Canada's ranking in WEF global competitiveness index continues to fall

Innovation expert questions report's value

Canada has slipped another two positions on the ranking of global economic competitiveness published annually by the World Economic Forum (WEF). The massive report that compiles information from 144 countries says Canada is "being dragged down" by the quality of its research institutions and the government's role in "promoting innovation through procurement policies", compounded by lower university enrollment rates and less than sufficient training of academic staff.

The Conference Board of Canada is the WEF's Canadian partner on the report, which offers few details or analysis to back its observations on Canada or the types of people contacted for the survey. That's a problem, says a leading expert on Canadian innovation who questions the veracity of the report.

Dr Richard Hawkins says the report section on innovation is heavily slanted towards S&T investment with little consideration given to other important factors such as pricing, business models, supply chains and product processes.

"The knowledge contribution of the report is zero. It does not contribute to a better understanding of Canadian innovation," says Hawkins, a professor and Canada Research Chair in science, technology and innovation at the Univ of Calgary. "Science is a success story in Canada, with a modest investment and high impact. Value creation is the key indicator and this report doesn't indicate anything."

The report concludes that the most problematic factor for doing business in Canada is an inefficient government bureaucracy — a factor Hawkins notes is in the top three of most countries.

As for the second biggest problem facing business — inefficient capacity to innovate — Hawkins says there's precious little to substantiate the conclusion.

"I don't know what they mean by that. One of the problems with this report is its old-fashioned approach. It divides the world up into five or six categories where it assumes the economy is being driven by a set of factors. It ignores 50 years of rigorous study that shows it's not that simple," he says. "

Hawkins says Canada appears to be in the middle of the pack as an innovative nation, which is reasonable considering the country's size and natural resource wealth. But by including some measures and not others, an incomplete picture emerges.

"This report only looks at capital investment and concludes that there's insufficient capacity to innovate. I really don't know what they (WEF) means by that," he says. "If you strike a median instead of a mean, it's a completely different picture. About 35 countries account for 95% of the world's innovation. It's highly skewed data."

The WEF report bases its ranking on 12 so-called pillars of competitiveness: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.

Top ranked Finland was selected for its across the board strength in all categories, particularly innovation and labour market efficiency. Singapore ranks second for strength in all categories highlighted by its public and private institutions. Finland moves up one position to third, propelled by strength in health and primary education as well as higher education and training. The US fell from fifth to seventh place, due primarily to a lack of macroeconomic stability, the business community's distrust of politicians and critical business attitudes towards public and private institutions and perceived wasteful spending by government.

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