Tài liệu INNOVATION AND BUSINESS STRATEGY: WHY CANADA FALLS SHORT pptx

Science Advice in the Public Interest

INNOVATION AND BUSINESS STRATEGY:

WHY CANADA FALLS SHORT

The Expert Panel on Business Innovation

INNOVATION AND BUSINESS STRATEGY:

WHY CANADA FALLS SHORT

Report of the Expert Panel on Business Innovation

iv Innovation and Business Strategy

THE COUNCIL OF CANADIAN ACADEMIES

180 Elgin Street, Ottawa, ON Canada K2P 2K3

NOTICE: The project that is the subject of this report was undertaken with the

approval of the Board of Governors of the Council of Canadian Academies. Board

members are drawn from the RSC: the Academies of Arts, Humanities and Sciences

of Canada, the Canadian Academy of Engineering (CAE) and the Canadian

Academy of Health Sciences (CAHS), as well as from the general public. The

members of the expert panel responsible for the report were selected by the

Council for their special competences and with regard for appropriate balance.

This report was prepared for the Government of Canada in response to a request

from the Minister of Industry. Any opinions, fi ndings, conclusions or recom￾mendations expressed in this publication are those of the authors — the Expert

Panel on Business Innovation.

Library and Archives Canada Cataloguing in Publication

Innovation and business strategy [electronic resource]: why Canada falls short /

the Expert Panel on Business Innovation in Canada.

Issued also in French under title: Innovation et stratégies d’entreprise.

Includes bibliographical references.

Electronic monograph in PDF format.

Issued also in print format.

ISBN 978-1-926558-14-1

1. Business enterprises – Technological innovations – Canada.

2. Technological innovations – Economic aspects – Canada.

3. Industrial productivity – Canada.

4. Competition – Canada.

I. Council of Canadian Academies. Expert Panel on Business Innovation in Canada

HD45.I66 2009a 338’.0640971 C2009-902174-9

Disclaimer:

The Internet data and information referenced in this report were correct, to the

best of our knowledge, at the time of publication. Due to the dynamic nature of

the Internet, resources that are free and publicly available may subsequently

require a fee or restrict access, and the location of items may change as menus and

webpages are reorganized.

© 2009 Council of Canadian Academies

Printed in Ottawa, Canada

June 2009

This assessment was made possible with

the support of the Government of Canada.

Innovation and Business Strategy v

The Council of Canadian Academies

SCIENCE ADVICE IN THE PUBLIC INTEREST

The mandate of the Council of Canadian Academies (the Council) is to perform

independent, expert assessments of the science that is relevant to important public

issues. Here “science” is interpreted broadly to encompass any knowledge-generating

discipline, including the natural, social and health sciences, engineering and the

humanities. The Council’s assessments are performed by independent panels of

qualifi ed experts from Canada and abroad.

Operating at arm’s length from government, but with 10-year funding of $30 million

provided in 2005 by the Government of Canada, the Council carries out studies of

subjects proposed by the government, and eventually, by non-governmental and private￾sector organizations. The Council is governed by a 12-member board, a majority of

whom are appointed directly or indirectly by the Council’s three member Academies

– the Canadian Academy of Health Sciences, the Canadian Academy of Engineering

and the RSC: The Academies of Arts, Humanities and Sciences of Canada. A

16-member scientifi c advisory committee, composed of eminent representatives of the

broad science community, advises the Council’s Board with respect to assessment topic

selection, terms of reference, selection of expert panels and report review.

The founding members of the Council are:

RSC: The Academies of Arts, Humanities and Sciences of Canada, is the

senior national body of distinguished Canadian scientists, scholars and artists. The

RSC consists of approximately 1,800 Fellows: men and women from across the country

who are selected by their peers for outstanding contributions to the natural and social

sciences and to the arts and humanities. The RSC is a charitable organization

incorporated by an Act of Parliament in 1883.

The Canadian Academy of Engineering comprises many of the country’s most

accomplished engineers, who have expressed their dedication to the application of

science and engineering principles in the interests of the country and its enterprises.

The Academy is an independent, self-governing and non-profi t organization estab￾lished in 1987 to serve the nation in matters of engineering concern. The approximately

440 Fellows of the Academy represent all disciplines of engineering and are drawn

from industry, government and academe.

