Inside public service circles this argument on innovation is pretty familiar territory. Canada enjoys economic growth because we're a resource-based economy, but this is slowing, innovation is lagging, and as a reult productivity is dropping. So, as Alex Usher summarizes, "What is needed now are demand-side strategies: procurement policies that promote innovation, more export facilitation, competition policy, intellectual property policy and smarter regulation... The problem is not the supply of innovative ideas: it is the demand for them." Here's the problem. We've been trying to stimulate this demand for years (especially during the Harper years, but still in the Trudeau years) but mostly it amounts to pouring money down a sink. Companies take the money and just keep doing what they were doing. We're not large enough to create markets; we can only create products and market them, but corporate spending on R&D in Canada is low and getting lower (see diagram). And that is why productivity is dropping.
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