Canada’s Innovation Ecosystem
How inclusive is Canada’s innovation ecosystem—and why does it matter?
Canada is neither as innovative nor as inclusive as it needs to be.
While Canada has a relatively strong foundation of basic research and skills to support innovation and entrepreneurial initiative, we struggle to develop and adopt the types of new technologies and innovations that are essential for long-term productivity and prosperity. Moreover, opportunities to participate in and benefit from the innovation economy are unevenly distributed. Women, some racialized communities, people with disabilities, and Indigenous peoples are frequently excluded from good jobs, entrepreneurial support, and an equitable share of income and wealth.
A growing body of research suggests that inclusive economies generate more and better innovation, higher growth, and a more equitable distribution of the resulting benefits. Our aim is to help researchers and policymakers further explore this hypothesis by providing a better understanding of the state of innovation opportunities, activities, and outcomes, how these are distributed among people and communities in Canada, and how Canada compares to other OECD countries.
Opportunities
Canada has high levels of educational attainment, excellent idea generation, and, until recently, an improving ecosystem of innovation financing—but there are deep and persistent inequities in how these opportunities are distributed.
Activities
While we see strong evidence of an entrepreneurial ethos among Canadians, our innovation execution—including business R&D, technology adoption, and new product and service development—is less than stellar. The differences in entrepreneurship by gender, and employment rates by gender, race, and disability, suggest that troubling inequities limit labour market participation for many people.
Outcomes
Canada’s economy is as productive as the OECD average, but far below the productivity levels we need to sustain long-term prosperity and well-being. While Canadians tend to earn more on average than our peers in the OECD, the distribution of income and wealth by race, sex, and Indigenous identities is less equitable by comparison. Canadians do have better intergenerational financial mobility than people in many other countries. However, while poverty in Canada is declining, it persists for millions across the country.
How can we improve data collection—and why does it matter?
The picture of inclusive innovation in Canada and globally is incomplete. Some of the data that would help us better understand innovation and inclusion opportunities, activities, and outcomes are not collected, collected but insufficiently granular, or simply not comparable across jurisdictions. Better data would help us to design more effective policies, programs, and interventions. Our long-term goal is to continue identifying additional data needs and to encourage relevant agencies to collect and share data. Below is a living list of what is missing, and our recommendations to address these gaps:
More robust demographic breakdowns for R&D data
Statistics Canada’s table, Personnel engaged in research and development, by geography, should include demographic breakdowns, including by sex, race, immigration status, sexual orientation, and Indigenous identities. This would improve our understanding of the distribution of opportunities to participate in the research aspect of innovation.
More standardized definitions and collection of VC funding data
Data collected by the OECD and the Canadian Venture Capital and Private Equity Association (CVCA) on levels of and access to venture capital should include additional demographic breakdowns (e.g., by sex, race, immigration status, sexual orientation, and Indigenous identities) to help determine how access to capital is distributed. Efforts to standardize definitions and data collection across organizations and jurisdictions would also be welcome.
More data on LGBTQ2S+ participation in innovation and entrepreneurship
Data is needed to illuminate the extent to which LGBTQ2S+ people have opportunities to participate in and benefit from the innovation economy. Currently there is almost no aggregate, comparable information to track labour market and innovation participation. Questions should be included in the Census, Labour Force Survey, and other data collection initiatives to generate a clearer picture of LGBTQ2S+ participation in innovation and entrepreneurship.
More frequent data on the economic participation of and outcomes for people with disabilities
Currently, the best available information comes from the Canadian Survey on Disability, but it is too infrequently collected and insufficiently comparable to other aggregate labour market data sources. Adding questions about disability to the Census and Labour Force Survey would help to generate a more precise picture.
More data on broadband access and computer access in rural areas
Internationally comparable data on broadband access and computer access in rural areas is extremely out of date; the latest OECD data on Canadian broadband access, which allows for international comparison, is from 2013. The Canadian Radio-Television and Telecommunications Commission (CRTC) provides quality data on this annually, but it is not clear if what the CRTC reports is consistent with OECD definitions of rural and significant broadband access. This information is essential for understanding how Canada compares internationally on ensuring access to education, employment, and entrepreneurial opportunities in all regions.
