The Conference Board says Canada has been spinning its wheels in the critical area of business innovation despite a decade of trying.
The Ottawa-based think-tank says its latest comparison of 16 advanced economies puts Canada in 13th place on innovation, a key element of a modern, competitive economy.
The report, being released Thursday morning, says Canada ranks second to last in two important aspects of the overall innovation record, the amount businesses spend on research and development and in venture capital expenditures.
Ironically, the research shows Canada does well in the quality of its scientific research and the creation of new businesses.
“But these signs of promise are not being turned into commercially viable products and services, and successful, globally-competitive companies are not emerging from our creative ideas,” says Daniel Muzyka, the think-tank’s chief executive.
The Conference Board notes that the federal government has placed great emphasis in improving Canada’s innovation performance for years, most directly in the 2012 budget’s revamping of how $3.5 billion is doled out to firms under the Scientific Research and Experimental Development program. Last month’s budget also set aside about $200 million for venture firms.
Muzyka gives some credit to government, but says the problem has not been resolved.
For instance, business spending on research and development has actually dropped to 0.89 per cent of gross domestic product in 2011 from 1.29 per cent 10 years earlier. By comparison, U.S. firms spend twice as much comparatively, and Finnish firms three times.
Governments do better on R&D spending, ranking eighth in the 16-nation comparison.
“We have now reached a point where we are seriously impacting the wealth and opportunities for following generations,” Muzyka says.
The report is part of the Conference Board’s How Canada Performs series, which are released separately. In March, the think-tank found that Canada was sixth among the nations for economic performance.
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