Asleep at the Switch

Asleep at the Switch: The Political Economy of Federal Research and Development Policy since 1960

Copyright Date: 2014
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    Asleep at the Switch
    Book Description:

    Since 1960, Canadian industry has lagged behind other advanced capitalist economies in its level of commitment to research and development. Asleep at the Switch explains the reasons for this underperformance, despite a series of federal measures to spur technological innovation in Canada. Bruce Smardon argues that the underlying issue in Canada's longstanding failure to innovate is structural, and can be traced to the rapid diffusion of American Fordist practices into the manufacturing sector of the early twentieth century. Under the influence of Fordism, Canadian industry came to depend heavily on outside sources of new technology, particularly from the United States. Though this initially brought in substantial foreign capital and led to rapid economic development, the resulting branch-plant industrial structure led to the prioritization of business interests over transformative and innovative industrial strategies. This situation was exacerbated in the early 1960s by the Glassco framework, which assumed that the best way for the federal state to foster domestic technological capacity was to fund private sector research and collaborative strategies with private capital. Remarkably, and with few results, federal programs and measures continued to emphasize a market-oriented approach. Asleep at the Switch details the ongoing attempts by the federal government to increase the level of innovation in Canadian industry, but shows why these efforts have failed to alter the pattern of technological dependency.

    eISBN: 978-0-7735-9653-5
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Tables and Figure
    (pp. ix-x)
  4. Abbreviations
    (pp. xi-xii)
  5. Acknowledgments
    (pp. xiii-2)
  6. INTRODUCTION: The Canadian Federal State and Domestic Technological Development
    (pp. 3-28)

    For two and a half decades after the Second World War, new domestic and international structures were developed that underlay a “Golden Age” of capital accumulation in the leading capitalist nations. Central to these new structures of accumulation was the creation of a variety of technological capacities. Under the impact of productivity missions sent from various countries to observe American industrial practices, the defeat of domestic opposition by workers to the introduction of more intensive Taylorist approaches to production, and a range of demand-and-supply conditions that supported mass-production industries, the Fordist technological practices developed earlier in the twentieth century by...

  7. 1 Promoting Domestic Technological Capacities: State Strategies and Social Antagonisms
    (pp. 29-48)

    In the introduction, I discussed the growing emphasis placed on domestic technological capacities within the advanced capitalist world in the postwar “Golden Age,” and how that trend gathered momentum with the advent of neoliberal restructuring, particularly in the 1980s and 1990s. Reflecting a growing awareness of the relationship between domestic technological capacities and export performance in competitive processes, an extensive literature developed that placed domestic technological capacities at the centre of economic growth and development.¹ With the growing popularity of national systems of innovation (nsi) theory over the 1990s, this literature rapidly increased. Fagerberg and Sapprasert observe that, “in the...

    • 2 Entrenching Dependent Technological Development: Canadian Fordism in the Early Twentieth Century
      (pp. 51-76)

      In this part of the book, I examine the long history of dependent technological development in Canada. In this chapter, I discuss its beginnings in the rapid process of Fordist industrialization in Canadian manufacturing in the early twentieth century. The ability of Canadian industry to incorporate the practices of American Fordism and expand on the basis of extensive technological borrowing established a pattern that has continued to this day. This was not foreordained. The reliance on technological borrowing had to be reconstructed in successive periods and was the product of the specific strategies followed by Canadian manufacturing capital as it...

    • 3 Reasserting Dependent Technological Development: Canadian Fordism in the Postwar “Golden Age”
      (pp. 77-98)

      Within the Canadian political economy literature, following a tendency well established in international approaches, particularly the French regulation school, Canadian Fordism is discussed as a post–Second World War development.¹ However, as I argued in the last chapter, this view neglects the earlier intensive movement to Fordism in Canada after 1900 that not only moved the Canadian economy up the hierarchy of advanced economies in terms of per capita income and productivity levels, but also distinguished Canadian patterns of growth from those in other advanced economies outside the United States. Among these latter economies, the Canadian economy stood alone in...

    • 4 Another Form of Dependent Technological Development: Post-Fordist Accumulation in the Neoliberal Era
      (pp. 99-132)

      As the Canadian political economy moved into the 1970s and, along with other advanced capitalist economies, shifted away from the Fordist Golden Age, its pattern of dependent technological development remained in place and was reinforced by the new strategies of accumulation pursued by Canadian manufacturing capital. The initial trends established with the Auto Pact were amplified in the era of post-Fordist neoliberal restructuring that encompassed the period leading up to and after the 1987 Canada–United States Free Trade Agreement (cufta). The movement toward continental rationalization accelerated, and Canadian manufacturers abandoned their historic focus on the Canadian domestic market along...

    • 5 Beginning the Process: The Diefenbaker Tories and R&D Incentive Programs, 1957–63
      (pp. 135-155)

      Surprisingly, within both the policy analysis literature concerned with Canadian r&d and innovation and the political economy literature concerned with explaining Canadian development, the long history of federal promotion of r&d and innovation in the Canadian economy has not been discussed in any detail. There are studies of particular programs and departments and overviews of specific periods of policy, but there has been no detailed treatment of the long-term systematic attempt by the federal state to boost the manufacturing sector of the Canadian economy by increasing the innovative capacities of Canadian industry. The development of Canada’s “national system of innovation”...

