Transcript: Jim Balsillie: Dragging Canada into the 21st Century | Feb 04, 2019

Steve sits in the studio. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a gray suit, white shirt, and checked blue tie.

A caption on screen reads "Dragging Canada into the 21st Century. @spaikin, @theagenda."

Steve says TO STATE THE OBVIOUS:
TECHNOLOGICAL INNOVATION AT THE
OUTSET OF THIS MILLENNIUM HAS
BEEN NOTHING SHORT OF
REVOLUTIONARY AND IT SHOWS NO
SIGNS OF SLOWING DOWN.
JIM BALSILLIE, THE FORMER CO-CEO
OF RESEARCH IN MOTION SAYS CANADA IS NOT KEEPING UP.
WORSE, THAT POLICYMAKERS AND
BUSINESSES STILL DON'T SEEM
TO FULLY APPRECIATE THE SCOPE
OF THE CHANGE UNDERWAY.
HE IS NOW CHAIR OF THE COUNCIL
OF CANADIAN INNOVATORS AND JIM
BALSILLIE JOINS US WITH MORE.

Jim is in his late fifties, clean-shaven and balding. He's wearing a brown plaid tweed suit and a white shirt.

Steve continues GREAT TO HAVE YOU BACK IN THE STUDIO.

Jim says PLEASURE TO BE WITH YOU
STEVE.

Steve says THIS IS ALWAYS FUN OFF
THE TOP TO REMIND PEOPLE WHAT
THEY SAID THE LAST TIME THEY
WERE HERE BUT YOU WERE IN THAT
CHAIR THREE YEARS AGO AND HERE'S
WHAT YOU HAD TO SAY.
SHOW ME IF YOU WOULD.

A clip plays on screen. In the clip, Jim talks in the studio.

He says CANADA HAS HAD ZERO GROWTH IN
ITS INNOVATION MEASURED BY STATS
CANADA OVER 30 YEARS IN SPITE OF
HUNDREDS OF MILLIONS OF DOLLARS
OF INVESTMENT.
AND ALL OF THESE PROGRAMS ARE
JUST THE SAME THING WE'VE DONE
BEFORE.
I'M ALL FOR GOOD INFRASTRUCTURE.
I'M ALL FOR INCUBATION AND BASIC
RESEARCH.
BUT IT'S NOT GOING TO ADDRESS
THE CORE ISSUE OF WHY WE
ABYSMALLY UNDER PERFORM.
THE PROBLEM IN CANADA IS THAT
WE HAVE A DISCOURSE IN THE
POLICY CIRCLES AND IN THE
BUSINESS ORGANIZATION LEASERS
AND THE POLITICAL CLASS THAT IS
REALLY MIRED IN 30, 40 YEARS
AGO, 20th CENTURY TRADITIONAL
MANUFACTURING ECONOMIES.
SO THEY HAVEN'T UPDATED THEIR
UNDERSTANDING OF HOW AN IDEAS
ECONOMY WORKS.

The clip ends.

Steve says THAT WAS YOUR WARNING
IN 2015.
IN 2017, YOU WROTE IN THE "GLOBE
and MAIL" THAT: CANADA HAS THE
MOST SUPERFICIAL DISCOURSE
AROUND INNOVATION POLICY IN ANY
OF THE 140 COUNTRIES I'VE DONE
BUSINESS IN.
WE'RE NOW IN 2019.
IS THE STORY ANY DIFFERENT?

The caption changes to "Jim Balsillie. Council of Canadian Innovators."
Then, it changes again to "Oh, Canada."

Jim says YEAH, IT'S PRETTY SIMILAR.
I THINK YOU SHOULD JUST PLAY THE
OLD INTERVIEW AGAIN AND IT WOULD
BE GOOD.
I WILL SAY THIS: THAT THERE IS
A SMALL HANDFUL OF CIVIL
SERVANTS LED BY MINISTER BAINS
THAT ARE REALLY, REALLY TRYING
TO UNDERSTAND INNOVATION AND I
GIVE THEM CREDIT FOR THE AD HOC
THINGS THAT THEY ARE DOING AND
THEY'RE WORKING ON.
BUT THERE THEY'RE SUCH A SMALL
MINORITY.
AND THE PROBLEM WITH INNOVATION
IS THAT IS REQUIRING A
DELIBERATE, SYSTEMIC APPROACH.
IT'S KIND OF LIKE SURGERY YOU
CAN'T DO A FEW THINGS RIGHT
AND A FEW THINGS WRONG YOU HAVE
TO DO IT ALL RIGHT.

Steve says TWO YEARS AGO YOU SAID
MICROSOFT OWNS 130 MACHINE
PATERNITIES WHILE ALL OF CANADA
OWNS 48 AND HALF OF THESE ARE
OWNED BY BLACKBERRY.
HAS THAT PICTURE CHANGED?

The caption changes to "Jim Balsillie. Former Research In Motion Co-CEO."

Jim says IT'S GOTTEN WORSE.
THERE'S A PATERNITY GLOBAL
TREATY AND THEY CAME OUT IN THE
LAST TWO YEARS OF THE 150
COUNTRIES IN THE WORLD WE'VE
FADED.
WE HAVEN'T FIGURED OUT THAT IN
THE INTANGIBLE IDEAS ECONOMY
IT'S ABOUT AN ACCUMULATING
INTANGIBLE ASSETS.
THAT'S THE NUMBER ONE JOB IS YOU
HAVE TO ACCUMULATE TANGIBLE
ASSET THAT IS YOU THEN
COMMERCIALIZE.
IF YOU DO THAT RIGHT, YOU
ACQUIRE A LOT OF IP AND DATA
ASSETS.
WE DON'T HAVE A POLICY
ORIENTATION IN THAT BECAUSE OUR
POLICY COMMUNITY DOESN'T
UNDERSTAND HOW INNOVATION
ECONOMY WORKS.

