Report: Canadian firms least likely to adopt best innovation strategies
Only a fraction of companies adopt the most successful innovation strategy, says Conference Board of Canada.
According to a survey conducted by the Conference Board of Canada’s Centre for Business Innovation, only about one-sixth of Canadian firms adopt an innovation strategy that focuses on competing in international markets. Those firms that do expand into competitive global markets outside of North America, however, earn between 10 to 30 percent more net income than similar firms that use other approaches.
According to the 2012 report – The State of Firm-Level Innovation in Canada – only 14 percent of Canadian firms surveyed make territorial expansion the focus of their innovation strategies while more than half pursue a user needs-driven innovation strategy and approximately one-third adopt a technology-driven innovation strategy.
As in other studies, respondents said innovation funding presents a challenge. Cash from within an operation or from the corporate HQ is the most frequent source, followed by government funding. In addition, firms that look to expand their markets/territory make more use of internal financing and less use of government funding or private equity than do firms with user- or technology-driven innovation strategies.
“It is not clear if use of internal cash is by choice or by constraint,” said Michael Bloom, VP of Organizational Effectiveness and Learning. “In any case, it is interesting that neither private equity nor government financing is more readily available for territorial expansion, given the fact that the companies with such innovation strategies achieve higher average financial performance than other firms do.”
Other survey results include:
- Most prevalent challenges for innovation include lack of funding, organizational culture, poor innovation training, fear of risk, lack of executive focus, and lack of innovation measurement.
- There is a strong correlation between the intensity of innovation efforts and company performance – but only if innovation activities are well managed.