Quoted in the September 5, 2012 Globe & Mail, Thierry Geiger an economist with the forum said that “innovation is the one place that Canada could do better” and that Canada has long fallen short in comparisons of innovation and productivity. The report shows Canada in 22th place in terms of innovation. It is rated 26th in terms of what is called business sophistication. This is based on a survey of 198 Canadian executives regarding their perceptions of how sophisticated processes such as distribution and marketing generally are.
Coverage of the World Economic Forum’s findings in the Huffington Post says that Canada benefits from efficient markets but its performance is being dragged down by the perceived "quality of its research institutions and the government's role in promoting innovation." The Conference Board which assisted the forum in collecting the data noted that the country is not "taking full advantage of our strong economic fundamentals."
While we should be concerned about the competitive ranking overall, what is especially surprising is the ranking in comparison with our biggest trading partner. The US holds 7th place, compared to Canada’s 14th place. Switzerland garnered the number one spot.
The report says that Canada’s results are being dragged down by lower enrollment rates in universities and a decline in the extent to which workers are being trained. Previous reports have said that improving business sophistication and innovation in the private sector and producing goods and services higher on the value chain would improve the score.
Numerous other reports have suggested that Canada does not measure up when it comes to innovation and competitiveness. A report by the global accounting and consulting firm Deloitte is reviewed in the October 1st Financial Post under the heading “Are ‘fat and happy’ Canadians too chicken to invest in growth and innovation?”. The article suggests that Canada’s inability to improve productivity is connected to the country’s history of and culture of modesty, compromise, and most importantly risk aversion.