Steve says YOU MENTIONED
INNOVATION.
YOU MENTIONED NAVDEEP BAINS.
HE HAS A TITLE THAT INCLUDES
INNOVATION AND A LOT OF OTHER
STUFF AS WELL BUT HE DID
RECENTLY TALK ABOUT SUPER
CLUSTERS WITH ALMOST 1 BILLION Dollars
OF GOVERNMENT FUNDING
BACKSTOPPING THAT.
DO YOU GIVE THE GOVERNMENT KUDOS
FOR THAT?

Jim says THE MISTAKE IS WE'VE DONE
LOTS OF GRANTING PROGRAMS OVER
THE DECADES BUT THE WAY THEY ARE
APPROACHING THE SUPER CLUSTERS
CURRENTLY... GRANTED THEY ARE
TRYING TO FIX IT ON THE FLY...
IS THAT YOU'RE NOT GOING TO
ACCUMULATE INTANGIBLE ASSETS
JUST BY SPENDING MONEY.
YOU HAVE TO HAVE AN I.T.
STRATEGY, A DATA STRATEGY THAT
Jim says THE OBJECTIVE THAT WE'RE
AIMING AT IS TO ACCUMULATE
VALUABLE INTANGIBLE ASSETS.

Steve says WANT TO DEFINE THAT?
AN INTANGIBLE ASSET IS WHAT?

The caption changes to "It's the intangibles, stupid!"

Jim says IT'S AN IDEA OR DATA THAT YOU
OWN SO IT'S SOMETHING YOU CAN
COLLECT RENT FOR.
IF YOU SAY I OWN THIS SOFTWARE
OR I OWN THIS PATENT AROUND THIS
DATA SET AND I GET MONEY FOR
SOMETHING THAT'S AN IDEA.
AND SO WE DON'T BUILD THOSE IN A
WAY THAT THE OWNERSHIP OF THEM
ACCUMULATE THEM IN A WAY THAT
ACCRUES BENEFIT TO THE MANNY
THEN WHAT WE DO END UP
SUBSIDIZING THE WEALTH FOR
FOREIGN COUNTRIES WITH CANADIAN
TAXPAYER MONEY.
WHICH IS WHAT WE'VE BEEN DOING
FOR THE LAST 30 YEARS.

Steve says LET ME PUT ANOTHER
PROGRAM TO YOU.
YOU'VE HEARD OF THIS ONE, TOO,
THE STRATEGIC INNOVATION FUND,
POOL OF MONEY SET ASIDE BY
OTTAWA IN 2017: TO SPUR
INNOVATION FOR A BETTER CANADA.
SO FAR THEY'VE SPENT MORE THAN
800 MILLION Dollars ON 32 PROJECTS.
WHAT ARE YOUR THOUGHTS ABOUT HOW
WELL THAT'S WORKING?

Jim says WELL, AGAIN, I MEAN, YOU
KNOW, TO MAKE INNOVATION HAPPEN,
IT REQUIRES A VERY SOPHISTICATED
PUBLIC-PRIVATE FRAMEWORK WHERE
YOU ACCUMULATE INTANGIBLE ASSETS
THAT YOU CAN COMMERCIALIZE TO
THE BENEFIT OF OUR ECONOMY.
AND WE DON'T HAVE THAT
FRAMEWORK.
SO I'M SURE THESE ARE VERY GOOD
COMPANIES.
I KNOW SOME OF THEM.
THEY'RE VERY HARD-WORKING.
THEY'RE GOOD PEOPLE.

Steve says WHO GET THE GRANTS,
YOU MEAN.

Jim says YEAH, AND ABSOLUTELY USING
FISCAL RESOURCES IS A VERY
IMPORTANT PART OF AN INNOVATION
STRATEGY.
BUT UNTIL WE UNDERSTAND THE
POLICY COMMUNITY UNDERSTANDS THE
CORE PRINCIPLES WE WILL ALWAYS
ENORMOUSLY SUBOPTIMIZE.
SO HOWEVER THESE THINGS PERFORM,
THEY'LL PERFORM IN SPITE OF THE
ECOSYSTEM, THE POLICY ECOSYSTEM
NOT BECAUSE OF IT.

Steve says I THOUGHT YOU MIGHT
AND LITTLE TOUCH ON THAT ONE
ACTUALLY.
I THOUGHT YOU MIGHT SAY
SOMETHING LIKE THAT WREAKS OF
GOOD OLD-FASHIONED PORK BARREL
INDUSTRIAL REGIONAL POLICY
GRANTS WHICH ACTUALLY ARE ABOUT
PROPPING UP LOSERS AND NOT
NECESSARILY...

Jim says NO, NO, I DON'T WANT TO BE
PEJORATIVE ON THIS.

Steve says OKAY.

Jim says THE GOVERNMENT HAS AN
ENORMOUS ROLE TO PLAY IN THE
INNOVATION ECONOMY.
BECAUSE IT'S BASED ON A
PRINCIPLE OF RESTRICTION THAT I
OWN AN IDEA YOU CAN ONLY OWN AN
IDEA BECAUSE THE GOVERNMENT SAYS YOU CAN.
AND SO THE GOVERNMENT HAS A
CENTRAL ROLE TO PLAY ON THIS.
INCLUDING BUYING PRODUCTS,
INVESTING IN R and D, MANAGING THE
SYSTEM.
VERY, VERY... IN A COORDINATED
FASHION FOR THE COMPANY.
SO YOU ABSOLUTELY HAVE TO INVEST
IN THESE.
BUT YOU HAVE TO INVEST IN THEM
WITH COMPLETENESS.
OUR ISSUE IS NOT WHAT WE INVEST.
OUR ISSUE IS THE INCOMPLETENESS
OF THE APPROACH.
BECAUSE WE NEVER... OUR POLICY
COMMUNITY NEVER UPDATED THE
DIFFERENCE BETWEEN THE TANGIBLE
ECONOMY AND THE INTANGIBLE
ECONOMY.

