CANADA’S INNOVATION LAG

 It's clear from recent reports and analyses that Canada is facing significant challenges in innovation and is generally considered to be "falling behind" compared to many other developed nations.

Here's a summary of Canada's situation regarding innovation:

Canada's Current Innovation Standing:

  • Lagging Performance: The Conference Board of Canada's 2024 Innovation Report Card gave Canada a "C" rating, placing it 15th among 20 developed countries. It scored below average on 14 out of 21 innovation indicators.
  • Global Innovation Index (GII): In the Global Innovation Index 2024 (WIPO), Canada ranked 14th among 133 economies. While it performs reasonably well in "innovation inputs" (e.g., human capital and research, market sophistication), it struggles significantly in "innovation outputs" (e.g., knowledge and technology outputs, creative outputs).
  • Productivity Gap: Canada has a growing productivity gap with the U.S., with real GDP per capita declining. This is often linked to a lack of innovation and technology adoption.
  • While reports indicate there's positive movement in Canada's overall R&D spending, the relative "innovation lack" as measured by R&D intensity compared to other advanced economies remains a consistent theme in more recent data, including preliminary figures for 2023 and intentions for 2024.

Canada's economy is characterized by large market oligopolies (e.g., in banking, telecom, grocery), which face less incentive to innovate due to weak competition policies and regulatory burdens that hinder new, disruptive firms.

  • Commercialization Challenge: Despite a highly educated workforce and strong research capabilities, Canada consistently struggles to translate its research and technology into commercialized innovations.

What Canada is Doing (or trying to do):

Canada does have strategies and initiatives aimed at fostering innovation, but their effectiveness is a matter of ongoing debate and concern. Some key efforts include:

-The "Innovation and Skills Plan" which provides major investments in innovative projects to help grow Canada's economy, with recent announcements focusing on sectors like semiconductors, clean technology, and bio-manufacturing.

-Industry Strategy Council: This council provides advice on the impact of economic shifts on industries and informs government understanding of sectoral pressures.

-Mission-Oriented Innovation Policy: There's a growing discussion and some efforts to adopt a "mission-oriented" approach to innovation policy, focusing on grand challenges (like climate change or healthcare) to drive innovation and economic growth.

-Addressing Regulatory Burden: There is recognition of the need to address stagnant regulations that impair innovation and economic growth, with Canada ranking poorly among OECD countries in this regard.

-Intellectual Property Strategy: Efforts are being made to improve IP literacy among Canadian innovators and provide access to affordable IP legal services to help commercialize technologies.

Plus, removing inter-Provincial Trade barriers can certainly help in solving this problem, and although it won't solve all of Canada's innovation challenges (which are complex and multi-faceted, involving access to capital, R&D intensity, and commercialization strategies), they are a crucial piece of the puzzle.

By creating a more integrated, efficient, and competitive domestic market, they provide a stronger foundation for Canadian innovation to thrive and scale within its own borders, either before or alongside expanding internationally. There is a strong consensus among experts that urgent and comprehensive action is needed to transform Canada's innovation ecosystem for global competitiveness.

SP

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Mining News: www.minestockers.com (Disclosure: the writer is a shareholder in minestockers.com)

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