The Canadian Innovation Void - Is It Holding back The Economy?

A Nova Scotia Chronicle-Herald article starts off with a thought that is of concern to many of we Canadians in marketing.

THE BIG QUESTION in Canada is, why are businesses performing so poorly as innovators when compared to their American and many other foreign competitors?

They are? Well yes.

In the early 1990s, output per hour of working in the Canadian business sector was close to 85 per cent of the U.S. level.

It is now down to about 75 per cent of the U.S. level, reflecting differences in innovation, which comes from bringing on new products or services or finding better ways to do things.

The article goes on to say that much of the difference in innovation comes down to management. Canadian companies are less enterprising than their counterparts in the U.S. and in many companies in Europe. While the government is often blamed, it is rather that Canadian companies are more focused on cost cutting to improve profitability than on inventing new products and services to grow their businesses.

While cost cutting, American style tends toward restructuring resulting in a leaner, more agile and risk taking environment, in Canada, lean manufacturing is not on the radar for over 1/3^rd of all companies (as compared to only 18% of companies in the U.S. and Europe.)

So why is this? In my opinion, Canadian companies are very reliant on the Natural Resource Sector - the drill it, mine it, chop it mentality. This could be holding them back from innovating. To fully embrace a culture of innovation Canadian companies need to learn from their counterparts to the South and take more chances.

We need to take greater risks in manufacturing, in exporting, in business development. We need to restructure organizations and cut out the fat. While the United States model of wholesale elimination of levels of management may be too drastic for Canadians to consider, European models, particularly those in Germany and Scandinavia may have ideas that can be implemented effectively.

As we struggle with the concepts of lean manufacturing, risk taking and innovation, we fall behind countries who have adapted these concepts to their own particular culture and political environment. As we fall behind we become not only less competitive but also risk continuing to grow our economy.

Finding the right answer is vital to our future because without more innovation, and the higher productivity it brings, we will have a tough time sustaining a prosperous economy and a high quality of life.

Amen.