SPEECH
October 28, 2008
Remarks for the Minister of Research and Innovation John Wilkinson
Canadian Society of Value Analysis 2008 Conference
Tuesday, October 28, 2008 - 8:15 am
Holiday Inn Hotel and Suites, Markham, Ontario
Check against delivery.
INTRODUCTION
Good morning.
I’d like to thank the organizers for inviting me here today, Steve for your kind introduction and Dave for being a proud Canadian on the international stage.
As Minister of Research and Innovation, I’m excited to address a room packed with people dedicated to the never-ending quest to improve the way we do things.
That kind of tireless curiosity is exactly the approach that our Ministry — and our government — is working to encourage right across this province.
Like you, we want to help enterprises everywhere get better at finding new opportunities to innovate.
VALUE ANALYSIS
As you all know, the field of value analysis was born of the need to keep General Electric’s production lines rolling despite the materials shortages that were part and parcel of World War II.
A young engineer, Lawrence Miles, was assigned the task of “finding, negotiating for and getting” materials critical for the production of parts that GE was manufacturing to support the Allied war effort.
The trouble was, no amount of effort could get materials out of frequently over-extended suppliers.
So, Miles was forced to innovate.
Instead of concentrating on the materials he couldn’t get, he focused on the functions those materials needed to fulfill.
He then implored his suppliers to find him something that would meet that need ... something they could actually deliver.
It turned out that these substitutions not only kept the production lines running, they often reduced costs, improved products — or both.
From Miles’s simple question a whole discipline was created — the discipline that brings us together today: value analysis.
The job of value analysis, in Miles estimation was “...to achieve the objectives of the organization.”
“If it is a business,” he said, “it is to compete financially, profitably in a competitive market, with a product that the customers are buying and keep them buying it.”
In other words, value analysis is a system for identifying opportunities to innovate ... then applying them to make an organization more efficient, more effective and more competitive.
FIVE POINT PLAN
That’s also a pretty good description of Ontario’s approach to innovation.
And the reason we’ve embraced this approach is because we believe it’s the best way to address the economic reality we now face.
In a competitive global environment, where people can purchase nearly any item from nearly anyplace on the globe, Ontario has two choices.
It can ask its workers to lower their expectations — and wages — to ensure we can compete with other low cost jurisdictions.
Or, it can find opportunities across the economy to innovate, to continually improve products and services and compete by being the best ... not simply the cheapest.
Our government believes the choice is clear: we must innovate.
That’s why innovation is an integral part of our five-point economic plan.
Because, like Laurence Miles, we recognize that the only way to avoid falling behind in a competitive marketplace is to continually strive to stay one step ahead.
ONTARIO INNOVATION AGENDA
We have a plan to unleash the talent of Ontarians to make this province the place where great ideas propel successful enterprises: Ontario’s Innovation Agenda.
This $3-billion Agenda focuses on areas where this province has the research and business capabilities to not only compete … but to dominate world markets.
These areas touch on some of the most pressing needs of our time ... and cut across the entire economy.
Here are our priorities:
- Conquering disease through the life sciences,
- Advancing/expanding the digital universe, and
- Sustaining humanity through bio-based, environmental and alternative energy technologies.
GREEN ECONOMY
The last of these priorities lies at the intersection between a tremendous economic opportunity and the world’s pressing environmental concerns.
The economic opportunity is enormous.
According to an Ernst and Young study of 150 global companies – 90 per cent of those surveyed were undertaking climate change initiatives, with disclosed financial commitments totalling US$276 billion over the next ten years.
At the same time, concerns around environmental sustainability are transforming the way we live and work.
Greening the economy may be a tremendous economic opportunity, but to make Ontario’s economy more sustainable, we must do more than produce a whole new generation of green enterprises.
To succeed, we must also make existing industries more environmentally-friendly ... and more economically competitive.
SUCCESS: STANTON FARMS
That sounds like a daunting task ... and it is. But it represents an even bigger economic opportunity.
But, with some creative thinking, and value analysis, success is within our grasp.
Let me give you an example.
Earlier this summer, I was in London, Ontario to announce a commitment of $2.5 million to support collaboration between Western, the University of Guelph, the University of Waterloo, and Stanton Farms.
Stanton Farms is one of the largest dairy farms in this country.
Dairy farms have a problematic by-product: manure.
Nearby residents aren’t too happy about the odour.
As it decomposes, it gives off methane, a powerful greenhouse gas.
And, if the manure is spread on fields, there is a risk of contamination of local wells.