The Canadian Academy of Health Sciences encompasses the full breadth of

academic health sciences including all of the medical and allied health sciences, ranging

from fundamental science to social science and population health. The approximately

300 Fellows are recognized for their leadership, creativity, distinctive competencies and

commitment to the advancement of academic health science and for having made

signifi cant lifetime contributions to the health of Canadian society.

www.scienceadvice.ca

vi Innovation and Business Strategy

Publications of the Council of Canadian Academies

The reports listed below are accessible through the Council’s website

(www.scienceadvice.ca):

• The State of Science and Technology in Canada

• Infl uenza and the Role of Personal Protective Respiratory Equipment:

An Assessment of the Evidence

• Small is Different: A Science Perspective on the Regulatory Challenges

of the Nanoscale

• Energy from Gas Hydrates: Assessing the Opportunities and Challenges

for Canada

• Vision for the Canadian Arctic Research Initiative:

Assessing the Opportunities

• Innovation and Business Strategy: Why Canada Falls Short

• The Sustainable Management of Groundwater in Canada

• Better Research for Better Business

The reports listed below are in the process of expert

panel deliberation:

• Assessment on Risk Assessment Techniques in Animal Health

• Assessment on the Integrated Testing of Pesticides

Innovation and Business Strategy vii

Expert Panel on Business Innovation

Robert Brown (Chair), C.M. O.Q., President and Chief Executive Offi cer, CAE

Inc. (Montréal, QC)

Savvas Chamberlain, FCAE, Chairman and Founder, DALSA Corporation

(Waterloo, ON)

Marcel Côté, Founding Partner, SECOR Inc. (Montréal, QC)

Natalie Dakers, Chief Executive Offi cer, Centre for Drug Research and

Development, University of British Columbia (Vancouver, BC)

Meric Gertler, FRSC, Dean, Faculty of Arts and Science; Professor, Department

of Geography and Program Planning; Co-Director, Program on Globalization

and Regional Innovation Systems, University of Toronto (Toronto, ON)

Bronwyn Hall, Professor, Economics of Technology and Innovation, University

of Maastricht (Maastricht, The Netherlands); Professor, Graduate School,

University of California at Berkeley (Berkeley, CA)

André Marcheterre, Former President, Merck Frosst Canada (Lorraine, QC)

Arthur May, O.C., President Emeritus, Memorial University; Chairman of the

Advisory Board, Atlantic Innovation Fund (St. John’s, NL)

Brian McFadden, President and Chief Operating Offi cer, Prestige Telecom Inc.

(Baie d’Urfé, QC)

Walter Mlynaryk, Executive Vice-President, Kruger Inc. (Montréal, QC)

David Pecaut, Senior Partner and Managing Director, The Boston Consulting

Group (Toronto, ON)

Jim Roche, Company Director, Former President and Chief Executive Offi cer,

CMC Microsystems (Ottawa, ON)

Charles Ruigrok, Former Chief Executive Offi cer, Syncrude Canada Ltd.

(Calgary, AB)

Andrew Sharpe, Executive Director, Centre for the Study of Living Standards

(Ottawa, ON)

Jim Stanford, Economist, Canadian Auto Workers (Toronto, ON)

Guthrie Stewart, Former Partner, Equity Fund, Edgestone Capital Partners

(Montréal, QC)

Alexandre Taillefer, Co-Founder, Stingray Digital Group Inc (Montréal, QC)

John Thompson, Chairman, TD Bank Financial Group (Toronto, ON)

viii Innovation and Business Strategy

Acknowledgements

This project was undertaken in response to a request originating from the federal

Minister of Industry asking the Council of Canadian Academies to engage

both the private sector and academic experts to deepen the understanding of

business innovation in Canada.

The study charge led to the appointment of the Expert Panel on Business Innovation.

During the course of its deliberations, the panel sought assistance from many people

and organizations that provided valuable advice and information for consideration.

Special thanks are due to the Centre for the Study of Living Standards (CSLS) and

to Statistics Canada for the assistance and time they have given to the panel requests

throughout its deliberations. The various databases and publications of the OECD

proved invaluable during the course of the panel’s analysis.

The panel sought assistance from several individuals who met with subgroups of

the panel to share their views and experience in respect of the sector case studies.

Others provided input in response to a call for comments via the Council’s

website. These contributions are greatfully acknowledged in Annex IV.

