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It’s time to get off our laurels – and innovate, innovate, innovate

With news reports of economic crisis and government bailouts, this opinion piece from the Globe and Mail paints a different picture, one which preaches the virtues of innovation and loosening of restrictive government policy aimed at sparking competitiveness and developing high-value products and services. As with many items from the urban press, it mirrors many of the same arguments the ag-biotech sector has been making for years.


December 24, 2008
By Globe and Mail

Topics

December 24, 2008 

It will be a wasted opportunity if haggling about the size and shape of the Harper government's fiscal stimulus drowns out debate about the international competitiveness of Canadian business. Even before the financial crisis, our economy was showing signs of falling behind on a range of key performance measures. Concerted action to address the underlying causes should remain a priority for political and business leaders alike.

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The competitiveness of Canada's companies, and thus our prosperity, turns on their ability to innovate – to invent, develop and sell high-value products and services. Yet, at every stage of the innovation process, from drawing board to marketplace, Canada underperforms. As the current crisis illustrates, this leaves us vulnerable to external shocks.

When it comes to developing new ideas, Canada issues fewer than half as many patents per capita as the US and Japan. When it comes to commercializing these ideas, only five percent of our firms' sales come from new product innovations, compared with an average of 10 percent among advanced nations. When it comes to taking these products to customers globally, we have lagged behind in high-growth sectors such as electronics and telecommunications. By default, cyclical industries such as metals and chemicals have been required to provide the economy's motive force. Contrast this with countries such as Finland and Israel that have created strong positions in high-growth, knowledge-based sectors such as electronics.

The net result is that Canada's once-strong competitive position has been eroding for more than a decade. Since 1990, Canada's ranking in terms of GDP per capita has dropped from fifth in the world to 10th. Since 1980, Canada's share of global foreign direct investment has slipped from 10 percent to three percent.

Reports this year from the Competition Policy Review Panel, the Ontario Institute for Competitiveness and Prosperity, and the Conference Board of Canada have highlighted a dizzying repertoire of factors that may be contributing to this erosion of national competitiveness. Looking at the problem through the lens of innovation helps bring the priorities into focus. Based on a detailed assessment of some of our top export sectors, we conclude that three conditions are required to spur successful innovation: access to capital; collaboration in pursuit of new ideas; and a culture that promotes entrepreneurialism.

Action in these spheres is not a matter for government alone. Creating the conditions for innovation to flourish will take sustained effort by both public and private sectors. 

To see the remainder of this column, go to: www.theglobeandmail.com/servlet/story/LAC.20081224.COECON24/TPStory/Comment