ARCHIVE: VP CORNER
 | Sharpening Canada’s Competitive Edge: We Need to Be More Innovative Michael Bloom
Vice-President, Organizational Effectiveness and Learning November 10, 2011 | Canada’s global competitiveness ranking dropped to 12th in the World Economic Forum’s Global Competitiveness Report 2011–2012, continuing a pattern of decline from 9th place in 2009 and 10th place in 2010. We should not be satisfied with 12th place, especially since our competitors continue to race forward with performance gains on key competitiveness metrics while we tread water.  These results remind us to look beyond the daily headlines, with their focus on the global economy’s volatility and worries about consumer confidence, and probe deeper into the fundamentals—the underpinnings of our economic growth, development, and competitive mettle.
It is also helpful to look at who is beating us and why. The top four countries—Switzerland, Singapore, Sweden, and Finland—are small, developed economies with knowledge-intensive industries and a track record of innovation. Also ranked above us are four G-8 economies—the United States, Germany, Japan, and the United Kingdom—with high-tech industrial bases and leading-edge innovation performance. Weakness in firm-level innovation impedes our competitiveness, a trend that will continue if improvements are not made. The World Economic Forum ranks Canada a disappointing 71st among 142 nations when it comes to the nature of our competitive advantage. Business is not taking advantage of our people’s skills and knowledge to develop value-added products, services, and markets. Other factors that underlie our lower ranking are the inhibiting burden of government regulations and weaknesses in our macroeconomic environment, including high levels of government deficit and debt. Weakness in firm-level innovation impedes our competitiveness, a trend that will continue if improvements are not made. The World Economic Forum concludes its analysis of Canada with a directive: “[I]mproving the sophistication and innovative potential of Canada’s private sector, with greater R&D spending, and producing goods and services higher on the value chain, would enhance Canada’s competitiveness and productive potential going into the future.” Much can be done to improve Canada’s productivity, economic performance, and global competitiveness. Ongoing support and investments in our infrastructure and institutions are needed, and government must continue to address the country’s macroeconomic weaknesses. Canadian businesses also have an important role to play. The good news is that we have strengths to build on. Canada’s superior health and education systems, strong labour markets, well-capitalized financial markets and institutions, and status as a preferred destination for highly skilled, well-educated immigrants give us a solid foundation for developing a more competitive economy. Yet, progress on competitiveness will not come from doing more of the same. Perhaps the most important way forward is to rectify our dismal performance on innovation. We continue to underperform most of our major competitors—as we have done for several decades—despite substantial government investment in R&D and a strong research performance by our universities. The key is to improve firm-level innovation. The Conference Board has established a new Centre for Business Innovation (CBI) to help strengthen business innovation in Canada. The CBI will focus on five areas: - firm-level strategies and practices
- capital markets
- people
- public policy
- performance measurement and macro analysis.
Related Publications
How Canada Performs: A Report Card on Canada
Canada’s Lagging Productivity: The Case of a Well-Educated Workforce Lacking the Much-Needed Physical Capital Related Network
Centre for Business Innovation
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