Innovation and Business Strategy: Why Canada Falls Short

Innovation is the manifestation of human potential and creativity. It allows societies to solve problems, and seize new opportunities, and achieve higher standards of living. Innovation is what makes businesses thrive. Canadian businesses, however, seem to lag in innovation behind the United States and other comparable countries. To find out why this is, Industry Canada asked the Council of Canadian Academies to assess the innovation performance of Canadian business.

The Expert Panel on Business Innovation approached innovation as an economic process, rather than a science and engineering activity. The panel provided a long-term perspective on the fundamental factors that connect business strategy, innovation activity and productivity growth. The panel came to two main conclusions: first, that the persistently lagging growth of labour productivity in Canada is primarily due to the weak innovation performance of the business sector; and second, that the weak innovation performance of Canadian business is due to the fact that relatively few Canadian companies adopt innovation-based business strategies.

Assessment question

  • How should the innovation performance of Canadian firms be assessed?
  • How innovative are Canadian firms, and what do we know about their innovation performance at a national, regional and sector level?
  • Why is business demand for innovation inputs (for example, research and development, machinery and equipment, and skilled workers) weaker in Canada than in many other OECD countries?
  • What are the contributing factors, and what is the relative importance of these contributing factors?

Expert Panel membership

The Expert Panel on Business Innovation convened in late 2007 and was chaired Robert Brown, President and Chief Executive Officer of CAE Inc. For a complete list of panel members visit the Expert Panel on Business Innovation page.

Report and supplementary materials

Dialogues on Innovation

From August to December 2009 the Council presented the report’s findings across the country in a series of events known as the Dialogues on Innovation.

For additional information or media inquiries, please contact:

Samantha Rae Ayoub, Communications and Publishing Director, at 613-567-5000 ext. 256 or

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