Canada Stops Innovating, Slides on Global Competitiveness Scale More Than Any Top Country

Canada’s sliding global competitiveness ranking is due to its weak innovation performance, according to a Conference Board of Canada analysis of World Economic Forum’s Global Competitiveness Index 2012-13.

Overall, Canada’s ranking declined to 14th place in 2012—down from 12th place in 2011 and 10th place in 2010. In the sub-area of innovation and business sophistication factors, Canada fell six places from 15th to 21st. No other top-ranked country dropped by this much.

The Conference Board’s Centre for Business Innovation argues that Canada needs to take advantage of its basic strengths, leverage its abundance of natural resources and skilled workers, and produce value-added products and services for domestic and international markets.

“Canada’s declining overall ranking is indicative of the country’s competitiveness malaise,” says Douglas Watt, Director, Organizational Effectiveness and Learning. “This decline raises concerns about the country’s ability to leverage its relatively strong socio-economic footings for competitive advantage. Some of our top competitors are increasing their competitiveness, so Canada must improve just to keep pace. If we don’t do something, Canada’s future prosperity is in jeopardy.”

“Fourteenth place out of 144 countries is good—but ‘good’ really isn’t good enough anymore,” he continues. “Future national competitiveness—the underpinning of social and economic prosperity—requires that our competitive advantage shift to the production of more value-added goods and services. The key is to pursue new opportunities and enter new markets in order to move away from being excavators of minerals, hewers of wood, movers of bitumen, and wardens of water.”

This decline, the board says, is especially disappointing given that Canada is an advanced economy and at a stage of development where its future prosperity rests mostly on its capacity to innovate. The gap between Canada’s inability to leverage its economic and structural strengths for value-added performance and competitive advantage, the board argues, is one of the greatest roadblocks to improved competitiveness and future prosperity.