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Canadian competitiveness stagnates

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by Dcn News Services

Canada’s competitive position has stagnated globally over the last few years as the country under performs in innovation and business sophistication.

OTTAWA

Canada’s competitive position has stagnated globally over the last few years as the country under performs in innovation and business sophistication.

According to the 2013-14 Global Competitiveness Report, released by the World Economic Forum (WEF), Canada ranks 14th overall for the second consecutive year. Canada ranked ninth in 2009.

The report Business Leaders’ Perspectives; Canada’s Competitiveness and Innovation Doldrums, the Conference Board of Canada’s analysis of the Canadian results, focuses on the underwhelming performance in areas such as innovation and business sophistication.

“When it comes to business innovation, Canada is seriously underperforming. Canada actually fell four places in factors related to innovation and business sophistication, and that’s a real concern,” said Michael Bloom, the Conference Board’s vice-president of organizational effectiveness and learning.

“As a developed country, Canada’s economic competitiveness is largely innovation-driven.”

The results show that Canada is getting worse on several factors that do not bode well for the country’s economic and social well-being, says the Conference Board.

In overall innovation and business sophistication factors, Canada dropped four places to 25th in this year’s ranking.

The top two most problematic factors for doing business in Canada are now innovation-related — access to financing, and insufficient capacity to innovate.

The report said Canada has highly-efficient goods, labour and financial markets, but trade barriers are limiting the effectiveness of these advantages.

Canada’s competitiveness could be enhanced by improvements to its innovation ecosystem through more firm-level spending on research and development, government purchasing and use of Canadian advanced technologies, and improving university-industry collaboration when it comes to research and development, says the Conference Board.

The Conference Board report also points out Canada’s competitive strengths including its primary and higher education systems, efficient labour market, and stable and efficient public institutions; nevertheless Canada is not taking enough advantage of this reality. The country fell three places in the ranking of institutional strengths from 11th in 2012 to 14th this year. It also dropped three places in its labour market efficiencies from fourth in 2012 to seventh this year.

Overall, Switzerland was ranked the world’s most competitive economy for the fifth consecutive year, followed by Singapore in second and Finland in third place. Germany and the United States each moved up two spots to fourth and fifth, respectively, while Japan and the United Kingdom ranked ninth and 10th respectively.

Canada slipped ahead of Denmark this year, but could not move up the overall ranking, as Norway advanced four places from 15th to 11th this year. Taiwan and Qatar ranked 12th and 13th respectively.

For the third successive year, the Conference Board carried out the WEF’s Executive Opinion Survey in Canada to obtain the candid perceptions of business leaders.

The Conference Board is also undertaking research through its Centre for Business Innovation, a five-year initiative launched in 2012 to help bring about major improvements in firm-level business innovation in Canada.

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