Canada's Innovation Deficit

Article published in Policy Options
Prof. Heather Munroe-Blum and Peter MacKinnon, president of the University of Saskatchewan
June 2009 issue

The Science, Technology and Innovation Council’s State of the Nation Report confirms Canada’s underperformance in innovation. Data indicates that our nation suffers from low business R&D, and poor business-university collaboration, and that Canadian universities lack international visibility. But all of these problems are symptomatic of a larger, overarching problem — the need for Canada to grow its talent, promote forward-thinking leadership and develop a coherent and robust vision for innovation.

Canada’s Science, Technology and Innovation System: State of the Nation 2008 is the latest of four publications that document Canada’s preparedness for the knowledge economy of the 21st century. True to our country’s often middling ways, these reports are neither apocalyptic nor enthusiastic about our nation’s positioning, but for a privileged First World country they sound a disquieting note about our prospects for the future.

In 2006 the Council of Canadian Academies observed that despite our strengths in research, we do not do well in converting strength in basic science into commercial success. This deficiency in our innovation system also troubled the Conference Board of Canada, which ranked the country poorly in innovation, and the Competition Policy Review Panel, which urged a competitiveness agenda that requires greater productivity, better innovation and a more entrepreneurial culture. There is a growing consensus among informed observers that Canada is deficient in the culture of competitiveness that stimulates innovation and in turn inspires productivity.

It is in this context that Ottawa’s Science, Technology and Innovation Council (STIC) presented its State of the Nation 2008 report. It presents an overview of Canada’s science, technology and innovation system, charts our progress over time and compares our performance with that of science, technology and innovation leaders around the world. It also suggests areas that must be addressed if we are to raise our sights to levels of achievement that would place us among the globe’s most innovative countries.

First, the overview: Innovation success is essential to our prosperity and quality of life. Canada has capacity and advantages that should position us well for leadership in innovation, but we are falling well short of our potential. The current economic situation should stimulate our ambition for greater innovative success, and the failure to heed this stimulus will compromise our progress and standard of living — perhaps permanently.

Ottawa’s science and technology strategy emphasizes the pursuit of three advantages — entrepreneurial, knowledge and people — and these assist in the identification of key indicators and frame the comparison of Canada with other First World countries. Key indicators of entrepreneurial advantage include business expenditure on research and development (Canada has a low ranking); percentage of total R&D performed by business (low ranking); government support of business R&D (high ranking); business investment in machinery and equipment (middle ranking); venture capital investment (middle ranking); percentage of total sales for innovative products (middle); and collaboration between firms engaged in innovation (low).

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