--- canonical_url: "https://csls.ca/ipm-archive/issue-2/the-importance-of-innovation-for-productivity/" title: "The Importance of Innovation for Productivity" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-10T09:12:58+00:00" date_modified: "2026-07-13T06:38:08+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Spring 2001" ipm_keyword: - "Canada" - "G-7" - "human capital" - "income gap" - "innovation" - "intellectual property" - "manufacturing" - "OECD" - "productivity" - "R&D" - "United States" ipm_research_theme: - "Policy and institutions" - "Technology and innovation" ipm_country_focus: - "Canada" - "OECD" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # The Importance of Innovation for Productivity Canonical URL: https://csls.ca/ipm-archive/issue-2/the-importance-of-innovation-for-productivity/ # The Importance of Innovation for Productivity [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-2-2-Rao-Ahmad-Horsman-Kaptein-Russell.pdf) Cite this article × Cite this article as: Rao, Someshwar, Ashfaq Ahmad, William Horsman, and Phaedra Kaptein-Russell. 2001. “The Importance of Innovation for Productivity.” International Productivity Monitor, No. 2 (Spring 2001): 11–18. https://www.csls.ca/ipm-archive/issue-2/the-importance-of-innovation-for-productivity/ ## Authors: - Someshwar Rao Innovation, Science and Economic Development Canada - Ashfaq Ahmad Micro-Economic Policy Analysis Branch, Innovation, Science and Economic Development Canada - William Horsman Micro-Economic Policy Analysis Branch, Innovation, Science and Economic Development Canada - Phaedra Kaptein-Russell Micro-Economic Policy Analysis Branch, Innovation, Science and Economic Development Canada ## IPM Issue 2 Spring 2001 pp. 11–18 ## Related IPM articles [Is the SNA Still Useful? 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It identifies Canada’s innovation gap relative to the United States and other G-7 countries, reviewing key drivers of innovation including R&D spending, human capital, intellectual property protection, and openness to trade. The paper argues that innovation—broadly conceived as advances in products, processes, and organizational practices—is the primary driver of long-run productivity growth and income improvement, and examines the appropriate role of government policy in closing Canada’s innovation gap. Cet article examine les liens entre l’innovation, la croissance de la productivité et les revenus réels dans les pays de l’OCDE et au sein des industries manufacturières canadiennes et américaines. Il cerne l’écart d’innovation du Canada par rapport aux États-Unis et aux autres pays du G7, en passant en revue les principaux facteurs déterminants de l’innovation, notamment les dépenses en R-D, le capital humain, la protection de la propriété intellectuelle et l’ouverture au commerce. L’article soutient que l’innovation — conçue au sens large comme les progrès réalisés dans les produits, les procédés et les pratiques organisationnelles — est le principal moteur de la croissance de la productivité à long terme et de l’amélioration des revenus, et examine le rôle approprié des politiques gouvernementales pour combler le retard d’innovation du Canada. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-2-2-Rao-Ahmad-Horsman-Kaptein-Russell.pdf)