Lacklustre innovation performance puts Atlantic provinces at back of the class

N.S. and Nfld and Labrador earn "D"s; P.E.I. and N.B. "D-"s

OTTAWA, Sept. 3, 2015 /CNW/ - Nova Scotia, Newfoundland and Labrador, Prince Edward Island, and New Brunswick find themselves at the back of the class on The Conference Board of Canada's How Canada Performs: Innovation report card. The Atlantic provinces earn "D" and "D-" grades on the first innovation report card to compare Canada, the 10 provinces and 15 peer countries.

"Innovation is important to improving productivity, economic growth, and job creation, as well as to sustaining the high quality of life that Canadians have come to expect," said Daniel Muzyka, President and Chief Executive Officer, The Conference Board of Canada. "The innovation challenge for the provinces is very real. Our report card shows that the Atlantic provinces are weak across indicators of innovation capacity, activity and results."

HIGHLIGHTS

• Nova Scotia and Newfoundland and Labrador earn "D" grades overall on innovation and rank 20th and 22nd, respectively, among 26 jurisdictions.
• P.E.I. and New Brunswick score "D-" grades and rank second-last and last, respectively, among all comparator jurisdictions.
• All four provinces perform poorly on business enterprise R&D, researchers engaged in R&D (including researchers employed in business, higher education and government), and patents.

Eleven indicators were used to measure the provinces' innovation performance. This includes indicators in three categories:

• innovation capacity—i.e., investments and resources that provide a foundation for research, idea-generation, and insight-sharing (including public R&D, researchers engaged in R&D, connectivity, and scientific articles);
• innovation activity—i.e., entrepreneurial ambition, investments in ICT and venture capital, and business R&D activity that help to transform ideas into commercialized products, services and processes; and
• innovation results—i.e., evidence of the impact of research, innovation and commercialization as captured in patents, new ventures, and overall labour productivity.

Nova Scotia is the highest ranking among the Atlantic provinces, but only manages to earn a "D" and ranks 20th among 26 jurisdictions. The province receives a "C" on information and communications technology (ICT) investment and four "D"s for venture capital investment, connectivity,enterprise entry, and labour productivity. Nova Scotia receives "D-" grades on researchers engaged in R&D (including researchers employed in business, higher education and government) and patents. The province also earns a "D-" on business enterprise R&D (BERD). In fact, Nova Scotia ranks last among all comparator jurisdictions on BERD—an indicator on which Canada as a whole ranks last among international peers.

Nova Scotia does well on public R&D. With public R&D of 1.12 per cent of GDP, Nova Scotia earns an "A+" and ranks first among all comparator jurisdictions. The province also earns an "A" and places second on scientific articles, measured as the number of peer-reviewed scientific articles produced in natural sciences and engineering per million population. The province's higher-education sector provides a good foundation for science and innovation potential.

Newfoundland and Labrador earns a "D" grade and ranks 22nd overall. Like Nova Scotia, the province earns "D-" grades on researchers engaged in R&D, BERD, and patents. It receives a "D" on ICT investment and "C"s on scientific articles, venture capital, public R&D, and connectivity. Newfoundland and Labrador's best grade is an "A", which it earns for its enterprise entry rate of nearly 16 per cent—the third-highest rate among the provinces.

Newfoundland and Labrador fares reasonably well on two other indicators, earning "B"s on entrepreneurial ambition (a measure of the share of the working-age population reporting early-stage entrepreneurial activity, such as attempts to establish or own a new business), and labour productivity. However, the province's "B" on labour productivity likely has as much to do with being a resource-intensive economy (with resource riches contributing to its higher GDP per hour worked) as it does with its innovation performance.

Although Prince Edward Island earns "A"s for enterprise entries and public R&D, and manages to score "B"s on ICT investment and connectivity, the "D-" grades it earns for performing below the weakest international peers on five indicators pull down its overall grade and ranking significantly. P.E.I. ranks 25th out of 26 jurisdictions and receives a "D-" grade overall on the innovation report card. The province scores poorly on scientific articles (earning a "C") and on BERD, researchers engaged in R&D, venture capital investment, patents and labour productivity (earning "D-"s on all five).

P.E.I. may be on the right track in terms of adopting innovations to improve processes and efficiency, ranking first among the provinces and 9th among international peers on ICT investment, and third among provinces and 11th among international peers on connectivity. Still P.E.I.'s weakness across the range of indicators, including labour productivity, suggests that it has a long road ahead to improve its innovation performance.

New Brunswick receives a "D-" grade overall and ranks last among all provinces and international peers. The province also has the unfortunate distinction of being the only jurisdiction that fails to earn "A" or "B" grades on any of the indicators used to assess innovation performance. The province earns three "C"s, three "D"s and four "D-" grades, revealing weaknesses in all aspects of innovation performance.

New Brunswick has weak public R&D as a share of GDP (earning a "C") and attracts little venture capital (earning a "D"). It also has very few researchers engaged in R&D (earning a "D-"). The province scores "D"s on scientific articles and ICT investment. With spending of only 0.22 per cent GDP, New Brunswick ranks second-last among all comparator jurisdictions on BERD, and gets a "D-". The province also earns "D-"s on patents and labour productivity and a "C" on enterprise entry.

How Canada Performs is an ongoing research program at The Conference Board of Canada to help leaders identify relative strengths and weaknesses in Canada's socio-economic performance. Six performance domains are assessed: Economy, Education and Skills, Innovation, Environment, Health, and Society.

Released today, and building on previous How Canada Performs analyses, the Innovation report card is the fourth of six to be produced on Canadian and provincial socio-economic performance. To date, the Economy, Education and Skills, and Health report cards have been published. The remaining report cards will follow over the year.

This is the first year that provincial rankings are included in the report cards. Further details, including information on data sources and the methodology behind the rankings, can be found on the How Canada Performs website.

Explore the results of the innovation report card in depth during a live webinar, An Innovation Report Card for the Provinces: Global Leaders & Late Adopters, on September 25, 2015.

View video commentary by Daniel Muzyka, President and Chief Executive Officer, The Conference Board of Canada.

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SOURCE Conference Board of Canada

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