Starting to rest easy because of the recent bounce in your stock portfolio? Hold on a minute. An expert panel with a long term view says don’t be distracted by boom or bust. Focus instead on the fundamentals of corporate strategy – like business spending on innovation.
In its recent report, Innovation and Business Strategy: Why Canada Falls Short, The Council of Canadian Academies once again highlighted Canada’s productivity disadvantage. It traces the problem to weak multifactor productivity (MFP) – ineffective use of labour and capital in the economy compared to competitors. Put simply, lagging productivity growth is due to shortcomings in the way we invest in new technologies, enhance work methods and implement new forms of business organization.
Why are Canadian businesses – with notable exceptions – innovation followers and not leaders? Five structural and cultural factors are pinpointed:
While there is no innovation deficiency in the DNA of Canadians, the Council warns that the hyper-competitiveness of global markets demands transformation in business strategy. The prescriptions:
It would be silly to ignore the wrenching dislocations caused by recent insolvencies in traditional industries. But, as the Council suggests, there is a fundamental need to address long-standing features of Canadian business practice that impede new and better ways of creating value.