Stagnate or Innovate? That Is the Question

We have an economic recovery of sorts. But economic growth remains weak, too many people are unemployed or in temporary jobs, there is downward pressure on wages, income inequality is high and business investment in productivity-enhancing innovation is inadequate. Could it be that the Golden Age of fast-rising productivity and significant improvements in living standards that we experienced in the last half of the 20th century is over, and that we now face a decade of slow or stagnating growth and consequently big challenges in delivering on the health care, education and social promises made by governments when the economy was doing better?

Discontent is no doubt the reason political parties are focusing on the middle class, although their solutions are less clear. And as young Canadians face tough labour market conditions, including reduced wages and more temporary or contract jobs, while boomers expect their pensions and health care, we risk intergenerational...