At the same time, large dairy farms need a supply of nutrient rich fertilizer and power — preferably clean power — to run a range of equipment.
Stanton looked at all those needed functions and came up with a single solution: a biodigester system that will turn manure and waste water into clean energy.
This facility will get rid of the odour, provide pathogen-free fertilizer, and take advantage of the methane gas to generate clean electricity — enough electricity, in fact, to power almost a third of the homes in the nearby town of Ilderton.
Even better: not only has this project solved a range of challenges at this particular farm — it’s created a solution to make all kinds of farms more efficient ... and a technology Ontario can sell to the world.
A ROLE FOR VALUE ANALYSIS
The Stanton Farms project is a great example of what Ontario is striving to achieve right across our economy.
In Ontario’s Innovation Agenda, we talk about it in terms of creating a “culture of innovation” …..
…An Ontario that attracts and encourages people willing to take a risk ... to try new things ... to wonder “what if” ... and answer with “why not!”
Value Analysis is an important tool for building this culture — particularly within existing enterprises and industries.
By systematically looking for opportunities for innovation ... value analysis gives organizations across Ontario a way to integrate the innovation culture into their own corporate culture.
TOXIC REDUCTION STRATEGY
An area where this approach, I believe, will prove valuable is in supporting Ontario’s efforts to reduce the use of toxic substances.
Across this province, we use toxic substances to meet certain functions within our factories, businesses and homes.
Many of these substances meet their intended function very well ... but they can also threaten our health, the health of our children and our environment unless we all do our part to manage their use to reduce the risk.
That’s why the McGuinty government has developed a proposal for a Toxic Reduction Strategy that will help build a greener more sustainable economy for Ontario.
The proposed strategy will focus on reducing toxics before they are used in industrial processes.
That means the function that these toxic materials once served will need to be served by healthier, greener alternatives.
In fact, the strategy will help industry build its capacity for research and the development of green technologies to reduce their reliance on toxics.
It is a process that will require industries across the province to embark on an analysis of their own processes, leading to new and less toxic ways of doing business.
As other markets around the world embark upon similar efforts to reduce toxic products, that effort will make Ontario companies more competitive.
And, if companies take a value analysis approach to the function these substances meet ... there may very well be the opportunity to not only reduce the health risk ... but to also find a better, cheaper and more efficient way of doing business.
STRATEGIC OPPORTUNITIES PROGRAM
At the heart of Ontario’s Innovation Agenda is the belief that the role of government is to be a catalyst in growing the innovation culture in Ontario.
That means supporting talented people — and bringing people with different talents and perspectives together.
Laurence Miles once said:
“A chemical not yet compounded does not exist, and a metal not yet developed does not exist — not because they are not possible, but because the required combination of creativity and knowledge has not yet been associated.”
We believe that sometimes the best way to get the right combination of creativity and knowledge together is to find new ways for enterprises to collaborate.
One great example of that is our Strategic Opportunities Program, an important component of our $1.15 billion Next Generation of Jobs Fund.
The Strategic Opportunities Program recognizes… that some of the most interesting and most valuable opportunities out there are too big for one organization to tackle alone.
For example, when humans decided to reach for the moon, it took over 20,000 industrial firms and universities working together with NASA to get there ... working on everything from building incredibly powerful rocket engines to determining how to protect astronauts from the tremendous dangers of space travel.
If Ontario is to truly go after global opportunities, like greening the economy or curing disease ... if we want to think big ... we must find ways to bring together groups of different organizations that can tackle all the pieces of the puzzle.
So, the Strategic Opportunities Program supports Ontario industry-led consortia of companies, researchers, universities and not-for-profit organizations in the pursuit of some of the incredible opportunities emerging within high-growth, innovative areas.
We believe that bringing together the best this province has to offer creates tremendous opportunities to innovate in a way that can ripple right across entire industries… and make participating companies more effective, and more globally competitive.
CONCLUSION
A culture that encourages innovation is critical to ensure Ontario can compete — and win — in an increasingly globalized economy.
I believe the people here today are at the vanguard of that culture.
You not only believe in the power of innovation — you’ve created a system ... a practice ... to help others integrate innovation into their organizations.
That’s important for Ontario companies and its critical for the future of this province’s social and economic well-being.
Because that process of looking for opportunities to innovate never ends.
The McGuinty government shares your commitment to never rest in the pursuit of better ways of doing things.
And, we thank you for helping grow our culture of innovation.
Together, we will create an Ontario powered by the most powerful, most abundant resource we have: the talent and creativity of our people.
