Innovation, R&D in Canada

#canada #business #investment #innovation #productivity

After two years of reporting and discussing the need for government actions and business strategies to protect and enhance productivity, we will conclude this topic in 2025 and shift our focus to areas more directly tied to Bosse Management Consulting's projects, such as life science project valuation and development in Canada. To wrap up, we will offer final remarks on the importance of sustained investments in research and development (R&D), along with key discussion points on the very possibility of innovation. The Canadian SHIELD Institute recently published an interesting fact:

"foreign firms operating in Canada spend 8 times more on R&D on a per firm basis than Canadian-owned firms. This is true across every industry other than those dominated by the public sector including education and utilities"

They also found that IT gets twice as many investments than manufacturing and that both sectors received 66% of the total investments. This is concerning, to say the least, as other sectors could benefit from a boost in research and... productivity! Overall the R&D investment situation of Canada has been degrading steadily such that Canada only spends less than 50% of the average OECD country, much behind the US and South Korea. Canadian governments are every level do not seem to be conscious of the this situation. All business leaders, investors and stakeholders should be aware and do what they can to rectify the situation, and protect their business, value, investments.

Canadian businesses must grasp that while the country boasts strong talent and university research, commercialization lags due to limited private R&D investment compared to the U.S. They can make the best of it by leveraging government supports like the Strategic Response Funds for subsidies and enhanced 2024 tax credits for innovation. Most SMEs face risks from low awareness, risk aversion (or misconceptions of risks), and economic uncertainty, potentially driving relocation southward. To succeed, the business sector needs to promote greater competition, eliminate barriers between industries, and emphasize productivity improvements. Individual companies must take action by investing in initiatives that deliver value to their existing customers, attract new ones, and provide strong profit margins. This concludes our industry updates for 2025. Merry Christmas and Happy New Year!