    • 6 Internal Struggles: Left-Liberals, the Glassco Framework, and R&D Policy, 1963–68
      (pp. 156-189)

      After the defeat of the Conservatives in the election of 1963, the Liberals were once again the ruling party. A key reason for the Liberal resurgence at the federal level was that the party was seen within business circles as a means of removing the Diefenbaker government from office.¹ During its period out of office, the Liberal party had reconstructed its relations with business and introduced a new generation of members with close connections to capital. Two key people in this respect were Charles (Bud) Drury, who was elected to office in the 1962 election campaign, and Mitchell Sharp, who...

    • 7 Further Contestation: The Gray Initiative, 1968–71
      (pp. 190-214)

      After the 1968 federal election campaign, the Liberal party was in office with the first majority government since the time of Louis St-Laurent. The nature and composition of the Cabinet had changed dramatically from the situation that existed in the second Pearson government. At the head of the government was Pierre Trudeau. Trudeau was not a long-time Liberal, having joined the party to run in the 1965 election campaign. Although he had moved considerably away from the social-democratic views expressed in his writings from the 1940s and 1950s, and he was not a committed nationalist in terms of economic policy,...

    • 8 Limiting Change: Industrial Restructuring and Social Forces, 1971–73
      (pp. 215-232)

      The surprising level of support shown in the Cabinet meetings of 1971 for a mechanism to screen foreign direct investment reflected the changed context concerning the role of American capital in the Canadian social formation that existed both in the federal state and in wider Canadian civil society in the early 1970s. Not only was there a much stronger core of ministers in the Trudeau government who were in favour of engaging in activist measures, but there were important changes in the level of public support for regulating foreign investment. A crucial area of change related to increasing levels of...

    • 9 Extending the Glassco Framework: R&D Policy in the 1970s
      (pp. 233-261)

      As discussed in chapter 7 in relation to Treasury Board and the Working Group on Research, Development and Innovation, the late 1960s and early 1970s were characterized by heightened interest in applying planning procedures to the organization of federal activities. Coming out of the recommendations of the Glassco Commission, there was a major focus on how to gain “value for money” by substituting rational analysis and planning for the incremental approaches to decision-making that were dominant throughout the federal bureaucracy.¹ Instead of simply adding resources to existing programs on an annual basis, the Trudeau planners wanted to establish a new...

    • 10 Last Challenge to Transnational Capital: Left-Liberals and State-Led Strategies, 1980–81
      (pp. 262-295)

      In the previous chapter, we saw that the Trudeau Liberals moved to a position closer to that of private capital in the latter part of the 1970s. This movement, however, did not mean that they had given up on creating an economy with greater domestic technological capabilities. More resources were spent by the Trudeau Liberals on promoting domestic r&d and innovation in this period, but in ways that did not challenge dependent technological development. This trend continued when the Liberals were returned to office in February 1980, having defeated the Clark Conservatives after their brief period in office between May...

    • 11 Moving to the Right: The Trudeau Liberals and R&D Incentive Programs, 1981–84
      (pp. 296-307)

      As discussed in the previous chapter, there was substantial anger in business circles, particularly in the oil and gas sector, in relation to the National Energy Program (nep). Although business groups such as the Business Council on National Issues were relieved that, with the defeat of Gray’s proposals in Cabinet, there would be no further “nep-ing” of economic sectors, relations between the Trudeau Liberals and business had still deteriorated significantly by the end of 1981. The problems faced by the Trudeau Liberals were only increased by a deterioration in economic conditions: instead of resource-led economic growth, there was a major...

    • 12 The Glassco Framework in an Era of Free Trade: The Mulroney Tories and R&D Policy, 1984–93
      (pp. 308-332)

      The coming into office of the Mulroney Tories in 1984 did not change the priority attached by the federal state to promoting industrial r&d. Before the 1984 election campaign, the Conservative party had promised to substantially raise federal support in this area to 2.5% of gross national product (gnp).¹ The claim by Brian Mulroney, the leader of the Conservative party, that r&d spending needed to be raised a full percentage point from the 1982 level of 1.13% of gnp flowed out of a concern that low spending on industrial r&d was a key source of competitive weakness.² It is this...

    • 13 Final Episode: The Chrétien Liberals, Transformative Strategies, and the Glassco Framework, 1993–2000
      (pp. 333-358)

      In the same manner as previous governments, both Liberal and Conservative, the Chrétien Liberals stressed the need to increase industrial r&d in their Red Book proposals in the lead-up to the 1993 election campaign. The Liberals argued for “a national system of innovation” in which there would be a greater commitment to an innovative economy through the development of greater domestic technological capabilities – particularly in small and medium-sized business.¹ The need to increase the level of innovation in Canadian industry was also an important theme in Finance Minister Paul Martin’s first budget, and Industry Minister John Manley was given...

  10. CONCLUSION: The Impasse of the Federal State and Canadian Industrial R&D
    (pp. 359-390)

    In the previous chapter, it was shown that the Chrétien Liberals maintained a long tradition in federal r&d policy and continued to follow the market-based precepts of the Glassco model. Indeed, by the end of the 1990s, the commitment of the federal state to this line of policy was stronger than ever before, as it was now buttressed by new neoliberal regimes for the regulation of international trade and investment. As also noted at the end of the previous chapter, internal debates concerning how to alter the technological capacities of Canadian industry no longer had any significant weight as the...

  11. Notes
    (pp. 391-478)
  12. Index
    (pp. 479-490)