Canadian CEOs more reticent on R&D than global counterparts: Survey

Conservatism, lack of urgency may be to blame
||Last Updated: 05/10/2012

Less than two-thirds (63 per cent) of Canadian CEOs expect to make changes over the next 12 months with respect to their research and development (R&D) and innovation capacity, compared to 72 per cent of their global counterparts, found a recent survey.

Canadian leaders are lower than the global average in terms of their plans for investment across all forms of innovation — from new products and services to finding cost reductions in existing practices, found the PwC report Growth Through Adaptation, which surveyed 1,200 CEOs globally (130 of which were from Canada).  

"There appears to be a general perception that because of our focus and reliance on the natural resources sector, Canada has lagged behind other countries in terms of its investment and support to R&D. We are often seen as a ‘fast follower’ to other countries because that has traditionally been OK in our market," said Tracey Riley, PwC's national consulting and deals leader.

In Brazil, Russia, India and China, R&D and innovation is more of a driving force for future changes. Eighty-two per cent of CEOs in these countries anticipate changes in R&D and innovation capacity in the next year. Proximity may have something to do with Canada's level of investment, said Riley.

"Canada is more distant from most of the emerging markets and low-cost markets that often contribute to, or are the target markets for, innovation,” she said.  

Other explanations as to why Canada is missing the boat on innovation range from its business culture to its geography and political environment. In general, Canada is seen as more conservative in business, more isolated and contained geographically and not having undergone the same turmoil and volatility that has been felt in other countries which are under pressure to develop, found the report. The scale and aggression of competitors is also ostensibly less intense in Canada.

“There is no reason whatsoever why big organizations can't be innovative. But to do so, they must not act like big organizations with the baggage of bureaucracy and excessive top-down control," said David Jacobson, director of emerging technologies at PwC.

Some ways CEOs can do this include:

•reducing the distance between themselves and good ideas — becoming hands-on and really participating

•enabling innovation by providing a framework and encouragement; providing the right atmosphere and incentives; and rewarding the successes

•resisting the temptation to establish a data warehouse of innovative ideas because this and related bureaucratic approaches will dissuade creative people from participating.

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