Last year, after concluding that "Canada is weak at business innovation," the
Conference Board of Canada announced that it was establishing a
Centre for Business Innovation (CBI). The new centre's goal: "To learn why Canada is not a leader in business innovation…and to formulate public policies that will successfully stimulate business innovation." The CBI is hosting
an innovation summit in Toronto later this month, at which they'll unveil the results of their first major study examining how Canada fares when it comes to financing innovation.
That report's key message: Canada has a large and strong public equity market, but unfortunately also "has a serious issue with innovation commercialization." As a nation we aren't particularly strong when it comes to riskier investments, in particular when it comes to financing research and development in a business context: "Canadian-based businesses would need to more than double their annual spending on R&D…to equal the business R&D intensity of the United States," the report finds.
In order to make progress, the report goes on, Canadian innovators "need practice tools to help them explain to investors both their innovative activity (e.g. innovation metrics) and the way it makes money (e.g. the business model and financial projections)." In short, we need to smooth the path to commercialization, and in order to do that we need to both provide new financial tools for innovation and develop a more sophisticated marketing culture around innovation. It's not that we lack the capacity for this--as the report points out, "Canada successfully funds risky ventures in mining and oil and gas development."--But we need a broader culture of business innovation, and Canadian innovators need to improve their capacity to sell innovation to potential investors. The CBI will turn to the practicalities of accomplishing that in future reports.
"Financing Innovation by Established Businesses in Canada" is available online [
PDF] (free, but registration required).
Writer: Hamutal Dotan
Source: Conference Board of Canada