--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-18/innovation-and-business-strategy-why-canada-falls-short/" title: "Innovation and Business Strategy: Why Canada Falls Short" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T07:31:39+00:00" date_modified: "2026-07-13T07:31:39+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Spring 2009" ipm_keyword: - "BERD" - "business strategy" - "Canada" - "Council of Canadian Academies" - "expert panel" - "innovation" - "productivity" - "R&D" - "technology followers" ipm_research_theme: - "Technology and innovation" ipm_country_focus: - "Canada" - "OECD" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Innovation and Business Strategy: Why Canada Falls Short Canonical URL: https://csls.ca/ipm-archive/ipm-issue-18/innovation-and-business-strategy-why-canada-falls-short/ # Innovation and Business Strategy: Why Canada Falls Short [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-18-4-Nicholson.pdf) Cite this article × Cite this article as: Nicholson, Peter. 2009. “Innovation and Business Strategy: Why Canada Falls Short.” International Productivity Monitor, No. 18 (Spring 2009): 51–71. https://www.csls.ca/ipm-archive/ipm-issue-18/innovation-and-business-strategy-why-canada-falls-short/ ## Author: - Peter Nicholson Special Advisor to the Secretary-General of the OECD; Policy Advisor to the Prime Minister of Canada ## IPM Issue 18 Spring 2009 pp. 51–71 ## Related IPM articles [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Adult Skills and Productivity: New Evidence from PIAAC 2023 Dan Andrews, Balázs Égert, Christine de La Maisonneuve Fall 2025 | IPM Issue 49 | pp. 41–63](https://csls.ca/ipm-archive/ipm-issue-49/adult-skills-and-productivity-new-evidence-from-piaac-2023/) [Appendix: Variable Definitions and Country/Sector Coverage for Regulatory Reform Analysis Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 1–18](https://csls.ca/ipm-archive/ipm-issue-49/appendix-variable-definitions-and-country-sector-coverage-for-regulatory-reform-analysis/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [Appendix: UK Productivity Growth Rates Across Data Vintages and Studies Josh Martin Spring 2025 | IPM Issue 48 | pp. 65–73](https://csls.ca/ipm-archive/ipm-issue-48/appendix-uk-productivity-growth-rates-across-data-vintages-and-studies/) [Opportunities and Risks of Artificial Intelligence for Productivity Francesco Filippucci, Peter Gal, Katharina Laengle, Matthias Schief, Filiz Unsal Spring 2025 | IPM Issue 48 | pp. 1–26](https://csls.ca/ipm-archive/ipm-issue-48/opportunities-and-risks-of-artificial-intelligence-for-productivity/) [Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth Christina Caron Fall 2024 | IPM Issue 47 | pp. 109–147](https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/) [Using Ecosystem Accounting to Integrate the Environment in Measures of Multifactor Productivity Carl Obst Fall 2024 | IPM Issue 47 | pp. 87–108](https://csls.ca/ipm-archive/ipm-issue-47/using-ecosystem-accounting-to-integrate-the-environment-in-measures-of-multifactor-productivity/) [How Does Industrial Policy Impact Output, Hours and Productivity? The Canadian Experience Tim Sargent Fall 2024 | IPM Issue 47 | pp. 39–53](https://csls.ca/ipm-archive/ipm-issue-47/how-does-industrial-policy-impact-output-hours-and-productivity-the-canadian-experience/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn This article summarizes the report of the Expert Panel on Business Innovation appointed by the Council of Canadian Academies. The report presents a fresh look at innovation as an economic process rather than primarily as a science and engineering activity. Noting that Canada’s productivity has been falling further behind that of the United States and many other advanced countries for the past 25 years, the report argues that lagging productivity growth has been due to subpar innovation. Innovation is interpreted broadly to encompass the day-to-day activites of all kinds of businesses looking for new or more efficient ways to serve the needs of customers. The panel concludes that too many businesses in Canada are technology followers, not leaders, and that a fresh discussion on innovation in Canada is needed, one that focuses on the factors that influence adoption of innovation-based business strategies. I NNOVATION — N EW OR BETTER ways of Cet article résume le rapport du Groupe d’experts sur l’innovation en affaires nommé par le Conseil des académies canadiennes. Le rapport propose une nouvelle perspective sur l’innovation en tant que processus économique plutôt que principalement comme activité scientifique et technique. Notant que la productivité du Canada a continué de prendre du retard par rapport à celle des États-Unis et de nombreux autres pays avancés au cours des 25 dernières années, le rapport soutient que la faible croissance de la productivité est due à une innovation insuffisante. L’innovation est interprétée au sens large pour englober les activités quotidiennes de toutes sortes d’entreprises cherchant des façons nouvelles ou plus efficaces de répondre aux besoins des clients. Le Groupe conclut que trop d’entreprises canadiennes sont des suiveuses, et non des leaders, en matière de technologie, et qu’une discussion renouvelée sur l’innovation au Canada s’impose, axée sur les facteurs influençant l’adoption de stratégies d’affaires fondées sur l’innovation. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-18-4-Nicholson.pdf)