Editorial - 27-17

Canada's corporate R&D leaders had a good year in 2012, despite the lingering impact of the economic downturn and charges of cash hoarding. According to the latest data from Research Infosource, the Top 100 firms ramped up their spending by 12.6%, improving on their 6.1% increase in 2011 (see lead story).

But the big news in the new ranking is the performance of the highly competitive, globally oriented aerospace sector. With major hikes in spending by four of the five aerospace companies that made the Top 100, the sector spends more than any other industry group, including the perennially top-ranked communications and telecom equipment sector.

The achievement was made possible by the remarkable performance of Bombardier, once an R&D laggard that has recently embraced R&D as a means to increasing global market share. In 2012, it spent $1.9 billion on R&D or 11.3% of revenue — enough to overtake slumping Blackberry Ltd to become the top corporate R&D performer in the nation. Bombardier's R&D performance easily outstrips that of Brazil's Embraer SA, its persistent competitor in the executive jet category which has yet to crack the $200 million barrier in annual R&D outlays.

Combined with the sterling R&D performance of Pratt &Whitney Canada ($527 million), the aerospace sector is one of the few Canadian examples of a thriving tech-based industry able to compete with the best in the world. Other industry sectors would do well to examine aerospace R&D and innovation throughout the value chain and adopt its winning formula to their advantage.