Robert Brown, Chair

Expert Panel on Business Innovation

Project Staff of the Council of Canadian Academies

Program Lead: Peter Nicholson, President

Marie-Noëlle Ip, Program Director

Renata Osika, Program Director

Christina Stachulak, Program Director

With assistance from: Lisa Lambert, Research Associate

Tracey McKinlay, Research Associate

Wendy Shen, Program Assistant

Michelle Dugas, Program Assistant

Joseph Rowsell, Economics Intern

Bruce Kirby, Consultant

Bruce Little, Consultant

Clare Walker, Consultant

Innovation and Business Strategy ix

Report Review

This report was reviewed in draft form by the individuals listed below – a group

of reviewers selected by the Council of Canadian Academies for their diverse

perspectives, areas of expertise and broad representation of academic, business,

policy and non-governmental organizations.

The reviewers assessed the objectivity and quality of the report. Their submissions

– which will remain confi dential – were considered fully by the panel, and most of

their suggestions have been incorporated in the report. The reviewers were not

asked to endorse the conclusions nor did they see the fi nal draft of the report

before its release. Responsibility for the fi nal content of this report rests entirely

with the authoring panel and the Council. We thank the following individuals for

their reviews:

Douglas Barber, O.C., FCAE, Distinguished Professor-in-Residence, Faculty of

Engineering, McMaster University (Hamilton, ON)

Marcel Boyer, Bell Canada Professor of Industrial Economics, CIRANO,

University of Montréal (Montréal, QC)

David Dolphin, O.C., FRSC, Emeritus Professor, Department of Chemistry,

University of British Columbia (Vancouver, BC)

Fred Gault, Visiting Fellow, International Development Research Centre

(Ottawa, ON)

Elhanan Helpman, Director, Graduate Studies, Department of Economics,

Harvard University (Cambridge, MA)

Warren Jestin, Senior Vice President and Chief Economist, Scotiabank

(Toronto, ON)

John Mann, FCAE, Chair, Board of Directors, AUTO21 NCE (Amherstburg, ON)

Roger Martin, Dean, Joseph L. Rotman School of Management, University of

Toronto (Toronto, ON)

Donald McFetridge, Professor, Department of Economics, Carleton University

(Ottawa, ON)

Pierre Mohnen, Department of Quantitative Economics, University of Maastricht

(Maastricht, The Netherlands)

Rein Peterson, Emeritus Professor, Entrepreneurship and Family Enterprise, Ted

Rogers School of Management, Ryerson University (Toronto, ON)

Richard Rémillard, Executive Director, Canada’s Venture Capital & Private

Equity Association (Ottawa, ON)

x Innovation and Business Strategy

Gilles Rhéaume, Vice President, Public Policy, Conference Board of Canada

(Ottawa, ON)

Andrei Sulzenko, Public Policy Consultant (Ottawa, ON)

Val Traversy, Director General (retired), Industry Sector, Competition Bureau,

Industry Canada (Clam Bay, NS)

The report review procedures were monitored on behalf of the Council’s Board of

Governors and Scientifi c Advisory Committee by Dr. Tom Brzustowski.

Professor Brzustowski is the RBC Financial Group Professor in the Commercial￾ization of Innovation, Telfer School of Management, University of Ottawa.

The role of the report review monitor is to ensure that the panel gives full and

fair consideration to the submissions of the report reviewers. The Board relies

on the advice of the monitor in deciding to authorize release of the expert

panel’s report. The Council thanks Dr. Brzustowski for his diligent contribution

as review monitor.

Peter J. Nicholson, President

Council of Canadian Academies

Innovation and Business Strategy xi

PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

CHAPTER 1 Introduction and Charge to the Panel . . . . . . . . . . . . . . . . . . . .13

CHAPTER 2 The Nature and Importance of Innovation . . . . . . . . . . . . . . .21

CHAPTER 3 The Innovation Performance of Canadian Business . . . . . . . . .45

CHAPTER 4 Innovation as a Business Strategy . . . . . . . . . . . . . . . . . . . . . . .81

CHAPTER 5 Structural Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87

CHAPTER 6 The Role of Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . .109

CHAPTER 7 The Climate for New Ventures . . . . . . . . . . . . . . . . . . . . . . . .119

CHAPTER 8 The Infl uence of Public Policy . . . . . . . . . . . . . . . . . . . . . . . .147

CHAPTER 9 Business Ambition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167

CHAPTER 10 Case Studies: Sectoral Perspectives on Innovation . . . . . . . . .177

CHAPTER 11 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .209

ANNEX I The New (Endogenous) Growth Theory . . . . . . . . . . . . . . . . .213

ANNEX II Growth Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217

ANNEX III Analysis of R&D Intensity by Sector . . . . . . . . . . . . . . . . . . . .221

ANNEX IV Individuals and Institutions Consulted . . . . . . . . . . . . . . . . . .233

REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237

Table of Contents

Innovation and Business Strategy 1

Preface

The Expert Panel on Business Innovation fi rst met in November 2007, a time

when the Toronto Stock Exchange index was nudging 14,000, oil was close to

$100 a barrel, the Canadian dollar was above par with the U.S. dollar, economic

growth was solid and the unemployment rate was at a multi-decade low.

