Mark Goldberg


www.mhgoldberg.com





Fox Group Dispatch

Populism versus democracy

In the wake of last week’s “Brexit” vote, Janice Stein (professor at the Munk School of Global Affairs) wrote an interesting article on the TVO website, entitled “Lessons from Brexit on why referendums and democracy don’t mix.”

How well do referendums serve democracy? Not well, whether they fail or pass. Not well, because leaders always have to simplify complex decisions into a “yes” or “no” question. Not well, because referendums often give prominence to issues that are not at the top of voters’ priorities, as this one did.

She writes that complex matters are better suited for resolution by elected representatives who have the ability, through party leaders, to craft compromises. “Leaders in a referendum campaign have every incentive to oversimplify and over-dramatize, playing on people’s fears to get out the vote.”

I couldn’t help but think of populist campaigns that we have seen in the telecom sector, with some regulatory bodies and legislators crafting policy based on satisfying the loudest voices, rather than economic principles.

We need to be cautious pandering to populist waves, special interest groups that reduce complex issues to overly simplistic slogans.

It is for all these reasons that we elect representatives who form governments. When the system is working well, parties talk across the aisle and find creative compromises that leave no one fully satisfied but no one fully dissatisfied.

It is also worth reading an article in Atlantic Magazine, “How American Politics went Insane.”

Trump, however, didn’t cause the chaos. The chaos caused Trump. What we are seeing is not a temporary spasm of chaos but a chaos syndrome.

Chaos syndrome is a chronic decline in the political system’s capacity for self-organization. It begins with the weakening of the institutions and brokers—political parties, career politicians, and congressional leaders and committees—that have historically held politicians accountable to one another and prevented everyone in the system from pursuing naked self-interest all the time. As these intermediaries’ influence fades, politicians, activists, and voters all become more individualistic and unaccountable. The system atomizes. Chaos becomes the new normal—both in campaigns and in the government itself.

Americans have been busy demonizing and disempowering political professionals and parties, which is like spending decades abusing and attacking your own immune system. Eventually, you will get sick.

Canada can’t become a global leader in an innovation economy by simply following popular opinion. As Canadians respond to calls for submissions for Canada’s Innovation Agenda, we’ll look for greater depth than over-simplified slogans.

Professor Stein concludes:

Pure democracy is highly overrated. It is no accident that systems of pure proportional representation generally produce dysfunctional, sclerotic governments that fit badly with our needs. Winston Churchill put it as only he could: “Democracy is the worst of all systems, except for its alternatives.” In the wake of the vote in his beloved Britain, that wise man might now say: “Any alternative to pure democracy is better.”

For Canada to become “a world leader in turning ideas into solutions, science into technologies, skills into jobs and start-up companies into global successes,” we need our political leaders to lead.

Toward a more innovative economy

I’d like to take more time this summer to collect thoughts on how Canada can create a better environment to encourage more innovation.

At The 2016 Canadian Telecom Summit earlier this month, Namir Anani, CEO of ICTC, hosted a panel called “Strengthening Canada’s Digital Advantage in a Hyper-connected Global Economy” which provided a number of valuable discussion points.

Earlier this week, I wrote about “Powering an innovation economy“. In that post, I said “Real innovation needs government to get out of the way, allowing successful businesses to thrive and letting unsuccessful ones fail.”

That post also cited another earlier piece called “Don’t do stupid stuff,” in which I wrote “Increasingly, it appears that Canada needs a digital conscience in Ottawa.”

Perhaps that conscience can be embodied in the form of a Chief Digital Economy Officer, charged with looking across all departments and agencies, intervening when policies are at cross-purposes with advancement of an innovation agenda. As I suggested yesterday on Twitter, we might want to look at issues through an innovation economy lens, asking “Are we helping or hindering innovation?” Are we encouraging adoption of digital technologies? Are we establishing an overall environment that encourages entrepreneurs to locate in Canada and create jobs in Canada.

Every time we have governments handing out cash to one company as an incentive to create jobs, I wonder if it represents an admission that Canada is not competitive on its own. Should we celebrate companies that have a business model that is dependent on special concessions and hand-outs or should we fix the structural problems that made those hand-outs necessary?

Do handouts demonstrate failed policy? As I have asked before, are we picking winners and creating more losers?

Sure, those ceremonial cheques create a classic political photo-op. What politician doesn’t like handing out other people’s money under the guise of creating jobs? But, think of where these subsidies come from: out of the pockets of companies that are succeeding at being profitable without a hand-out. How does it encourage entrepreneurship to create a system that transfers taxes on profitable firms to companies that aren’t? What behaviour are we rewarding?

In the meantime, we have government agencies at various levels that have imposed “convenience fees” on online transactions, but waive fees for paying in person. What behaviour are we rewarding?

And who could forget my favourite piece of political pandering, the legislation that led to my post “Don’t do stupid stuff,” a legislated ban on charging for paper bills, found at Section 27.2 of the Telecom Act: “Any person who provides telecommunications services shall not charge a subscriber for providing the subscriber with a paper bill.” Read the post I wrote at the time to get a taste for how this was so completely unnecessary. What behaviour are we rewarding?

