According to a 2015 study by the Conference Board of Canada (CBC), Canada ranks
9th out of 16 peer nations in innovation. The ranked order
includes Sweden, Denmark, Finland, U.S., Switzerland, Netherlands,
Austria, Norway, Canada, Germany, Japan, Australia, Belgium, U.K,
France and Ireland.
While Canada was given an overall grade of 'C' for
innovation, the study indicate marked regional differences within
the country. For example, the provinces of Ontario, Quebec and
British Columbia earned a 'B'; Alberta earned a
'C', while the remaining six provinces earned a 'D'
or less. In fact, when compared with the 16 peer nations, Ontario
ranked 5th (behind the US, ahead of Australia), Quebec ranked 8th
and B.C. ranked 10th in innovation.
The Conference Board measured 11 Innovation Indicators in order
to gauge a country's innovation, defined as "a process
through which economic or social value is extracted from
knowledge—through the creating, diffusing, and transforming
of ideas—to produce new or improved products, services,
processes, strategies, or capabilities". The
indicators fall into three categories: capacity, activity and
results. Capacity is measured through public R&D, the
number of researchers, connectivity and scientific articles.
Activity is gauged through entrepreneurial ambition, venture
capital investment, business enterprise R& D (BERD) and
information/communication technology investment. Finally, the
results metric is measured through patents, enterprise entry rate
and labour productivity.
While Canada performs highly in entrepreneurial ambition, and
above average in Public R&D, scientific articles and venture
capital investment, it performs poorly in terms of researchers,
BERD and patents.
The innovation indicators related to BERD and patents warrant
closer scrutiny, given the importance of these assets to a
country's economic potential and growth. In addition,
there is a strong relationship between BERD and
patents. Countries that have a higher BERD as a percentage of
GDP have higher patent rates, since BERD generates new ideas and
products that lead to patentable results.
From 1981 to 2000, Canada followed the global trend of
increasing its BERD (measured by spending as percentage of
GDP). However, from 2001 to 2013, Canada's BERD has been
decreasing, in contrast to the global trend. This is
reflected by Canada's performance in the patents metric,
measured as the number of patents filed under the PCT per million
population. After peaking in 2006, the Canada dropped in the
patents metric due to the recession, and has only started to
recover slowly in 2011. Canada ranks 15th overall,
ahead only of Australia, in the CBC's ranking, earning a grade
of 'D'. Regionally, Ontario, Quebec, Alberta and BC
are near the Canadian average.
While increasing the BERD would lead to an increase in patents,
further analysis indicates that Canada is substantially weaker than
other jurisdictions at converting R&D spending into
patents. According to the Conference Board, "too few
firms have the management expertise needed to select promising
research and innovation projects, make good decisions about
resource allocation, attract funding, and shepherd projects from
idea to innovation and, ultimately, commercialization".
In addition, more firms need to increase their expertise on
the patenting process, make use of patent landscape tools and
freedom-to-operate searches, in order to use IP in a smart,
efficient way to protect their business interests.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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