Steve says HOW ABOUT... AND YOU
PICK THE ACRONYM YOU LIKE...
U.S.-MEXICO TRADE AGREEMENT.
NAFTA 2.
[LAUGHTER]
HOW DID CANADA DO IN TERMS OF
INTELLECTUAL PROPERTY
ARRANGEMENTS IN THAT AGREEMENT?

Jim says WELL, WE DID, FOR PURPOSES OF
THE EFFECTS ON CANADA, IT'S
VERY, VERY DAMAGING TO CANADA.
IN A PERMANENT FASHION.
WHAT... THE WAY THE U.S. WORKS
IS THEY BUBBLE UP THE WORDING
FOR THESE AGREEMENTS IN ALL OF
THEIR PRIVATE SECTOR ADVISORY
COMMITTEES.
AND THEY SAY HERE'S THE WORDS WE
WANT TO MAKE OUR COMPANIES
RICHER.
SO IT MADE THE IP PROVISIONS
LONGER, STRONGER AND BROADER SO
THAT THE RICH GET RICHER.
IF YOU ARE A LANDLORD YOU GET
BIGGER RENT AND WHEN YOU'RE A
TENANT YOU PAY MORE RENT.
AND THEY KIND OF LOCK YOU INTO
THAT IN A PERMANENT POINT OF
VIEW.
SO THE STRUCTURE OF THE
AGREEMENT IS THAT IT WILL BE
VERY HARD FOR CANADA TO REVERSE
ITS COURSE CORRECTION INNOVATION
AND WE'RE GOING TO END YOU
PAYING A LOT MORE CHEQUES TO
AMERICA.
AND AMERICA IS GOING TO COLLECT
MORE CHEQUES BECAUSE AMERICA
WANTS TO... THE INNOVATION
SECTOR IS 7 TRILLION DOLLARS A YEAR AND
THEY WANT TO MAKE IT 14
TRILLION DOLLARS AND THEY ARE GOING TO
PLAY TOUGH TO MAKE THEMSELVES
RICH.

Steve says IF THEIRS IS 7
TRILLION DOLLARS WHAT'S OURS?

Jim says I DON'T KNOW THE EXACT NUMBER
BECAUSE WE DON'T HAVE AN
ORGANIZED FOCUS FOR PULLING THIS
TOGETHER.
AND PART OF MY... THEY HAVE VERY
ORGANIZED LOBBY GROUPS AND
BUSINESS ASSOCIATIONS AND
RESEARCH AND ADVISORY STRUCTURES
THAT BUILD THAT UP.
PART OF CANADA... WE DISBANDED
OUR ADVISORY SYSTEMS 16 OR 17
YEARS AGO BECAUSE WE DIDN'T NEED
ADVICE.
AND THAT'S WHEN THE U.S. REALLY
DOUBLED DOWN ON THEIR ADVISORY
SYSTEMS.
BECAUSE YOU HAVE TO... THE IDEA
OF THE ECONOMY TWEAKS HUNDREDS
OF TIMES A DAY.
THAT'S WHAT LOBBYING IS ABOUT.
THAT'S WHAT GETTING THESE TRADE
AGREEMENTS, REGULATIONS AND
STANDARDS BOTH IN YOUR COUNTRY
AND INTO FOREIGN COUNTRIES.
AND WE DOWN GEARED OUR CAPACITY
IN THAT AFTER THE YEAR 2000 AND
THE U.S. UP GEARED THEIRS AS DID
EUROPE AND CHINA AND JAPAN AND
KOREA.
EVERYONE UP GEARED AND WE DOWN
GEARED OURS WE WENT HANDS OFF
WHEN EVERYONE ELSE WENT HANDS
ON.

Steve says IS IT YOUR HOPE THAT
THIS COUNCIL OF CANADIAN
INNOVATORS WILL GET US UP AND
GEARING?

Jim says THAT IS THE WHOLE OBJECTIVE
IS REALLY TO SPEAK ON BEHALF OF
CANADIAN DOMESTIC INNOVATORS.
WE GOT CAPTURED FUNDAMENTALLY BY
FOREIGN COMPANIES WHO SAID THEIR
WEALTH IS CANADA'S WEALTH.
AND THAT'S JUST NOT HOW
ECONOMICS AND INNOVATION WORKS.
WE HAVE A GROUP THAT'S WORKING
VERY CLOSELY WITH THE POLICY
MAKERS FEDERALLY AND
PROVINCIALLY TO TRY TO
REORIENT THE GOVERNMENT TO
UNDERSTAND THAT IT'S THROUGH
THESE SCALE UPS THAT YOU ARE
GOING TO GET THE PROSPERITY YOU
WANT.
THEIR SUCCESS IS CANADA'S
SUCCESS.
SO WE'RE TRYING TO, YES, REBUILD
THAT.
AND WE'RE HAVING SOME SUCCESS.
AND I MENTIONED WITH SOME SMART
CIVIL SERVANTS AND MINISTER
BAINS.
BUT YOU HAVE TO UNDERSTAND THAT
WE'RE REVERSING DECADES OF
MALADAPTIVE ORTHODOXY.
SO THOSE GOOD PEOPLE WHO ARE
TRYING TO LEARN AND HELP ARE
VERY, VERY MUCH THE MINORITY.

