Intelligence

Canada leads OECD ranking of companies that say they’re innovating

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We’re number one: Canada leads a new ranking from the OECD measuring which countries have the most companies that say they’re innovating. 

79.29 per cent: The number of Canadian firms that reported one or more innovations between 2014–2016. Second-place Switzerland clocked in at 72.33 per cent.

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Innovation talk ≠ innovation action: The OECD report, which is based on data collected by national statistical offices from about 40 countries, highlights that self-reporting on innovation may not represent actual economic benefit. “Much reported innovation does not require firms to perform R&D themselves or ultimately leads to requests for formal intellectual property protection,” reads the report. 

No R&D? No problem: While Canada is third in public support for innovation, it is without peer when it comes to giving government money to companies that aren’t doing research and development. Canada gives 15.44 per cent public support to non-R&D performers; no other country is in the double digits. The U.S. spends just 1.04 per cent. 

Business expenditure dropping: Canadian business spending on R&D, a measure of where companies spend money as opposed to where they say they are spending, tells a very different story. It’s been dropping for about two decades, while the OECD average goes in the opposite direction. This handy chart flagged by Daniel Munro, senior fellow of innovation policy at the University of Toronto’s Munk School, nicely illustrates those problems. 

Canada lags otherwise: In 2018, The Logic reported on an internal government document warning that Canada’s tech sector was falling behind the rest of the world. That report highlighted two very different OECD statistics: the fact that Canada’s tech sector was ranked 20th by the OECD for both GDP growth rate and size of the sector as a share of GDP.

More data to come: The OECD is planning to release more data looking at innovation across countries in the coming months, with a particular focus on advanced-technology use in firms.

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