canada's innovation imperative 2011

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Canada’s innovation imperative Report on Canada 2011 Report on Canada 2011 Roger L. Martin Toronto Reference Library | June 1, 2011

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Page 1: Canada's Innovation Imperative 2011

Canada’s innovation imperativeReport on Canada 2011Report on Canada 2011

Roger L. MartingToronto Reference Library | June 1, 2011

Page 2: Canada's Innovation Imperative 2011

The Institute Mandate

To measure and monitorTo measure and monitor Ontario’s and Canada’s competitiveness, productivity,competitiveness, productivity, and economic progress compared to other provinces, p p ,US states and the US as a whole and to report to the public on a regular basis

1 June 2011

Page 3: Canada's Innovation Imperative 2011

Canada’s Innovation Imperative

Productivity and innovation

AIMS f i tiAIMS for innovation

The innovation imperative:The innovation imperative: Steps to Canada’s prosperity

2 June 2011

Page 4: Canada's Innovation Imperative 2011

Canada Has 9 International Peers

3 June 2011

Page 5: Canada's Innovation Imperative 2011

Canada Is Among The Most Prosperous Of International Peers

4 June 2011

Page 6: Canada's Innovation Imperative 2011

Canada-US Prosperity Gap Remains Significant

5 June 2011

Page 7: Canada's Innovation Imperative 2011

Families Would Benefit From Closing Prosperity Gap

6 June 2011

Page 8: Canada's Innovation Imperative 2011

…And Families Would Be Happier

7 June 2011

Page 9: Canada's Innovation Imperative 2011

GDP Trends Are Very Similar In Canada And US

8 June 2011

Page 10: Canada's Innovation Imperative 2011

Canada Has Outperformed US Participation Rates

9 June 2011

Page 11: Canada's Innovation Imperative 2011

…And Unemployment Rates

10 June 2011

Page 12: Canada's Innovation Imperative 2011

More Canadians Are Working Than In US

11 June 2011

Page 13: Canada's Innovation Imperative 2011

Layoffs Affect Older Workers More Severely

12 June 2011

Page 14: Canada's Innovation Imperative 2011

Institute Measures Four Components Of Prosperity

13 June 2011

Page 15: Canada's Innovation Imperative 2011

Canada’s Labour Effort Matches US

14 June 2011

Page 16: Canada's Innovation Imperative 2011

But Productivity Trails Significantly

15 June 2011

Page 17: Canada's Innovation Imperative 2011

Canada’s Prosperity Gap Is A Productivity Gap

16 June 2011

Page 18: Canada's Innovation Imperative 2011

Our Labour Effort Leads Peers; Productivity Lags

17 June 2011

Page 19: Canada's Innovation Imperative 2011

Innovation And Productivity Are Closely Linked

18 June 2011

Page 20: Canada's Innovation Imperative 2011

Institute Recommends 2020 Prosperity Agenda

19 June 2011

Page 21: Canada's Innovation Imperative 2011

Institute Measures Four Prosperity Components

20 June 2011

Page 22: Canada's Innovation Imperative 2011

Lagging Productivity And Intensity Drive Prosperity Gap

21 June 2011

Page 23: Canada's Innovation Imperative 2011

Lagging Productivity And Intensity Drive Prosperity Gap

22 June 2011

Page 24: Canada's Innovation Imperative 2011

Canada’s Innovation Imperative

Productivity and innovation

AIMS f i tiAIMS for innovation

The innovation imperative:The innovation imperative: Steps to Canada’s prosperity