Steve says THIS IS A FEDERAL
ELECTION YEAR IN CANADA.
AND THERE ARE GOING TO BE A LOT
OF PEOPLE PUTTING OUT REPORT
CARDS ON HOW WELL THE GOVERNMENT
IS DOING ON VARIOUS FILES.
WHAT LETTER GRADE WOULD YOU GIVE
THE TRUDEAU GOVERNMENT ON THE
INNOVATION FILE?

Jim says WELL, I CAN'T REALLY GIVE
THEM A GRADE BECAUSE THEY
HAVEN'T DONE INNOVATION.
WHAT THEY REALLY DID WAS FOCUS
ON CHEAP LABOUR, FOREIGN BRANCH
TECH PLANTS.
SO THEY MADE A DECISION THAT
CANADA DOESN'T HAVE THE POE
SECTION TO BE AN INNOVATION
COUNTRY THAT WE'RE REALLY ABOUT
CHEAP LABOUR TO LET FOREIGN
COMPANIES BECOME SUCCESSFUL.
AND I NEVER COULD UNDERSTAND WHY
WE WENT FOR THE BRANCH PLANT
PENNIES INSTEAD OF THE
INNOVATION BILLIONS.
ARE YOU THE ONLY GUY THAT'S EVER
DONE?

Jim says THERE ARE MANY.
WE HAVE GREAT ENTREPRENEURS.
THEY ARE FANTASTIC.
AND WE... THE REASON WE'RE
HAVING TROUBLE IS WE'RE GIVING
AWAY OUR BEST IDEAS AND GIVING
THE BEST TALENT AND ACCESS TO
FOREIGN COUNTRIES SO YOU CANNOT
CONFUSE A TECH BRANCH PLANT FOR
JOBS WITH AN INNOVATION
STRATEGY.
AND YOU HAVE TO UNDERSTAND, I
MEAN THE OFFICIAL GOVERNMENT
POSITION FOR THE AMAZON BID IS
OUR TALENT IS 37 percent CHEAPER THAN
YOURS.
AND WE'RE GOING TO WORK HARD TO
KEEP IT THAT WAY.
WHAT GOVERNMENT SAYS I'M GOING
TO WORK HARD TO KEEP OUR
PEOPLE'S WAGES DOWN AND THEN SAY
WELL, WE HAVE A PRODUCTIVITY
PROBLEM?

Steve says I READ YOUR STUFF IN
THE "GLOBE and MAIL" WHEN YOU DO
YOUR OP-ED PIECES FROM TIME TO
TIME.
AND YOU SAID SOMETHING IN ONE
RECENTLY THAT REALLY WAS VERY...
WELL, PUT IT THIS WAY: IT'S
SORT OF OPPOSITE OF EVERYTHING I
HAD BEEN LED TO BELIEVE UNTIL I
READ THAT WHICH IS THAT
INTELLECTUAL PROPERTY POLICIES
ARE FUNDAMENTALLY DIFFERENT FROM
THE WAY THE REGULAR ECONOMY
WORKS INASMUCH AS ALL THE
TRADITIONAL RULES ABOUT HOW YOU
MAKE MONEY AND GET GOODS AND
SERVICES TO MARKET ARE, IF I CAN
PUT IT THIS WAY "ASS-BACKWARDS."
CAN YOU EXPLAIN THAT?

The caption changes to "Free trade is not where it's at."

Jim says IN THE TANGIBLE PRODUCTION
ECONOMY, WHAT YOU DO IS YOU GET
RID OF, YOU KNOW, TARIFFS.
YOU COMPETE ON COSTS.
YOU GET BIGGER MARKETS AND YOU
GET SCALE AND YOU GET
EFFICIENCIES.
AND EVERYBODY TRADES BASED ON
THEIR COMPARATIVE ADVANTAGE.
SO EVERYBODY'S GOT AN INCENTIVE
TO COOPERATE.
WHEN COME TO THE IDEAS ECONOMY
YOU SAY YOU HAVE AN ECONOMY AND
I CHARGE RENT FOR YOU.
IT'S NOT A TRADING SYSTEM ANY
MORE, IT'S A RENT SYSTEM.
THE LANDLORD WANTS THE HIGHEST
RENTS AND THE TENANT WANTS THE
LOWEST RENTS.
AND SO THE MORE RESTRICTION AND
CONSTRAINTS YOU CAN PUT IN IT TO
YOUR BENEFIT, THE BETTER YOU
WIN.
WHEREAS IN THE FREE TRADE, THE
MORE YOU GET THEM OUT OF THE
WAY, EVERYBODY WINS.
SO IN FREE TRADE, THERE'S AN
INCENTIVE TO COOPERATE.
BUT IN THE IDEAS ECONOMY IT
CREATES RIVALS.
AND SO THERE'S A... YOU HAVE TO
BE MUCH MORE NATIONAL, IF YOU
WILL, ENLIGHTENED NATIONAL IN
YOUR APPROACHES OR YOU GET GAMED
BY THOSE THAT DO IT.
SO IT'S A COMPLETELY... IT'S A
COMPLETELY DIFFERENT SYSTEM THAT
WORKS BY COMPLETELY DIFFERENT
RULES.
AND MY COMMENT BEFORE IS WE
NEVER UPDATED OUR TOOL KIT, OUR
POLICY COMMUNITY OVER THE PAST
30 YEARS WHILE THE REST OF THE
WORLD WAS.
AND THAT'S WHY OUR OUTPUT SHRUNK
WHEN THE REST OF THE WORLD
SOARED.

