There are only a few countries in the world that have achieved excellent industrial growth by widening the opportunity for generating smart investment from within the country and from others countries as well. Apart from that there are a few considerable things that make a nation competitive enough for industrial growth and business performance enhancement.
Well, along with so many countries taking part in this competition, Canada was also at a suitable position but some recent studies have revealed the decline of the country’s performance. According to The World Economic Forum’s 2014 report, Canada has fallen deep in the ranking for Competitive Industrial Performance Index (CIP). The report actually explains the capacity of a country to establish and increase the presence in international and domestic markets along with evident growth in industrial sectors and activities. According to the report Canada has slipped from the 7th position in 2000s to the 17th position in 2012. Here we are going to describe things that led this result and others positive traits that are still available in here.
A Good Place For Business
Despite a few negative consequences, the country is still a good place for business. It ranks 9th among the 60 largest economies in the world as a good place for business according to the study by Grant Thornton LLP. The study evaluated 22 indicators across five growth areas to come up with the ranking and those areas are; business operating environment, technology, labour market, market growth and financing environment. More so, the country ranks first for its business operating environment that considers some of the key indicators such as; foreign trade and exchange regimes, policies towards private enterprise and compilation.
However, the country scores poor (ranked 20th) in technology and this is where the country lacks the progress. Unless there are enough investments for new and innovative technology, it will not be possible to support the growth of the nation. The country has a huge employer base (51,000), a negligible percentage of which uses and promotes advanced technology.
Commitment to Innovation
A recent research by the Digital Entrepreneurship and Economic Performance (DEEP) has identified some barriers that the country has such as; lack of financing. This is one of the largest obstacles for the small businesses to grow into large-scale companies and compete on the international platform. The country has a very poor level for average technology investment. There were some improvement in the record but that didn’t go on for long. Different studies have revealed the sharp downfall in investment by the Canadian Manufacturers and that led to a 33% technology gap between Canadian and American companies. In order to access the larger markets and increase the incentives fixed cost is required and that can come along with more investment from within the country.
Recognize the Link Between R & D and Productivity
According to the DEEP’s research, we can find demonstrations of links between the extensive R & D Investment and a company’s propensity to qualify as a high-growth organization. There are a few such high-growth organizations in Canada who are characterized by their export orientation and sizeable investments in R & D. it is also have been found in the report that in Canada, exporters were mainly R&D-focused and growth-oriented and they are also in the operation for more years than any non-exporters. More so, the high-growth firms spend 20% of their budget on research and innovation which also ensures the growth. Studies across the world have shown that companies that promote innovation, experience double the revenue growth than non-innovators.
The Link Between R&D and Growth
As it is clear now that skills and management competencies are now an important driver of SME success. Studies have found that exceptional rates of R&D investment and innovation are tightly correlated with average management competencies. Companies that invest in managerial assets through training and exposure to research, technology and international market are very likely to have increased rate of success. So far, Canadian firms are on balance and well-run but, when it comes to producing high-growth firms, the country is outperformed by US, Japan, Germany, Sweden and etc.
Access to Capital
An effective solution to all these problems is access to capital for financing the innovations in the form of technical demonstrations and prototypes. Without sufficient financing, innovations will simply remain ideas and will never turn into reality. Moreover, investment is required for research expansion as well. Canada’s capacity to compete with the international market will largely depend on the access to capital for early-stage capital companies.
Taking care of these things will certainly bring some positive changes in Canada’s business economy and make this country competitive enough for international business market.
Prompt Assembly & Packaging Inc.