But beneath the bullish daily headline data were worrisome longer-term trends,

particularly the poor performance of productivity growth in Canada. Growth of

the hourly output of Canada’s business sector had been falling behind that of the

United States for more than two decades, and the trend had deteriorated

signifi cantly since 2000. Investment in leading-edge technology – particularly

related to computers and communications – was lagging signifi cantly behind not

only that of the United States, but also many of the advanced countries with

which Canada compares itself. Business spending on research and development as

a share of the economy was down 20% from its 2001 peak at the end of the

technology boom.

It was in this context of mixed signals – rosy on the surface but less so underneath –

that the Government of Canada asked the Council of Canadian Academies to

appoint a broad-based panel of experts to assess the innovation performance of

Canadian business. This report records the panel’s analysis and fi ndings. It is a

diagnosis rather than a policy prescription, though it provides a body of fact and

informed opinion that is of policy relevance.

While the panel was completing its work in late 2008 and early 2009, the world

changed dramatically. Because the extent of the global economic crisis is unknown,

its full implications for the panel’s analysis will only become clear with the passage

of time. The panel has therefore not attempted to factor the crisis prominently

into its diagnosis of business innovation in Canada – a longer-term perspective is

needed in any event. The symptoms of lagging innovation by the business sector

in Canada are of very long standing. The panel therefore focused primarily on

long-run phenomena, stretching over decades and across several ups and downs

of the economic cycle.

The panel’s fi ndings therefore remain relevant despite the severe contemporary

shock to the global economy. As governments in Canada continue to take measures

in the near term to mitigate the downturn, a sound diagnosis of the underlying

causes of Canada’s generally weak business innovation performance can help to

target those measures so that they also strengthen the nation’s economy for the

long term.

2 Innovation and Business Strategy

Executive Summary 3

Executive Summary

This report addresses the fundamental factors that infl uence the innovation

behaviour of businesses in Canada. Innovation is of great economic importance

because it is, directly and indirectly, the key driver of labour productivity growth

(increased output per hour worked) and the main source of national prosperity.

The panel has therefore approached innovation as an economic process rather than

as a primarily science and engineering activity. The theme is the link between

business strategy and innovation activity. The focus is on the long run, spanning

several turns of the economic cycle. The fi ndings therefore remain relevant

despite the current shock to the global economy. As requested by the government,

the report is primarily a diagnosis, not a policy prescription, though it provides

a body of facts and informed opinion that is of policy relevance.

INNOVATION DEFINED

Innovation is new or better ways of doing valued things. Innovation is not limited

to products but includes improved processes like the assembly line, and new

business models like web-based commerce. An “invention” is not an innovation

until it has been implemented to a meaningful extent. Radical innovations like

the steam engine and the transistor create entirely new markets. Much more

prevalent is incremental innovation in established markets in which goods and ser￾vices are continuously improved – a process that is responsible for the majority of

labour productivity growth. Although the strategies and policies appropriate for

innovation in new markets are generally quite different from those in established

markets, they are complementary because successful new markets, like the “smart￾phone” market today, eventually become established markets.

INNOVATION AND PRODUCTIVITY

Canada has a serious productivity growth problem. Since 1984, relative labour

productivity in Canada’s business sector has fallen from more than 90% of the U.S.

level to about 76% in 2007. Over the 1985-2006 period, Canada’s average labour

productivity growth ranked 15th out of 18 comparator countries in the OECD.

Long-term analyses by Statistics Canada and the OECD show that Canada’s rela￾tively poor productivity growth is due mainly to weak growth of multifactor productivity

or MFP. (MFP broadly refl ects the effectiveness with which labour and capital are

combined in the economy.) Canada’s productivity weakness is not due to shortcom￾ings in its workforce. Neither, for the most part, does it refl ect inadequate capital

investment, though business investment in information and communications