OTTAWA, May 12, 2016 /CNW/ - While relatively few Canadian companies are international, a new report by The Conference Board of Canada's Centre for Business Innovation suggests globalization may improve Canada's innovation performance. The report, Strengthening Symbiosis: International Business Innovation, suggests that Canada needs an integrated approach to innovation and international business.
"Canadian companies and governments need to see innovation and internationalization as two sides of the same coin," said Michael Bloom, Vice-President, Industry and Business Strategy, The Conference Board of Canada. "Globalization improves the incentives to innovate, while innovations need a global market to be commercially viable."
- An integrated approach to innovation and international business could improve Canada's innovation performance.
- Companies need to have the right management capabilities and the right people with international know-how and know-who to compete globally.
- Out of the 1.3 million companies in Canada, approximately 100 are considered global leaders.
Innovation and internationalization policies do not support one another. Innovators are financially supported, but may lack the international business skills to commercialize their innovations. Exporters are encouraged to sell their products to global markets, but often lack the innovation skills required to be successful in these markets. A lack of integration of innovation and internationalization policies and programs results in very few innovative companies reaching global scale.
A gradual increase in the number of innovative Canadian companies has not improved Canada's global innovation rank. The number of Canadian companies considered global leaders is still small relative to the total number of companies, approximately 100 out of 1.3 million. Previous Conference Board of Canada research has also found that only 10 per cent of Canada's small and medium-sized enterprises (SMEs) export. Of all SME export sales, 70 per cent are generated by only 550 firms with the remaining 30 per cent being undertaken by 38,000 firms.
However, just having firms that are ready to enter global markets is not enough. Successful international firms tend to be those that develop unique products or services or adapt their offerings to different markets. They are more likely to participate in global supply chains and build their own. Companies need to have the right management capabilities and the right people with international know-how and know-who to successfully compete in this environment.
The report includes recommendations for improving Canada's innovation performance through globalization:
- Increase the number of successful innovative global companies by mentoring talented young people and promoting participation in global value chains.
- Leverage Canada's foreign subsidiaries networks.
- Integrate the research efforts of its post-secondary institutions and globally orientated companies to stimulate innovation and commercialization.
- Open up protected sectors of the economy to globalization.
Launched in 2012, the Centre for Business Innovation is a five-year initiative designed to help bring about major improvements in firm-level business innovation in Canada.
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SOURCE Conference Board of Canada
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