Steve says TELL ME IF I'M DRAWING
THE WRONG INFERENCE HERE.
IT SOUNDS LIKE YOU'RE SAYING IN
THE OLD ECONOMY, MONOPOLY IS
BAD.
IN THE KIND OF ECONOMY YOU HAVE
JUST DESCRIBED, MONOPOLIES... WE
SHOULDN'T BE FEARFUL OF THEM IN
THE SAME WAY.
IS THAT RIGHT?

Jim says WELL, IN THE IDEAS ECONOMY,
YOU ARE GIVEN A TEMPORARY
MONOPOLY.
THAT IS WHAT THE GOVERNMENT
GRANTS YOU.
NOW, YOU HAVE TO MANAGE THOSE
MONOPOLIES IN MAKING SURE THAT
PEOPLE DON'T MISBEHAVE.
AND THEN... AND SO YOU CAN HAVE
ANTI-COMPETITIVE POSITIONS AND
SITUATIONS AND PEOPLE CAN GAME
THE SYSTEM.
BUT THE DEFINITION OF THE IDEAS
ECONOMY IS GOVERNMENT GRANTED
MONOPOLY THAT IS ARE TEMPORARY.
AND YOU JUST HAVE TO MAKE SURE
THAT PEOPLE DON'T GAME THE
SYSTEM TO MAKE THEM PERMANENT
AND BE ABLE TO SPREAD THEM INTO
NEW AREAS THAT MAKES A PERMANENT
OVERLORD AND A PERMANENT
UNDERCLASS.
AND THAT'S WHY YOU HAVE TO LOOK
AT HOW THEY CHANGE THE RULES AND
THE REGULATIONS AND TRADE
AGREEMENTS AND ALL THESE KINDS
OF THINGS CONSPIRE... IF YOU
DON'T DO THEM RIGHT, THE RICH
JUST GET PERMANENTLY RICHER AND
THE NOT RICH BECOME AN UNDER
CLASS.
AND SO, YEAH, IT'S A COMPLETELY
DIFFERENT SYSTEM THAN THE
PRODUCTION ECONOMY POST WORLD WAR II.

Steve says In WHICH CASE CAN YOU SEE WHY
NOBODY IN OTTAWA SEEMS TO BE
FOLLOWING THIS IN OTTAWA GIVEN
THAT THEY'RE USING A SYSTEM
CREATED 400 YEARS AGO AND
TRADITIONAL SILOED GOVERNMENTAL
BUREAUCRACY AND SO ON?
NO WONDER PEOPLE CAN'T GET THEIR
HEAD AROUND THAT?

Jim says LOOK AT KOREA IN 40 YEARS.
LOOK AT WHAT ISRAEL HAS DONE.
THEY WOULD SAY THEMSELVES THEY
COULDN'T, YOU KNOW, DO ANY R and D
IN THE 70s.
KOREA WAS A BACK WATER.
MANY OF THESE PLACES... THEY'RE
JUST UTTER POWER HOUSES
CERTAINLY ALONG WITH FINLAND AND
SWEDEN AND SO, YOU KNOW WHAT,
LOTS OF PLACES HAD OLD SYSTEMS
OR NO SYSTEMS.
SO, YOU KNOW, WE DON'T HAVE A
GOOD EXCUSE OTHER THAN THE FACT
THAT WE HAVE THIS AVERSION TO
BRINGING IN EXPERTS.
WE HAVE OUTDATED THINKING.
WE'RE CAPTURED BY THESE FOREIGN
LOBBYING COMPANIES.
AND, YOU KNOW, MY STRONG
ADVOCACY IS THAT WE BEGIN, YOU
KNOW, I WANT OUR POLITICIANS TO
REGULATE FOR THE PUBLIC GOOD.

Steve says I WANT TO TURN OUR
ATTENTION NOW... AND IT'S GOING
TO TAKE ME A MOMENT HERE TO SET
THIS UP... BUT THERE IS
SOMETHING GOING ON ON THE WATER
FRONT OF ONTARIO'S CAPITAL CITY
CALLED QUAYSIDE SIDEWALK.
AND YOU HAVE WRITTEN ABOUT THIS.
AND THIS IS A PARCEL OF LAND
THAT IS SUPPOSED TO BE DEVELOPED
AS A, QUOTE-UNQUOTE, "SMART
CITY." BUT HERE'S WHAT YOU'VE
WRITTEN ABOUT IT. YOU SAY...

A quote appears on screen, under the title "Dumb and dangerous." The quote reads "Sidewalk Toronto is not a smart city. It is a colonizing experiment in surveillance capitalism attempting to bulldoze important urban, civic and political issues. Of all the misguided innovation strategies Canada has launched over the past three decades, this purported smart city is not only the dumbest but also the most dangerous."
Quoted from Jim Balsillie, The Globe and Mail. October 5, 2018.

Jim says YES.

Steve says WHY DUMB?

The caption changes to "Who controls the data?"

Jim says WELL, THE REASON IT'S DUMB IS
FIRST OF ALL, YOU... WHEN YOU
DEAL WITH THESE KINDS OF ISSUES,
THEY'RE VERY TECHNICAL.
AND IT REQUIRES EXPERTISE.
AND YOU MUST BE VERY DELIBERATE
AND SYSTEMIC.
SO THE PEOPLE WHO MADE THIS
DECISION HAVE NO EXPERTISE
WHATSOEVER ON THESE IP AND DATA
ISSUES.
IT WOULD BE LIKE ME WALKING INTO
A NEUROSURGERY OPERATING CLINIC
AND SAY CAN I HAVE A TERM.
OR OPERATING THEATRE AND SAY CAN
I HAVE A TURN.

Steve says BUT CITY COUNCIL IS
CITY COUNCIL THEY HAVE TO MAKE
THE DECISION.

