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Lack Of Graduates With Advanced Degrees May Help To Explain Canada’s Poor Innovation Grade

Ottawa, June 14, 2011 – Canada’s relatively low number of people with advanced qualifications— such as PhDs—could be contributing to our failing grade on innovation, according to The Conference Board of Canada’s latest How Canada Performs analysis.

“The education and skills of the labour force are the underpinnings of innovation. Canada gets excellent results from its education system as a whole. However, Canada’s performance begins to slip as we climb the educational ladder. Indeed, Canada falls to the back of the pack when it comes to advanced knowledge and skills, such as graduates from PhD programs and science and engineering disciplines,” said Michael Bloom, Vice-President, Organizational Effectiveness and Learning. “Our analysis finds a link between a country’s innovation performance and the number of PhDs and science and engineering graduates.”

Canada ranked 14th out of 17 peer countries in overall innovation performance in the Conference Board’s How Canada Performs: Innovation report card (published in 2010). Moreover, Canada has obtained consistent “D” grades in innovation performance since the 1980s. Yet Canada is a consistent top performer overall in the Education and Skills report card, ranking second only to Finland in the most recent release. Canada’s ranking slips, however, as we move from high-school completion (second) to university completion (fifth) to PhD graduates (last of 17).

The Conference Board found a positive relationship between higher PhD graduation rates and a country’s patenting activity. Patents are a commonly used measure of innovation activity, tracking how knowledge is being transformed into invention. Countries that rank high on patents – such as Switzerland, Sweden and Germany – also have high PhD graduation rates. Canada ranked 14th out of 17 countries on patents by population and last on PhD graduates.

There is also a link between PhD graduates and business expenditures on research and development (BERD). Countries with high BERD — such as Finland, Switzerland and Sweden — also rank high on PhD graduates. In addition to having relatively few PhD graduates per year, Canada continues to be a laggard when it comes to BERD, ranking second to last.

The Conference Board’s How Canada Performs analysis is, however, only one small piece of the innovation puzzle. “We know that innovation skills are not just acquired at the highest levels of education. A wide range of skills are needed, including creativity, risk-taking, entrepreneurship, relationship-building, management, and implementation skills,” said Bloom.

“In addition, one of the greatest challenges is connecting post-secondary institutions’ capacity for research to support innovation with the businesses that could most benefit from it. Previous research by the Conference Board has shown how colleges have a beneficial impact on innovation performance by helping to fill this gap.”

Canada’s weak performance in business innovation is one of the reasons why the Conference Board is undertaking the Centre for Business Innovation. This five-year initiative is being established to help bring about major improvements to firm-level innovation in Canada, through research and dialogue. 

How Canada Performs is a multi-year research program at The Conference Board of Canada to help leaders identify relative strengths and weaknesses in Canada’s socio-economic performance. The How Canada Performs website presents data and analysis on Canada’s performance compared to peer countries in six performance categories: Economy, Innovation, Environment, Education and Skills, Health, and Society. This year, the Conference Board is assessing Canada’s performance on 10 Hot Topics.

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