23 June 2011

Page 25: Canada's Innovation Imperative 2011

AIMS Drives Prosperity; Prosperity Drives AIMS

24 June 2011

Page 26: Canada's Innovation Imperative 2011

Canadian And US Attitudes Are Similar

Ontarians differ little from their US peers in…

Views of business and business leaders

Attitudes toward risk and success

Attitudes toward competition andAttitudes toward competition and competitiveness

Willingness to take action to achieve a higher standard of living

25 June 2011

Page 27: Canada's Innovation Imperative 2011

Our Managers See Risk As Innovation Roadblock

26 June 2011

Page 28: Canada's Innovation Imperative 2011

But Canadian And US Managers Have Similar Views

27 June 2011

Page 29: Canada's Innovation Imperative 2011

Canada’s Public Investment In Education Trails Health Care

28 June 2011

Page 30: Canada's Innovation Imperative 2011

Canada’s Public Investment In Education Trails US

29 June 2011

Page 31: Canada's Innovation Imperative 2011

More Education Means Higher Earnings

30 June 2011

Page 32: Canada's Innovation Imperative 2011

Fewer University Degrees Are Awarded In Canada

31 June 2011

Page 33: Canada's Innovation Imperative 2011

Ontario Pulls Up Canada’s Performance In Degrees Awarded

32 June 2011

Page 34: Canada's Innovation Imperative 2011

Canadian Business Investments Lag US

33 June 2011

Page 35: Canada's Innovation Imperative 2011

ICT Investment Gap Is Larger

34 June 2011

Page 36: Canada's Innovation Imperative 2011

Canada Trails US In Business R&D…

35 June 2011

Page 37: Canada's Innovation Imperative 2011

…Business Is Source Of R&D Gap

36 June 2011

Page 38: Canada's Innovation Imperative 2011

Business R&D Spending Links To Patent Output

37 June 2011

Page 39: Canada's Innovation Imperative 2011

Canadian Business Patenting Trails Significantly

38 June 2011

Page 40: Canada's Innovation Imperative 2011

Many Large-Scale Incentive Projects Fail

39 June 2011

Page 41: Canada's Innovation Imperative 2011

Large-Scale Incentive Packages Can Be Costly

40 June 2011

Page 42: Canada's Innovation Imperative 2011

Taxes Can Be Low And High Or Wise And Unwise

41 June 2011

Page 43: Canada's Innovation Imperative 2011

Our Tax On Business Investment Is Now Much Lower

42 June 2011

Page 44: Canada's Innovation Imperative 2011

Canada Should Explore Tax Policy Innovations

Consider a Carbon Tax

Tax corporations on cash flow, not accruals

Eliminate the corporate tax

Reduce high Marginal Effective Tax Rates forReduce high Marginal Effective Tax Rates for low income earners

T i di id l i iTax individuals on consumption, not income

43 June 2011

Page 45: Canada's Innovation Imperative 2011

Support And Pressure Drive Innovation

44 June 2011

Page 46: Canada's Innovation Imperative 2011

Venture Capital Investment Is Lower In Canada

45 June 2011

Page 47: Canada's Innovation Imperative 2011

Canada Has More Deals

46 June 2011

Page 48: Canada's Innovation Imperative 2011

Venture Capital Deals Are Smaller In Canada

47 June 2011

Page 49: Canada's Innovation Imperative 2011

Venture Capital Returns Have Been Abysmal Recently

48 June 2011

Page 50: Canada's Innovation Imperative 2011

Lean Startups Are New Approach To Venture Capital

49 June 2011

Page 51: Canada's Innovation Imperative 2011

Microfunding Offers Potential For VC

50 June 2011

Page 52: Canada's Innovation Imperative 2011

Microfunding Offers Potential For VC

51 June 2011

Page 53: Canada's Innovation Imperative 2011

Canada Had 15 Billion$ Global Leaders In 1985

52 June 2011

Page 54: Canada's Innovation Imperative 2011

Canada Created 25 New Billion$ Global Leaders, 1985 – 2003

53 June 2011

Page 55: Canada's Innovation Imperative 2011

Canada Created 2 New Billion$ Global Leaders, 2003 – 2010

54 June 2011

Page 56: Canada's Innovation Imperative 2011

Canada Now Has 42 Billion$ Global Leaders

55 June 2011

Page 57: Canada's Innovation Imperative 2011

Canada Now Has 42 Billion$ Global Leaders

56 June 2011

Page 58: Canada's Innovation Imperative 2011

Invention And Innovation: What’s The Difference?

57 June 2011

Page 59: Canada's Innovation Imperative 2011

Innovation Is Key For Canadian Global Leaders

58 June 2011

Page 60: Canada's Innovation Imperative 2011

Base FDI Policy On Reciprocity, Not Net Benefit

59 June 2011

Page 61: Canada's Innovation Imperative 2011

Canada’s Innovation Imperative

Productivity and innovation

AIMS f i tiAIMS for innovation

The innovation imperative:The innovation imperative: Steps to Canada’s prosperity

60 June 2011

Page 62: Canada's Innovation Imperative 2011

The Innovation Imperative: Steps To Canada’s Prosperity

Attitudes

Encourage innovation for Canada to win inEncourage innovation for Canada to win in an ever more competitive world

R i d t i d t l th itRemain determined to close the prosperity gap through aggressive attitudes toward making innovation happen

61 June 2011

Page 63: Canada's Innovation Imperative 2011

The Innovation Imperative: Steps To Canada’s Prosperity

Investments

Invest in the human capital and technologyInvest in the human capital and technology critical for innovation

C ti i ti i l f C d ’Continue investing in people for Canada’s competitiveness

Increase business investment in research and d l t d i i f ti ddevelopment and in information and communications technology

Review provincial policies and programs on incentives to attract businesses to Canada

62 June 2011

Page 64: Canada's Innovation Imperative 2011

The Innovation Imperative: Steps To Canada’s Prosperity

Motivations

Ensure tax changes remain in place andEnsure tax changes remain in place and make Canada a tax innovator

M i t i th t h i O t i ’ dMaintain the recent changes in Ontario’s and British Columbia’s sales and corporate tax structures and encourage governments in Saskatchewan, Manitoba, and Prince Edward , ,Island to follow their lead

Lower marginal effective tax rates for low income Canadians

Consider a carbon tax

Pursue tax policy innovations

63 June 2011

p y

Page 65: Canada's Innovation Imperative 2011

The Innovation Imperative: Steps To Canada’s Prosperity

StructuresDrive innovation through smarter public policies and more international tradepolicies and more international trade

Balance our public innovation strategies

Continue to encourage federal efforts to expandContinue to encourage federal efforts to expand international free trade agreements

Step up our efforts to increase trade with China, our next largest trading partner after the Unitedour next largest trading partner after the United States and the European Union

Replace the net benefit test for foreign direct investment with bilateral reciprocity treatiesinvestment with bilateral reciprocity treaties

Explore policy options to improve venture capital structures

64 June 2011

Keep the friendly pressure on our US neighbours to resist protectionist impulses

Page 66: Canada's Innovation Imperative 2011

Canada’s innovation imperativeReport on Canada 2011Report on Canada 2011

Roger L. MartingToronto Reference Library | June 1, 2011