There’s a Disconnect Between How Canadians Think About Innovation and What They Actually Do

Canadian technology, entertainment and communications companies aren’t spending as much money on innovation as their counterparts in other countries, according to a new report by international consulting firm PricewaterhouseCoopers (PwC).

The report, which surveyed executives in more than 25 countries, compared the appetite for and spending on innovation.

It found that Canadian firms are slightly more interested in innovation than their international counterparts, with 27 per cent saying of surveyed executives saying that they have an “eager appetite for innovation,” compared to the international average of 21 per cent.

But this higher appetite doesn’t mean Canadian firms are putting their money where their mouth is: Canadian companies only spent an average of 7.8 per cent of revenue on innovation, compared to the global average of 9.6 per cent. Across all industries, 15 per cent of Canadian companies surveyed said they don’t spend anything on innovation, more than twice the global average of six per cent.

Because the survey included many large international firms, this also translated to much lower spending on a dollar basis—with Canadian companies spending an average of $21 million on innovation compared to the international average of $200 million.

“In Canada and worldwide, enthusiasm for innovation is low—and this is reflected in how much is spent on these initiatives,” said Darren Henderson, national technology and communications consulting and deals leader at PwC in a press release. “Part of the issue, however, is in the lack of frameworks and processes needed to build an innovative culture. Building the necessary structures starts at the top, but everyone in an organization has a role to play in bringing new ideas and creative thinking to the table.”

While the far majority of Canadian respondents in the technology, entertainment and communications sectors (which were grouped together in the survey), 85 per cent, said that having a formal structure for innovation is important, only 42 per cent said their business actually has a structure in place. That’s well below the United Kingdom, where 68 per cent of respondents said their companies have a formal structure in place and below the global average of 59 per cent.

Canadian companies in those sectors are also more likely to take money from the government to fund innovation, with 50 per cent reporting that they rely on the government to fund their innovation programs. That’s significantly higher than the U.K., where only 36 per cent of respondents said they take government money and slightly above the U.S. level of 46 per cent.

When to spending that money, Canadian companies are putting it into product development, with 36 per cent in the technology, entertainment and communications sectors saying products were a high priority for innovation, above the global average of 26 per cent.

While American and British companies also said products were a high priority, 20 per cent of companies in the U.S. said customer experience was high priority, compared to eight per cent in Canada.