Title: Innovation, Competitiveness and Economic Development: The Case of Canada AFDC Biennial Forum 2006 September 21, 2006
1Innovation, Competitiveness and Economic
Development The Case of CanadaAFDC Biennial
Forum 2006 September 21, 2006
2Key Messages
- Innovation system consists of many complex and
complementary activities - A multi-pronged strategy is required
- Government investments to address market failures
and large externalities - Sound economic environment
3Links Between Innovation, Competitiveness and
Economic Development
- Creating a flexible, productive economy is key to
competitiveness - Drivers of productivity
- Physical capital
- Human Capital
- Innovation
4Sources of Innovation
- Basic scientific research
- RD in businesses
- External sources
- Key challenge
- Transforming ideas into practical and marketable
technologies
5Canadian Efforts to Promote Innovation
- Canada is a world leader in publicly funded
research
6Canadian Efforts to Promote Innovation (continued)
- However, Canada lags in the G7 when it comes to
RD spending in the private sector
7Canadian Efforts to Promote Innovation (continued)
- Steps to improve innovative performance
- Strengthened publicly funded research
- Programs to help convert public research into
marketable products and services - Venture capital measures
- RD tax incentives
8Creating a Climate for Innovation
- Most important role for government
- Create framework conditions for innovation
- Framework Condition 1
- Macroeconomic stability
- Gives businesses the confidence and means to
invest
9Creating a Climate for Innovation (continued)
- Canadas macroeconomic framework
- Low, stable and predictable inflation
- Sound fiscal management
- Competitive tax system
- Floating exchange rate regime
10Creating a Climate for Innovation (continued)
- Framework Condition 2
- Openness to trade and investment
- Competition increases incentive to innovate
- FDI provides access to new ideas, technologies
and management practices - Access to global markets increases returns to
innovation
11Creating a Climate for Innovation (continued)
- Framework Condition 3
- Effective intellectual property rights
- Potential obstacle to innovation in developing
countries
12Innovation, Competitiveness and Economic
Development The Case of CanadaAFDC Biennial
Forum 2006 September 21, 2006