World Report

A new strategy aims to bring Canada into the top rank of technology-based nations

he thousands of Britons who visit Canada each year – most of them for the first time – all come away with much the same image: a vast country with plenty of fresh air and room to manoeuvre. It is a land of endless forests and plains, massive snow-capped mountains, countless lakes and great, unspoilt wilderness.
Visitors are impressed by the modern cities, the wide range of cultural activities and entertainment, and the keen interest in sporting pursuits. Yet Canadians themselves are only too well aware that their technological development and standards of living remain behind those of their neighbour and main trading partner, the United States.

Now the government has unveiled its master plan to revitalise the economy and make Canada a world leader in research and development (R&D) by 2010. Called the Innovation Strategy, it aims to raise venture capital investments to US levels and increase the number of post-graduate students by two-thirds within a decade.
Industry minister Allan Rock says: “Canada must become more innovative. We need to find ways to create knowledge and bring it to the market more quickly, secure a skilled workforce, support our communities as magnets for investment and make our business and regulatory policies attractive. If Canada is to be successful globally, innovation must be everybody’s business.”

Human resources development minister Jane Stewart says skills and learning are the foundation of the strategy. “It is our knowledge and skills that lead to new concepts and original products and services. This strategy is about equipping all Canadians with the tools they need, because a country with a workforce that knows a lot, creates a lot. Their knowledge is the currency of our economy.”
Canada’s standards of living fell behind those of the US during the 1980s and 1990s, as its industrial competitiveness declined. Canadian companies are only two-thirds as productive as their US counterparts. Canada’s share of foreign direct investment (FDI) in North America has also fallen.
A decade ago, Canada had the third-highest standard of living among industrialised nations; now it ranks last among the Group of Seven (G7), the world’s major industrialised nations, countries.

National debate on ambitions and economic targets

Many Canadians criticise the number of regulations governing their lives and businesses, which act as a damper on economic growth.
The government recognises that a long-term national commitment is required to achieve Canada’s economic potential in the global economy. The Innovation Strategy is a major discussion paper, designed to spark a national debate about goals, ambitions and economic targets, and improve and protect the quality of life.
The government is initiating dialogue with partners in the provincial and territorial governments, and with business, labour, academia and the voluntary sector, as well as individuals. A series of regional and sectoral meetings have been arranged, which will culminate in a national summit this autumn.

The Innovation Strategy paper also sets targets. Education and skills training is at its core. “A knowledge-based economy will require highly-skilled workers to support economic growth and innovation,” the paper’s authors say.
Among indicators of business performance, one of Canada’s lowest scores is for skills training. Within five years, the strategy aims to ensure businesses increase their annual investment in training per employee by one-third.
The strategy paper recognises the contribution to be made by immigrants. “Due to our ageing population and low birth rates, Canada’s labour force growth will slow significantly without immigration,” it says. “Between 1991 and 1996, immigration accounted for 70 per cent of net labour force growth. As a result of demographic shifts, immigrants are expected to account for all net labour force growth by 2011 and for all our net population growth by 2031.”

Canada has been successful in attracting highly-educated people. Recent immigrants have higher average levels of education than the Canadian-born population. In 2000, 58 per cent of working-age immigrants had a post-secondary degree at landing, compared with 43 per cent of the existing Canadian population. “Of the more than 226,000 immigrants and refugees who were welcomed to Canada in 2000, approximately 60 per cent entered as permanent workers,” the paper adds.
Canada’s private sector needs to “aggressively develop its capacity to create new ideas and bring them to market” to remain competitive. The government wants to “vastly increase” public and private investment in IT. More investment is needed for R&D and more strategic alliances to improve access to venture capital. By 2010, the aim is to ensure Canada ranks among the top five countries in the world in R&D performance. This would mean a doubling of the government’s current investment.

An important aspect of the strategy is the establishment of at least 10 internationally recognised “technology clusters” by 2010, and by 2005 to ensure high-speed broadband access is widely available. Canada is seen as a world-leader in creating spin-off companies out of research being done at universities and research institutions.
The Innovation Strategy paper has been welcomed by the business community. “While innovation must be driven by the private sector, the government has recognised that it has a critical role in making Canada an attractive place for investors and entrepreneurs,” says Nancy Hughes Anthony, president and chief executive of the Canadian Chamber of Commerce.