What do you think of when you hear the word "innovation"? Sadly, you might associate it with something that crops up in political speeches now and again as the one thing we need in order to save the economy.

Well guess what? It kind of is the one thing we need in order to save the economy – and we would be remiss to dismiss its importance just because the word gets thrown around a bit too much.

The global economy has a lot of things stacked against it. The aftermath of the recession is still a problem, given that it has left us a legacy of low business confidence and an unwillingness to take risks, to say nothing of cash-strapped governments. Worse, in my opinion, the demographic window is about to close for Canada, and a lot of other countries as well. That does not just mean that populations are aging; it means that the balance of working-age populations are going to shift (from young to old) in a way that spells bad news for economic growth. If nothing changes, the world is going to move decisively toward a slower pace of growth, which will result in a lower standard of living for many countries, including Canada.

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The point of innovation is that when it happens properly, it changes the rules of the game. The dictionary calls innovation "the introduction of something new," and that has pretty much been the story of the past couple of centuries. From the cotton gin to the iPhone, we have had a series of inventions that have changed out reality and, in essence, have caused economic growth to be stronger than it would otherwise have been. Given where things are going, now would be a really good time for another blast of it.

So how do you make innovation happen? There are lots of things to try, from tax credits for research and development through to making it easier to take out patents. Another condition for encouraging innovation is to simply have the right people in place – which is a bit of a challenge. If a country does not have an innovative population – and in practical terms, that often means one with strengths in science and technology – then you cannot conjure one up all that easily.

Or can you?

Writing in the journal Science, economists Keith Makus, Ahmed Mushifq Mobarak and Eric T. Stuen make the case that the U.S. should be attracting foreign students to study at U.S. universities, and encouraging them to stick around to launch entrepreneurial ventures. They believe that doing so could help revitalize innovation and economic growth. Their recommendations draw from their own research, which shows that when it comes to generating publications at U.S. universities, more gets done when there is a mix of students from different countries. As a result, the researchers support the current U.S. Senate bill that would grant green cards to foreign students who get PhDs in science or engineering.

Will putting more science grads in place help innovation? It won't be a quick fix, but it will likely help. In the same vein, Canada's new visa program for budding entrepreneurs (introduced last October) might eventually help on this side of the border.

It may sound contradictory, but speeding up North America's economies is going to take time. Still, the fact that we are talking about innovation – and the best way to make it happen – means that an inevitable decline in growth may not have to be inevitable after all.

Linda Nazareth is a Senior Fellow at the Macdonald-Laurier Institute. Her new book Economorphics: The Trends Changing Today into Tomorrow is now available through Amazon and www.economorphics.com.