Over 76 percent of competitive Canadian firms introduced innovations from 2020 to 2022, leveraging advanced tech
Businesses with competitors in their main markets are more likely to innovate.
Recent data from Statistics Canada shows that over 96.9 percent of businesses faced competition in 2022. Moreover, those with competitors were significantly more innovative than those without.
Specifically, 76.7 percent of businesses with competitors introduced innovations from 2020 to 2022, compared to only 38.8 percent of those without competitors. This trend intensifies with the number of competitors; businesses with 11 or more competitors were especially likely to innovate.
In terms of business strategy, Canadian businesses are showing a preference for product positioning over cost cutting, with more than half (51.2 percent) focusing on product positioning as their key long-term strategy through 2027.
This focus is even more pronounced among businesses that face competition, where 54.1 percent prioritized product positioning.
The use of advanced technologies also plays a crucial role in driving innovation. Nearly half of all businesses (47.2 percent) used at least one advanced technology in 2022, with those using such technologies more likely to be innovative (85.2 percent) compared to non-users (60.0 percent).
Adoption of clean technologies has increased slightly, with the utilities sector leading at 33.5 percent.
Skill shortages present another challenge, particularly in skilled trades, management, and business sectors. Businesses that innovate or use advanced technologies reported higher rates of skill shortages, with over half (57.2 percent) of innovative businesses experiencing this issue.
To address these shortages, businesses are increasingly turning to training, retention strategies, and targeted recruitment.
Multinational businesses, especially Canadian multinationals, are more likely to introduce innovations compared to non-multinationals.
Notably, 91.6 percent of Canadian multinationals were innovative during the observed period, surpassing the innovation rates of foreign multinational businesses operating in Canada.
Furthermore, intellectual property (IP) ownership correlates with a higher likelihood of innovation. Over one-fifth of Canadian businesses (21.2 percent) owned IP assets in 2022, with those owning IP more likely to innovate (83.9 percent). Trademarks were the most common type of IP owned.
Additionally, Canadian multinationals were more proactive than their foreign counterparts in protecting their innovations through IP rights, indicating a strategic approach to maintaining competitive advantage.