Jim says IT WASN'T A DECISION MADE BY
CITY COUNCIL IT WAS MADE BY A
BOARD THAT ISN'T ACCOUNTABLE TO
THAT, WITH NO DEMOCRATIC INPUT
OR EXPERTISE.
AND YOU'RE MIXING A LAND
DEVELOPMENT WITH THE DIGITAL
NERVOUS SYSTEM OF THE SOCIETY.
AND SO... AND BECAUSE DATA
SPREADS SEAMLESSLY, THE POLICY
THERE IS GOING TO SET THE POLICY
FOR ALL OF CANADA.
SO I WE HAVE A ROGUE AGENCY WITH
NO EXPERTISE OPERATING OUTSIDE
OF ITS GOVERNMENT PRESCRIBED
MANDATES.
AND THIS TAIL IS WAGGING THE DOG
OF THE DIGITAL NERVOUS SYSTEM OF
THE WHOLE COUNTRY.
AND YOU HAVE TO UNDERSTAND THAT
THE PERSON WHO CONTROLS THE DATA
CONTROLS THE PEOPLE AND THE
THINGS THAT INTERACT WITH IT.
SO IT UNDERMINES OUR PERSONAL
AUTONOMY.
IT AFFECTS OUR VALUES.
IT AFFECTS OUR SOVEREIGNTY.
IT AFFECTS OUR PROSPERITY AND
OUR SECURITY.
SO, NO, THAT'S THE DANGEROUS
PART OF IT.
SO I TALKED ABOUT THE DOMINANT
BUT THERE'S THE DANGEROUS.
AND I STAND BEHIND THAT ALL THE
WAY.

Steve says THIS IS... I MEAN ONE
OF THE THINGS I READ IN
PREPARATION FOR THIS, 90 percent OF THE
WORLD'S DATA HAS BEEN CREATED IN
THE PAST TWO YEARS.

Jim says YEAH.

Steve says THAT IS ASTONISHING.

Jim says YEAH, YEAH.

Steve says HUH.

Jim says WHAT'S HAPPEN SOMETHING THERE
WILL BE SOMETHING TO THE TUNE OF
I THINK THEY'LL TRIPLE THE
NUMBER OF SENSORS IN THE NEXT
THREE YEARS I THINK THEY'LL SAY
46 BILLION.
SO YOU HAVE THIS ENORMOUS WALL
OF DATA BEING GENERATED AND THEN
WHAT THEY FOUND IS IF YOU CAN
RUN ALGORITHMS ON THAT YOU CAN
PROFILE AND TARGET PEOPLE AND
THINGS.
YOU CAN RUN SYSTEMS.
AND YOU CAN INFLUENCE THEIR
BEHAVIOUR.
YOU CAN TURN THE VALUES OF
ASSETS UP AND DOWN.
SO THE PERSON WHO CONTROLS THE
DATA REALLY CONTROLS YOUR
SOCIETY.

Steve says WOULD IT GIVE YOU
ADDED COMFORT IF IT WERE A
CANADIAN COMPANY COLLECTING THAT DATA?

Jim says NO, NOT PARTICULARLY.
BECAUSE WHAT I'M REALLY SAYING
IS THAT WHEN IT COMES TO CIVIC
DATA, IT'S ABOUT YOUR
RELATIONSHIPS.
IT'S ABOUT YOUR CONSUMPTION
PATTERNS, IT'S ABOUT YOURSELF.
IT'S ABOUT ASSETS.
SO THE MOST IMPORTANT THING IS
THAT YOU HAVE TO HAVE A DIALOGUE
BETWEEN THE GOVERNMENT AND THE
SIT ACCEPTS.
WHAT THEY WANT.
AND WHATEVER SYSTEM YOU HAVE, IT
HAS TO BE VERY, VERY
DEMOCRATICALLY ACCOUNTABLE AND
CONTROLLED AS PUBLIC
INFRASTRUCTURE BECAUSE IT'S THE
WHOLE MARBLES OF... IT'S THE NEW
NERVOUS SYSTEM OF HOW A SOCIETY
OPERATES.
SO WHAT HAPPENED IS THEY SNUCK
IN THE DIGITAL NERVOUS SYSTEM IN
A REAL ESTATE DEVELOPMENT
PROJECT.
AND YOU'VE GOT TO REMEMBER, THIS
WAS DONE BEFORE THE CAMBRIDGE
ANALYTICA AND GOOGLE GOT CAUGHT
TRACKING KIDS WITHOUT THEIR
PERMISSION.
EVERYONE WAS KIND OF DRAWN IN BY
THE HALO OF IT.
AND NOW THAT'S WHAT HAPPENED IS
THE BLOOM HAS GONE OFF THE
FLOWER AND PEOPLE SAY MY
GOODNESS THESE FIRMS ACTUALLY
SHIFT PRIVATE GOOD TO PRIVATE
GAIN.
AND PEOPLE ARE UNCOMFORTABLE
WITH THAT.
THEY WOULD HAVE THE POWER TO
SHAPE ELECTIONS IF THEY CHOSE TO
AND WE'VE SEEN THAT THESE SOCIAL
MEDIA COMPANIES DO THAT FOR
PRIVATE GAIN.

The caption changes to "Beware of surveillance capitalism."

Steve says SIDEWALK LABS IN THEIR
PROMOTIONAL MATERIAL PROMISED
THAT THIS WILL BE...

A quote appears on screen, under the title "Sidewalk Labs promises." The quote reads "A place that's enhanced by digital technology and data, without giving up the privacy and security that everyone deserves."
Quoted from sidewalktoronto.ca

Steve says DO YOU THINK THAT'S ACHIEVABLE?

