Canada's rankings in innovation has lagged that of other peer nations for decades despite government efforts to address this issue. Considering its success in developing research programs at its universities, its mediocre rankings overall in technology development is disappointing. Those programs alone have not been enough to translate into entrepreneurial innovation. A 2017 C.D. Howe Institute study points out that, even though Canadians have been at the forefront of breakthroughs in emerging technologies, in many cases, the chief beneficiaries of those breakthroughs have been other nations' economies. Canada needs to take a stronger role in building an environment in which Canadian know-how spurs Canadian business growth. According to a 2017 PwC global survey, Canadian companies stand significantly ahead of their global counterparts in having a dedicated team for digital innovation, with 54% of Canadian respondents reporting that their company does, as opposed to 43% of global respondents. Looking deeper, though, shows a far less innovative spirit, as 47% of respondents said that their pursuit of digital innovation takes the form of seeking to copy others' innovations rather than pursuing their own. Already a decade ago, experts recognized factors that constrain Canadian innovation growth. A 2009 study by the Council of Canadian Academies pointed to two key issues that have held Canadian businesses back from prioritizing innovation in their business strategies. The first issue deals with what has been called "the resource curse." Canada is largely "upstream" in the international supply chain, providing raw materials for other businesses that create products that are in turn passed down the value chain until they reach the stage of finished products sold to end customers. That places Canada in a position far distant from end customers, whose evolving needs spur businesses at the downstream end of the supply chain to adapt, which, in turn, spurs innovation.
Europe a century ago was a global powerhouse of innovation, but it has started to lose its edge: today, despite some notable exceptions, many innovative companies are found elsewhere. Europe is falling behind in growing sectors as well as in areas of innovation such as genomics, quantum computing, and artificial intelligence, where it is being outpaced by the United States and China. A discussion paper from the McKinsey Global Institute (MGI), suggests five paths that could help the continent regain its competitive edge. The paper, Innovation in Europe: Changing the game to regain a competitive edge (PDF--395KB), focuses on ways that Europe could seek to build on its strengths rather than trying to play catch-up, given that it is hindered by fragmentation and lack of scale. This article is a condensed version of the original paper, which draws from MGI research as well as from a recent collaboration with the World Economic Forum. Given Europe's relatively high wage costs and low reliance on natural resources, innovation remains of fundamental importance for the continent's economic and social system. European companies still account for one-quarter of total industrial R&D in the world, but over the past ten years US companies have continued to increase their share, reinforcing their leadership position.
In the early 1970s, the fledgling credit card industry routinely and shortsightedly held cardholders liable for fraudulent transactions, even if their cards had been lost or stolen. In response, Congress passed the 1974 Fair Credit Billing Act to limit cardholder liability. This protection increased public trust in the new payment system and spurred growth and innovation. Because they could no longer just pass fraud losses on to cardholders, payment networks devised one of the first commercial applications of neural networks to detect out-of-pattern card usage and reduce their fraud losses. Smart regulation, like the above example, that gets out in front of emerging technology can protect consumers and drive innovation.
Who wouldn't want to capture some of the estimated $6 trillion in play with the Internet of Things (IoT)? Companies embrace IoT solutions for a number of reasons, such as lowering operating costs, increasing productivity, expanding into new markets, and developing new products/services. However, it may seem as if only small, agile companies are reaping the benefits of the IoT: innovation appears to be the domain of upstarts. A recent Accenture study simply underscored what the leadership at large companies already understand--mature, established firms struggle with innovation. Large corporations have been given the black eye in the technology-driven marketplace.