sprints. Agile scrums. Intellectual property strategies. Internet of things. Venture finance. If buzzwords alone could invigorate growth, the problem would have been solved and a lot of officials, consultants and innovation gurus would be looking for other work.

Governments try hard to re-create the magic of Silicon Valley in their jurisdictions. But it’s easier put in a vision statement than done, whether that is for Silicon Fen (Cambridge, England), Silicon Cape (South Africa), Silicon Wadi (Israel) or Silicon Taiga here.

Governments aiming to create Silicon Whatever often staff up innovation agencies, fund incubators, provide juicy tax breaks and even invest tax dollars in promising startups. This is helpful.

But they often neglect one of their most powerful tools: their spend. Many governments are the single biggest purchaser in their region. For innovators trying to move their idea from pre-revenue potential to demonstrated commercial traction, an early government contract can be a godsend.

Plus, an early client can help fine tune the product. And it’s embarrassing at sales meetings with other potential clients if you’ve invented a new widget and your local Department of Widgets keeps buying from IBM.

The most famous examples of the spend effect on innovation are the U.S. space program and Defense Advanced Research Projects Agency (DARPA) back in the 1960s. The purpose of one was to put a man on the moon (yes, that’s how they described it back in the day) and the other to procure innovative weapons for the Cold War.

But the massive spend on those programs supported innovation that we still enjoy today. NASA agency historians have tallied up over 2,000 inventions from camera phones and water-purification systems to thinner, warmer underwear. DARPA has left us with the internet, flat-screen displays and GPS geo-location technology.

More recently, governments such as Singapore’s have also used their spend to support local innovators while at the same time helping government agencies be more effective and efficient. Singapore puts out “Calls for Solutions” where a government agency specifies a broad problem and asks for innovative solutions. Firms that come up with one can get an early government contract to help refine their idea, implement it and (hopefully) sell it successfully elsewhere. One recent example was a call for ideas to improve the energy efficiency of government buildings by 50 per cent by 2030. Another is looking for ways to identify land boundaries and encroachments in real time.

There are also examples of government projects jumpstarting innovation closer to home. In Alaska, the state government is using drones to inspect bridges. In Fairbanks, the highways department uses a network of internet-of-things sensors on its roads and vehicles, combined with advanced analytics, to improve the efficiency and effectiveness of snow clearing. Using real-time data and better predictive software beats both looking up at the sky and relying on the regional weather forecast. This can improve safety and cut costs.

Scrambling a gravel truck onto a distant road that isn’t actually icy is a waste of money. But if the weather is good at headquarters while they’ve got freezing rain in the next valley over, not scrambling one is dangerous.

Microsoft, whose Azure cloud-computing platform is part of the solution, highlights the Fairbanks project as an example of government innovation.

Here in the Yukon, the territorial government’s billion-dollar spend dwarfs the next biggest budget of any company or government.

I did a quick scan of the Yukon government’s contract database to see how a selection of award-winning Yukon startups were doing with their biggest potential local client. Apprendo, which offers digital learning platforms to organizations, had 17 contracts worth $667,476 since 2018 from the Public Service Commission and Highways and Public Works. Proof Data Technology had 14 contracts worth $484,750 since 2018 from the Yukon Legislative Assembly, Highways and Public Works and Community Services. Kryotek, which creates drilling technologies and climate sensors, had 11 contracts worth $310,169 from 2014 to 2017, but none since it won a 2018 Arctic Innovation Award and Arctic Kicker Prize from the University of Alaska Fairbanks. Phylo Technologies, which won the 2019 Yukon Innovation Prize, does not appear in the contract registry.

Those contracts were surely invaluable to these young companies. But I suspect a top official from the Singapore government would observe that the total is a tiny sliver of total departmental spend, and might ask how many Yukon government departments have tried as hard as they might to bring innovative solutions to the core of their mandates. How many departments have issued Singapore-style Calls for Solutions to local innovators around their biggest problems? If you google Microsoft and the Yukon government you don’t get innovation case studies, just time zone updates for Windows and a link to an Xbox computer game called The Hunter: Call of the Wild – Yukon Valley (where players apparently “hunt gray wolves, grizzly bears, and more as you trek through burned down forests.”)