Jim says WELL, WHAT THEY DO IS THEY
PLAY THE LOOK OVER THERE.
BECAUSE YOU HAVE TO UNDERSTAND
THAT PRIVACY IS A SUBSET OF A
MUCH, MUCH BIGGER SET OF ISSUES.
JUST BECAUSE I NEVER BREACH
PRIVACY DOESN'T MEAN I'M NOT
CONTROLLING YOU FROM MY OWN
PRIVATE GOOD.
AM I OKAY WITH THE ETHICS THAT
YOU ARE DOING?
AM I OKAY WITH... WHO GIVES YOU
THE RIGHT TO COLLECT THAT
INFORMATION ON ME WITHOUT MY
KNOWING IN THE FIRST PLACE?
AM I OKAY WITH YOU TAKING OVER
MY PERSONAL AUTONOMY?
PROFILING MY RELATIONSHIPS?
AFFECTING MY LIFE?
WHO DETERMINES THE ETHICS OF HOW
THE SYSTEM WORKS?
SO, NO, THIS IS NOT ABOUT
PRIVACY.
THIS IS ABOUT CONTROL AND
SOVEREIGNTY.

Steve says HAVE I TALKED TO
PEOPLE IN THAT CHAIR WHO SAY THE
NOTION OF EXPECTATIONS OF
PRIVACY IN THIS KIND OF DIGITAL
UNIVERSE THAT WE LIVE IS A PIPE
DREAM AND WE SHOULD JUST LET IT
GO.
WHAT DO YOU SAY?

Jim says WELL, I THINK THAT'S
DEFEATIST.
AND I THINK IT'S SIGNING UP FOR
TECH DETERMINISM.
AND I THINK THAT'S A MISTAKE.
IF YOU LOOK AT WHAT EUROPE DID
WITH, THEY SET UP A WHOLE LOT OF
REGULATIONS THAT SAID THEY CAN'T
COLLECT INFORMATION ON YOU
WITHOUT YOUR EXPRESS APPROVAL.
YOU CANNOT DEANONYMIZE DATA.
YOU CAN REGULATE THESE THINGS.
THESE COMPANIES OPERATE IN A
SOVEREIGN, LEGISLATIVE
CONSTRUCT.
GUY RIGHT BACK TO WHAT I SAID IN
THE VERY BEGINNING: WE NEED A
GOVERNMENT TO REGULATE AND
GOVERN FOR THE PUBLIC INTEREST.
THERE ARE VERY CLEAR EXAMPLES OF
THAT HAPPENING ALL THROUGHOUT
EUROPE.
BUT THEY HAVE A 10-YEAR
CONVERSATION.
WE HAVEN'T EVEN BEGUN THE
CONVERSATION LET ALONE THE
LEGISLATION.
AND THAT'S MY IMPLORING THAT WE
HAVE TO START PAYING ATTENTION
TO THESE I.P. ASSETS AND DATA
ASSETS NOT ONLY FOR THEIR
ECONOMIC EFFECTS BUT FOR THEIR
NON-ECONOMIC EFFECTS.

Steve says YOU HAVE BEEN BEATING
THIS DRUM FOR A LONG TIME.

Jim says YES, I HAVE.

Steve says ARE THEY LISTENING TO YOU?

Jim says WHAT HAPPENS IS BECAUSE THESE
THINGS HAVE TO BE EXPERT LED AND
DELIBERATE, SYSTEMIC, IT REALLY
DOES MEAN AN ORIENTATION FROM A
LOT OF TRADITIONAL APPROACHES.
AND SO IT IS A BIT OF A SOBERING
TIME.
BUT I AM A BIT DELUGED FOR INPUT
AND PRESENTATIONS AND
ENGAGEMENT.
AND AS ARE THE VARIOUS CEOs AS
ARE THE VARIOUS EXPERT
RESEARCHERS THAT HAVE KIND OF
GARNERED ON THIS.
SO, YOU KNOW, IT IS... THERE IS
A BIT OF AN AWAKENING HAPPENING.
WHICH IS GREAT BUT THAT'S A VERY
SOBERING MOMENT THAT YOU REALIZE
THAT, YOU KNOW, CIGARETTE
MACHINES in THE SCHOOL
CAFETERIA WERE A BAD IDEA.

[LAUGHTER]

Steve says WELL, IN OUR REMAINING
MOMENTS HERE I WANT TO TAKE YOU
BACK TO A SPEECH YOU GAVE LAST
NOVEMBER AT THE IMF AND YOU
CALLED FOR "A HISTORIC GATHERING
OF KEY DECISION MAKERS TO FORGE
A NEW GLOBAL FRAMEWORK FOR
ADDRESSING CURRENT CHALLENGES
CAN DRIVEN BY THE DATA DRIVEN
ECONOMY" WHICH IS A FAIRLY GUTSY
POSITION.
GIVEN THAT WE LIVE IN ANTI
GLOBALIST TIMES ."
IN THE BEST OF ALL WORLDS THAT
YOU SEE IT WHAT WOULD BE THE
BEST POSSIBLE OUTCOME OF SUCH A
GATHERING?

The caption changes to "Extreme turbulence, unless..."

