Don’t blame resource sector for lack of innovation: study – by Barrie McKenna (Globe and Mail – June 29,2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA – Canada has an innovation problem, but it can’t be pinned on the performance of the booming oil sands and mining industries.

The resource sector scores higher than most other Canadian industries when it comes to innovation, concludes a report released Friday by the Ottawa-based Centre for the Study of Living Standards.

“It’s not inconsistent to have an innovation problem and also have sectors that do well,” said Andrew Sharpe, the centre’s director. “And that’s the case in Canada.” While the resource sector is vital to the Canadian economy, it generates a relatively modest share of the country’s employment and economic output.

So the innovation problem lies elsewhere, most likely in the large service industry, which dominates the Canadian economy and generally suffers from weak productivity, Mr. Sharpe suggested.

“The overall innovation performance of the Canadian natural resources sector is strong and has improved in recent years,” according to the report. “The implication . . . is that Canada’s system of innovation for natural resource industries is doing quite well.”

Far from needing more government help, the resource sector is “grounded” in strong policy support, good technology and consistent collaboration between companies.

The strongest piece of evidence is that the top 10 of Canada’s nearly 200 sub-industries ranked by their use of science and technology are resource industries. The oil sands ranked No. 1.

Overall, the resource sector outperforms the rest of the Canadian economy in productivity, growth rates, intensity of machinery and equipment use, adoption of new technology and hiring of R&D personnel.

The report also said these industries generally stack up well compared to rivals in other parts of the world.

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/economy/economy-lab/dont-blame-resource-sector-for-lack-of-innovation-study/article4381137/