It can’t be the case that just starting a new company with the word ‘innovation’ on its website entitles you automatically to a chunk of our transfer payment. There are good reasons why most government procurement has strict processes in place to make sure government gets products that work at reasonable prices. But, kind of like you might take a small fraction of your retirement savings and invest them in riskier technology stocks, the Yukon government should think about how to steal a few ideas from Singapore.

One idea would be to put a few million dollars into a central fund. Enterprising assistant deputy ministers with a hairy problem could be empowered to draft a problem statement and put out a Call for Solution. If Yukon innovators come forward, it could be the start of something big for both officials and entrepreneurs. If not, the government can simply go back to doing whatever it was doing before.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist and received the bronze for Outstanding Columnist in the 2019 Canadian Community Newspaper Awards.

Yukonomist

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before conducting a test with it on Nov. 24. (Crystal Schick/Yukon News)
An inside look at the COVID-19 drive-thru testing centre

As the active COVID-19 case count grew last week, so too did… Continue reading

Conservation officers search for a black bear in the Riverdale area in Whitehorse on Sept. 17. The Department of Environment intends to purchase 20 semi-automatic AR-10 rifles, despite the inclusion of the weapons in a recently released ban introduced by the federal government, for peace officers, such as conservation officers. (Crystal Schick/Yukon News file)
Environment Minister defends purchase of AR-10 rifles for conservation officers

The federal list of banned firearms includes an exception for peace officers

Yukonomist Keith Halliday
Yukonomist: The K-shaped economic recovery and what Yukoners can do about it

It looks like COVID-19 will play the role of Grinch this holiday… Continue reading

Jodie Gibson has been named the 2020 Prospector of the Year by the Yukon Prospectors Association. (Submitted)
Jodie Gibson named 2020 Prospector of the Year

Annual award handed out by the Yukon Prospector’s Association

A number 55 is lit in honour of Travis Adams, who died earlier this year, at the Winter Wonderland Walk at Meadow Lakes Golf Club in Whitehorse on Nov. 24. (Crystal Schick/Yukon News)
A new take on holiday traditions

Winter Wonderland Walk, virtual Stories with Santa all part of 2020 festive events in Whitehorse

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Help make children’s wishes come true

Black Press Media, BraveFace host mask fundraiser for Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Karen Wenkebach has been appointed as a judge for the Yukon Supreme Court. (Yukon News file)
New justice appointed

Karen Wenckebach has been appointed as a judge for the Supreme Court… Continue reading

Catherine Constable, the city’s manager of legislative services, speaks at a council and senior management (CASM) meeting about CASM policy in Whitehorse on June 13, 2019. Constable highlighted research showing many municipalities require a lengthy notice period before a delegate can be added to the agenda of a council meeting. Under the current Whitehorse procedures bylaw, residents wanting to register as delegates are asked to do so by 11 a.m. on the Friday ahead of the council meeting. (Crystal Schick/Yukon News file)
Changes continue to be contemplated for procedures bylaw

Registration deadline may be altered for delegates

Cody Pederson of the CA Storm walks around LJ’s Sabres player Clay Plume during the ‘A’ division final of the 2019 Yukon Native Hockey Tournament. The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28 in Whitehorse next year, was officially cancelled on Nov. 24 in a press release from organizers. (John Hopkins-Hill/Yukon News file)
2021 Yukon Native Hockey Tournament cancelled

The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28… Continue reading

Lev Dolgachov/123rf
The Yukon’s Information and Privacy Commissioner stressed the need to safeguard personal information while shopping this holiday season in a press release on Nov. 24.
Information and Privacy Commissioner issues reminder about shopping

The Yukon’s Information and Privacy Commissioner Diane McLeod-McKay stressed the need to… Continue reading

Most Read