A new list of the most innovative companies in the world is notable for what does not appear: a single Canadian firm.
A global ranking, to be published by the Boston Consulting Group Tuesday, shows Apple Inc., Google Inc. and Samsung Electronics Co. Ltd. at the top of its measure of the 50 most innovative companies. American firms dominate the ranking (though their presence is diminishing), with companies in China, Japan, South Korea, Germany and the Netherlands also in the top 50.
Canada used to have one company in the list – BlackBerry Ltd. – but it tumbled out of the rankings in 2010. Since then, no other company has landed on the list.
Canada’s poor innovation record has long been both a puzzle, given its high-quality universities and educated work force, and cause for concern. Explanations range from a reliance on natural resources to risk aversion, a lack of close collaboration between universities and the private sector and weaker investment in new technology.
“Clearly, you need a set of industries that your country is uniquely good at,” – such as Switzerland’s biopharma industry, which has also benefited from tax incentives and specialized training – said Andrew Taylor, partner at Boston Consulting Group and one of the authors of the report.
Natural resources have buoyed Canada’s economy, but mining and energy are also vulnerable to fluctuating market prices. The question is “how to set up ecosystems in which Canada aspires to be world class,” he says, with closer collaboration between universities, companies, governments and venture capital firms around industries such as technology or food manufacturing.
This isn’t the only measure to give Canada poor marks for innovation. The Conference Board of Canada’s last innovation report card awarded Canada a “D” grade, placing it 13th of 16 countries (Switzerland was No. 1). Canada has received that grade every year since 2007. “Despite a decade or so of innovation agendas and prosperity reports, Canada remains near the bottom of its peer group on innovation,” its report last year – which analyzed patents, R&D spending and technology investment – noted.
Canadian executives seem to be putting a lower priority on innovation. The consulting group’s survey shows just 22 per cent rate innovation as their top corporate priority this year, down from 30 per cent last year. A dwindling portion – 65 per cent – are placing innovation in their top three priorities, down from 78 per cent a year earlier, the single largest decline of any country in the study.
A full 85 per cent of respondents rank their innovation skills as average or worse, while just 4 per cent of respondents rank themselves as strong or disruptive innovators. And though most executives plan to spend more on innovation this year, in Canada, spending intentions ebbed to 59 per cent from 60 per cent.
Canada’s poor innovation and productivity performance has generated much scrutiny. In a report to be released Tuesday, a new paper examines why software investment in Canada so dramatically lags that of the United States. The study, by the Centre for the Study of Living Standards, concludes part of the reason stems from lower productivity levels in Canada, industry-specific factors and lower wages for software workers.
Tech and telecom firms dominate the consulting group’s global rankings, but consumer-products companies along with auto makers are also on the list (with Tesla Motors Inc. and Fiat SpA moving up). Three new companies joined the list: electronics maker Hitachi Ltd., software firm SalesForce.com and smartphone maker Xiaomi. Other companies in the top 10 include Amazon.com Inc., Toyota Motor Corp. and Facebook Inc..
Companies in what it calls “rapidly developing economies,” such as China and India, are “particularly aggressive pursuers of innovation.”
The rankings are based on a global survey of 1,500 senior executives along with three financial measures: shareholder returns, revenue growth and margin growth.Report Typo/Error