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Ideas and Knowledge

Introduction

This reference document is intended to provide supplementary information relating to "ideas and knowledge," one of the four key inputs to business innovation discussed in Section 2 of the panel's Consultation Paper. The other three inputs to business innovation are: (1) talented, educated, and entrepreneurial people; (2) networks, collaborations, and linkages; and (3) capital and financing. Federal support for business R&D takes the form of specific initiatives that help businesses develop or access each input. As such, understanding the larger Canadian context for each input is essential to examining the role and effectiveness of the initiatives at the core of this review.

Supplementary Information

The following facts build on topics covered in the portion of the panel's discussion paper pertaining to ideas and knowledge:

  • In relative terms, overall investment in R&D (public and private) in Canada is below the OECD average. The below graph depicts gross expenditures on R&D (GERD) as a percentage of GDP in OECD countries.

    Source: OECD, Main Science and Technology Indicators (Vol. 2010/1). The reference year is 2008.
  • Canada's business sector performs a smaller proportion of GERD than that of roughly two-thirds of other OECD economies. The below graph depicts the percentage of GERD performed by the business sectors of OECD countries.

    Source: OECD, Main Science and Technology Indicators (Vol. 2010/1). The reference year is 2008.
  • Canada's higher education sector performs a higher proportion of GERD than that of the majority of other OECD economies. The below graph depicts the percentage of GERD performed by the higher education sectors of OECD countries.

    Source: OECD, Main Science and Technology Indicators (Vol. 2010/1). The reference year is 2008.
  • Canada's government sector is around the OECD average for the proportion of GERD that it performs. The below graph depicts the percentage of GERD performed by the government sectors of OECD countries.

    Source: OECD, Main Science and Technology Indicators (Vol. 2010/1). The reference year is 2008.
  • Provincial BERD intensities (business expenditures on R&D as a percentage of provincial GDP) vary across Canada.

    Source: Statistics Canada (2009), Gross Domestic Expenditures on Research and Development in Canada (GERD), and the Provinces (Catalogue no. 88-221-X). The reference year is 2007 (preliminary data).
  • The research intensity of R&D-performing firms in Canada (i.e., research expenditures expressed as a percentage of total company revenues) increases as the revenue size of the R&D-performing firms decreases.

    Source: Statistics Canada (2010), Industrial Research and Development: Intentions 2009 (Catalogue no. 88-202-X). The reference year is 2007 (preliminary data).
  • A 2009 OECD report indicated that Canada's manufacturing sector led a comparison group of 16 countries in terms of the incidence of innovation. The graph below depicts the amount of firms (expressed as a percentage of all firms) having introduced a product or process innovation for the 2002-2004 period.

    Source: OECD (2009), Innovation in Firms: A Microeconomic Perspective. The reference periods for New Zealand, Japan, and Switzerland are 2004-05, 1999-2001, and 2003-05, respectively.
  • The same 2009 OECD report indicated that Canada's manufacturing sector lags behind many other comparator countries for the value derived from product innovations. The graph below depicts the share of turnover stemming from product innovations (as a percentage of total turnover for all firms) for the 2002-2004 period.

    Source: OECD (2009), Innovation in Firms: A Microeconomic Perspective. The reference periods for Australia and Japan are 2004-05 and 1999-2001, respectively.