Canadian businesses feel less pressure to innovate than their global competitors and thus fall behind on this metric, according to a report released this morning by the Conference Board of Canada.
The report is based on results from the World Economic Forum’s Competitiveness Survey 2011-12. The survey ranked Canada 11th out of 142 countries, trailing key competitors such as Japan, the U.S. and Germany.
“Canadian business leaders may be less inclined than their global counterparts to adopt innovation as a business strategy because they do not see it as rational or necessary in their current environment,” said Daniel Munro, principal research associate for the Conference Board.
“Many Canadian business leaders feel that competitive pressures are not strong enough to motivate innovation, capital markets are too weak and the tax burden is too high.”
But Munro cautioned that these perceptions do not always align with reality.
For example, the Conference Board report identified that Canada’s business tax rate is one of the lowest among its main global competitors, despite perceptions to the contrary.
It said that while Canadian business leaders ranked their country’s tax burden in 40th position, Canada’s actual tax rate ranks 29th in the world – ahead of innovation powerhouses such as the U.S., Switzerland, Sweden and Japan.
“Canada has many innovation strengths – including world-class institutions of higher education and research,” Munro said.
“But business leaders report many barriers – some real, some perceived – that may be stalling innovation performance. The challenge is to focus efforts on overcoming real barriers while dispelling the illusions.”
Jenny Wagler
@JennyWagler_BIV