- New Horizons in the Economics of Innovation series
Edited by Louise Earl and Fred Gault
Chapter 3: The Role of Benchmarks and Targets in Canadian Innovation Policy
3. The role of benchmarks and targets in Canadian innovation policy* Surendra Gera, Richard Roy and Thitima Songsakul INTRODUCTION What were once considered the economic fundamentals – economies of scale, low production costs, abundant supplies of labour, location, and cheap natural resources and transportation costs – have less impact on economic activity than in the past. The essential resource is now knowledge, and innovation – the transformation of knowledge into economic value – is the key driver of growth in the knowledge-based economy (KBE). The faster that new ideas make their way into the marketplace as new and better products, processes or practices, the more productive a society becomes and the more likely it is to enjoy a high standard of living and quality of life. Globalization and the shift towards knowledge-based activities underscore the importance of innovation for a country’s long-term prosperity. Canada’s future lies not in being an imitative economy nor in investing in, and adopting, already existing technologies, but in being at the outwardmoving technology frontier. The country must be innovative to maintain its productivity growth and living standards.1 As a result of globalization, Canada is being squeezed into a narrow middle ground. Structural change in Canada has not kept pace with that in the United States, and the country cannot compete against low-cost nations like China, India and Mexico in many standard technology products. In eﬀect, it is being outpaced by countries like China at the lower end and by the United States in leading-edge technologies. With the demographic...
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