Jim says WELL, I BELIEVE IN
INNOVATION.
I BELIEVE IN CAPITALISM AND I
BELIEVE IN HUMAN POTENTIAL.
SO WHAT'S HAPPENED WITH THE
DIGITAL SYSTEMS IS OUR
INSTITUTIONS ARE ANTIQUATED FOR
HOW THE ECONOMY HAS SHIFTED.
YOU KNOW, 16 percent OF THE STANDARD
AND POORS 500 COMPANIES WAS 70 percent
AND IS NOW 90 percent.
WHAT YOU HAVE TO DO IS
UNDERSTAND THAT THE WAY WE RUN
THESE SYSTEMS THERE IS A LOT OF
INEQUALITY RIGHT NOW.
THERE ARE A LOT OF CYBER
THREATS.
THERE IS A LOT OF GRABBING OF
SOVEREIGNTY AND PERSONAL
AUTONOMY.
AND SO THEN WHAT YOU'RE SEEING
IN ALL OF THIS IS REAL RIVALRIES
BETWEEN BLOCS IN THE WORLD.
AND THEY'RE NOT COMPATIBLE.
AND SO WHAT'S HAPPENING IS WE'RE
COMPROMISING ECONOMIC GROWTH.
IT'S COMPROMISING HUMAN WELFARE.
SO WHAT DO I THINK?
I THINK WE HAVE TO SIT DOWN AND
SAY, YOU KNOW, PLAYING A GAME OF
CHICKEN BETWEEN THE U.S. AND
CHINA AND THEN EUROPE KIND OF IS
TRYING TO STAY OUT OF THE WAY IS
NO WAY TO RUN A GLOBAL SYSTEM.
SYSTEMS THAT COME TO TERMS WITH
THIS NEW REALITY.
AND WE HAVE TO COME TO TERMS
WITH THE NEW RULES.
BUT RIGHT NOW, WE DON'T HAVE
AGREEMENT ON HOW TO... HOW TO
DEAL WITH THESE... THIS DIGITAL
SYSTEM IN THE WORLD.
SO PEOPLE ARE PLAYING GAMES OF
CHICKEN AND RIVALLING AND TAKING
DOWN THE WTO AND BEING OVERLY
AGGRESSIVE.

Steve says WHO DOES THAT MORE,
TRUMP OR CHINA?

Jim says WELL, TRUMP.
WHAT'S HAPPEN SOMETHING CHINA
FILED MORE PATENTS LAST YEAR
THAN THE U.S., EUROPE AND JAPAN
AND KOREA COMBINED.
SO THEY SAID OH, BOY, I KIND OF
LIKE THIS I.P. ROLE OF WTO.
I THINK CAN I OUT PLAY THAT AND
THE U.S. SEES THAT AS AN
ECONOMIC RIVAL.
SO THEY SAY LET'S DISABLE THE
WTO AND THEN THE WORLD...
WHERE'S THE WORLD LEFT?
SO IT SHOWS THAT THESE
INSTITUTIONS ARE OUT OF DATE.
THEY WERE GOOD FOR JUST TAKING
DOWN TARIFFS AND TRADING IN
TANGIBLE PRODUCTION THAT WE ALL
KNOW.
BUT WHEN YOU GO TO IDEAS, WE
DON'T HAVE GLOBAL AGREEMENT ON
HOW TO DEAL WITH DATA AND I.P.
RIGHT NOW.

Steve says I KNOW YOU ARE A FAN
OF Sun Tzu, THE ART OF WAR. IF
YOU WERE CHANNELLING HIM RIGHT
NOW WHAT KIND OF ADVICE WOULD
YOU HAVE GIVEN THE TIMES WHERE IN?

Jim says TO TRUMP?

Steve says SURE.

Jim says WHAT I WOULD SAY TO HIM IS
THAT AMERICA IS 7 TO 8 TRILLION DOLLARS
A YEAR INDUSTRY BASED ON
INTANGIBLES.
IF YOU PLAY A GAME OF CHICKEN
AND ASK CHINA TO BOW I DON'T
THINK THEY CAN AFFORD TO BOW.
THIS IS THEIR SYSTEM.
THIS IS THEIR VIEW.
SO, YOU KNOW, THEY ACTUALLY NEED
GLOBAL ACCORD TO KEEP THEIR
BUSINESSES GOING.
SO IT'S A VERY, VERY DANGEROUS
GAME OF CHICKEN.
I THINK THE BEST PATH FORWARD IS
SOME KIND OF NEW GLOBAL
ARRANGEMENT OR, YOU KNOW,
AMERICA MAY PLAY A GAME OF
CHICKEN THAT THEY'VE GOT THE
MOST TO LOSE BECAUSE THEY'RE
JUST SO STRONG AND POWERFUL IN
THE WORLD.
IF THAT JUST GETS DISABLED, AND
THE THING IS, IF WELFARE AND
GROWTH ARE UNBOUNDED WITH THE
NEW ACCORD, THEY'RE THE ONES
THAT ARE BEST POISED TO PROSPER
IN THE WORLD.
BUT CHINA'S HERE.
IT'S HERE FOREVER.
IT'S NOT GOING AWAY.
AND YOU HAVE TO COME TO
ARRANGEMENTS WITH THEM.
BUT PEOPLE ARE NEVER COMFORTABLE
WITH REORDERING.
I'M NOT MAKING... YOU KNOW,
THAT'S JUST A FACT OF THE
SITUATION.
BUT THAT'S THE CHALLENGE THAT'S
HAPPENING RIGHT NOW IS PEOPLE
ARE... CHINA WANT AS REORDERING
AND PARTS OF AMERICA IS NOT
COMFORTABLE WITH THAT.

Steve says SHALL WE DO THIS AGAIN
IN A FEW YEARS AND SEE IF WE'VE
MADE ANY PROGRESS?

Jim says I WOULD LOVE TO, STEVE.

The caption changes to "Producer: Wodek Szemberg, @wodekszemberg."

Steve says YOU'RE ON.
THAT'S JIM BALSILLIE.
THE COUNCIL OF CANADIAN
INNOVATORS AND THE FORMER CO-CEO
OF RIM. THANKS, JIM.

Jim says A PLEASURE, STEVE.

Watch: Jim Balsillie: Dragging Canada into the 21st Century