Can a digital conscience help reward the kinds of behaviour to guide us toward a more innovative economy?


[Update: June 22, 10:45am] The government has launched its “interactive Innovation Agenda website.”

The website, Canada.ca/Innovation, allows Canadians to share their ideas for positioning Canada as a world leader in turning ideas into solutions, science into technologies, skills into jobs and start-up companies into global successes.

#CTS16 on demand

FCC CRTCThanks to CPAC, a number of sessions from The 2016 Canadian Telecom Summit are available for viewing on-demand. As post production is completed, I will add the sessions to the listing below:

The 2017 Canadian Telecom Summit will take place June 5-7, 2017. Mark the dates in your calendar and plan to be there.

Risks for SaskTel

As was widely reported, last month I was asked “to conduct an analysis of the impacts and risks that the MTS acquisition [by BCE] may have for SaskTel.”

The report was released yesterday [link to press release; link to full report].

As SaskTel reported in its press release, the following are the key risks that are outlined in detail in the report:

  • The possibility that reduced numbers of facilities-based carriers in Manitoba could lead Federal government policy makers to create incentives for additional wireless competition to develop through lower costs for new entrant spectrum or other measures. Such measures could reduce the costs for competitors and increase costs or restrict capacity expansion for SaskTel.
  • The further concentration of the market in Manitoba could see removal of the four carriers objective by the Federal government, possibly enabling Shaw to sell its acquired WIND Mobile business or partner with other telecoms. If Shaw launches a competitive mobile service, there is a risk that SaskTel’s consumer communications services will face significant pressure from a second bundled service package in Saskatchewan.
  • There is a risk the establishment of Winnipeg as a western headquarters for Bell could lead to an erosion of SaskTel’s share of the Saskatchewan business market.
  • There is a risk that Rogers will look to replace its lost partnership with MTS by developing retail partnerships with cable companies in Manitoba and Saskatchewan. This would improve the competitive positions of Rogers, as well as local cable companies.
  • For the reasons identified in the report, there is a risk that SaskTel’s net income will be unable to support the level of dividends that have been returned to the province in recent years.

Here is a collection of media coverage:

Powering an innovation economy

I have been traveling in Israel, a country that is frequently called the “Startup Nation.” The book, by Dan Senor and Saul Singer, examines how Israel – a country with about 20% of Canada’s population, in a constant state of war since its founding in 1948, with no natural resources – produces more start-up companies than larger nations like Japan, China, India, Korea, Canada and the UK?

Over the past week or so, I have tweeted somewhat facetiously from some of the better restaurants in Israel about how it is the food that powers the country’s innovation economy.

Last week, the Canadian Government announced its “vision to build Canada as a global centre of innovation“.

To achieve this vision, the Government of Canada will focus on six areas for action:

  • promoting an entrepreneurial and creative society
  • supporting global science excellence
  • building world-leading clusters and partnerships
  • growing companies and accelerating clean growth
  • competing in a digital world
  • improving ease of doing business

According to Minister Bains, “We don’t need another report on what our challenges are. We need fresh ideas and a joint action plan that will make innovation a national priority and put Canada on a firm path to long-term economic growth.”

The government plans to launch an interactive website to allow Canadians “to offer their suggestions on positioning Canada as a global leader in innovation.”

In addition, round-table discussions will take place across the country. They will be hosted by leaders who are innovators in their own right. These leaders represent the private sector, universities and colleges, the not-for-profit sector, social entrepreneurs and businesses owned and operated by Indigenous people. This collaborative approach is essential because the Government cannot act alone. Every sector of society must be mobilized for action. Each sector must also have a stake in determining what the targets to measure progress should be and how those targets should be tracked and reported.

What kinds of government action promotes an innovation economy? What kinds of government actions deter an innovation economy?

Nearly two years ago, I wrote a post called “Don’t do stupid stuff,” in which I wrote “Increasingly, it appears that Canada needs a digital conscience in Ottawa.”

Real innovation needs government to get out of the way, allowing successful businesses to thrive and letting unsuccessful ones fail.

We need to be concerned about governments’ propensity for handing out cash – picking winners and choosing which firms are deserving of state welfare. I wrote about this a few months ago when Sandvine apparently needed a $200,000 per job subsidy in order to continue growing its already profitable development centre in Waterloo. I asked if picking winners might actually create more losers.

Innovation and entrepreneurship are not terms usually associated with government. Knowing (and being willing) to get out of the way, may be the biggest challenge in the development of the government’s action plan.

My travels in Israel indicate that it takes great food to help power an innovation economy. Canada has some of the basic ingredients: Saskatchewan is already a world leader in chick pea production. It is time to harness more of our natural resources to develop a creamier Canadian humous!

Now that’s an idea I would like to see make it into the action plan.

Canada should take a close look at what factors have led to Israel’s successes in innovation and fostering a startup eonomy. We have great opportunities to collaborate and learn.