We’re falling behind.

Canada’s place in the Global

Innovation Economy.

Dan Herman

Executive Director

DEEP Centre Inc.

The DEEP Centre: an entrepreneurial think tank

The DEEP Centre’s research informs action on the two following axis: 1) Understanding the changing nature of

entrepreneurship and innovation-enabled growth in the global economy

2) Assessing how governments and firms can adapt and foster innovation, economic growth and employment

Three key questions:

• How to do you build competitive companies?

• What are the investments in technology, capital and people that enable that success?

• How do different levels of government facilitate that success?

Our work – 250 interviews + a year with executives

WIPO Global Innovation Index 2015:

• 16th down from 8th in 2011

World Economic Forum Global Competitiveness Report 2015:

• 13th down from 10th in 2011

• 26th in business innovation

OECD Productivity Report 2015:

• Growth in Canada’s labour productivity over period 1995-2013 28th

out of 35

Conference Board Innovation Report Card:

• 13th of 17 countries, “D” grade

Canada’s Relative Performance

SMEs who export ?

Less than 10% of SMEs export.

In Germany >40%.

BERD spending?

Of 30 OECD countries, the share BERD

undertaken by large Canadian companies is the

8th lowest.

Partnerships?

Less than 20% of firms have worked with a

college or university.

Training & Development

Employers spend on T&D has declined by about

40 per cent, from a peak of $1,207 per

employee in 1993 to $705 in 2013 (U.S.

employer spending significantly higher $1,071

per employee)

Canadian Firms – leaders or laggards?

Canada’s R & D Performance – Inputs

Canada’s R & D Performance – Largest Companies

Canada’s Firm Performance – Outputs

• New entrants in the billion-dollar category were predominantly in the energy sector, with a net addition of 17 energy companies since 2003.

• The consumer retail and wholesale sectors added 7 new entrants to the billion-dollar category.

• The engineering and construction sectors added 4 new entrants to the billion-dollar category.

• The transportation sector added 3 billion-dollar revenue firms.

Canada’s Billion Dollar Firms: Oil & Gas …

• In knowledge-intensive sectors of the economy, a high degree of churn sees no change in the number of billion-dollar firms but wholesale changes in who those firms are.

• Sectors such as healthcare and technology, for example, saw no net increase in the number of billion dollar firms.

• The IT sector, however, features a large number of SMEs that are contributing to significant growth and employment.

Canada’s Billion Dollar Firms: Knowledge Intensive Sectors

The Good News….

• 146 business accelerators & incubators

• 2nd most entrepreneurial ecosystem

in the world

High-growth enterprises, as

measured by employment (or

turnover), are enterprises with

average annualised growth in

employees (or turnover) greater than

20% a year, over a three-year period,

and with ten or more employees at

the beginning of the observation

period.

Contribute approximately 50% of net

job growth.

What Actually Matters: High Growth Firms

• Talent across sectors and disciplines enabled by strong links with

world-class post-secondary institutions;

• Enabling infrastructure and financing environment;

• Government leadership in both policy and regulation;

• Business culture that embraces risk and experimentation;

• Anchor industry firms who absorb and circulate talent, dollars and

ideas into their local ecosystems;

• Universities that remain on the cutting edge of research, teaching

and experiential learning.

Growth Ecosystems: What’s Necessary

Need to focus on scaling up growth

companies.

Tax policy and incentives needs to

reward growth not size.

Immigration reform to ease flow of

talent.

Firms need to step up and compete.

We have to decide if we’re going to play to win

For more:

Dan Herman

Executive Director, DEEP Centre

Waterloo

dherman@deepcentre.com

@danherman