Simple stated there is more work to be done to achieve the 2020 Productivity Challenge. Since 2001 the Institute for Competitiveness, Productivity and Economic Progress mandate has been to measure and monitor Ontario’s competitiveness, productivity, and economic progress compared to other provinces and US states, and to report to the public on a regular basis. A independent not-for-profit organization is supported through the Ministry of Economic Development and Innovation.
Todays Innovation, Tomorrows Prosperity November 2010Colin McKillop
This report discusses Ontario's prosperity and productivity gaps compared to international peers. It finds that Ontario lags behind in productivity, which accounts for most of the prosperity gap. Innovation is highlighted as imperative for Ontario's prosperity. The report sets a 2020 agenda to close these gaps through attitudes that encourage innovation, investments in education and technology, and maintaining tax changes that motivate innovation.
This document provides the 8th annual report from the Task Force on Competitiveness, Productivity and Economic Progress. It discusses how Ontario can navigate through the current economic recovery by focusing on attitudes, investments, and motivations. Specifically, it recommends encouraging innovation and competition, continuing to invest in education and skills training, and ensuring the recently announced tax changes are implemented to benefit Ontarians. The report also analyzes Ontario's productivity gap compared to other regions and how investing in talent, technology, and trade can help close this gap over time.
Trade Innovation And Prosperity September 2010Colin McKillop
New research by the Institute for Competitiveness & Prosperity shows how international trade can raise Ontario’s and Canada’s innovation capabilities to strengthen their competitiveness and future prosperity.
Innovation and Entrepreneurship in JapanMike Korycki
This document discusses innovation and entrepreneurship in Japan. It provides the story of Osamu Tsuji, an entrepreneur who founded Samco and challenged established companies in Japan in the 1970s-1980s. It also outlines some key ingredients for innovative business communities, including infrastructure, research universities, large company R&D, local government support, and venture capital. However, it notes that civic leadership is important to make communities great places to live, which can further drive innovation. Overall, the document examines how both public policy and local leadership can foster entrepreneurship in Japan.
This document discusses stages of economic development and income thresholds used to classify countries. It makes two key observations. First, it questions the lack of clarity and rationale for the income thresholds used by organizations like the UN, World Bank and IMF to distinguish between developing and developed countries. As an alternative, it proposes letting data determine the thresholds. Second, it argues that a trichotomous version with three categories of development may better capture countries in transition phases between developing and developed. The document also lists various financial and economic hotspots around the world in 2010 and early 2011.
The America21 Project: Connecting Urban America to the 21st Century Innovati...ScaleUp Partners LLC
The America21 Project introduces a new economic narrative to empower and connect historically disconnected sectors to America's 21st century innovation economy from pipeline to productivity.
The Innovation Economy consists of three core pillars:
STEM education and workforce development
High-growth Entrepreneurship
Access to Capital and Capital Formation
The document discusses creating 20 million new private sector jobs by 2020 through a national initiative called Jobenomics. It outlines challenges facing the US economy including high national debt, lack of jobs, and declining labor force participation. Jobenomics proposes solutions like small business incubators and targeting women, veterans and other groups to generate the needed job growth.
Z 24. na 21. miejsce podskoczyła polska gospodarka w zestawieniu gospodarek o największym potencjalne do długookresowego rozwoju – wynika z badania Global Dynamism Index, przeprowadzonego przez Grant Thornton.
Todays Innovation, Tomorrows Prosperity November 2010Colin McKillop
This report discusses Ontario's prosperity and productivity gaps compared to international peers. It finds that Ontario lags behind in productivity, which accounts for most of the prosperity gap. Innovation is highlighted as imperative for Ontario's prosperity. The report sets a 2020 agenda to close these gaps through attitudes that encourage innovation, investments in education and technology, and maintaining tax changes that motivate innovation.
This document provides the 8th annual report from the Task Force on Competitiveness, Productivity and Economic Progress. It discusses how Ontario can navigate through the current economic recovery by focusing on attitudes, investments, and motivations. Specifically, it recommends encouraging innovation and competition, continuing to invest in education and skills training, and ensuring the recently announced tax changes are implemented to benefit Ontarians. The report also analyzes Ontario's productivity gap compared to other regions and how investing in talent, technology, and trade can help close this gap over time.
Trade Innovation And Prosperity September 2010Colin McKillop
New research by the Institute for Competitiveness & Prosperity shows how international trade can raise Ontario’s and Canada’s innovation capabilities to strengthen their competitiveness and future prosperity.
Innovation and Entrepreneurship in JapanMike Korycki
This document discusses innovation and entrepreneurship in Japan. It provides the story of Osamu Tsuji, an entrepreneur who founded Samco and challenged established companies in Japan in the 1970s-1980s. It also outlines some key ingredients for innovative business communities, including infrastructure, research universities, large company R&D, local government support, and venture capital. However, it notes that civic leadership is important to make communities great places to live, which can further drive innovation. Overall, the document examines how both public policy and local leadership can foster entrepreneurship in Japan.
This document discusses stages of economic development and income thresholds used to classify countries. It makes two key observations. First, it questions the lack of clarity and rationale for the income thresholds used by organizations like the UN, World Bank and IMF to distinguish between developing and developed countries. As an alternative, it proposes letting data determine the thresholds. Second, it argues that a trichotomous version with three categories of development may better capture countries in transition phases between developing and developed. The document also lists various financial and economic hotspots around the world in 2010 and early 2011.
The America21 Project: Connecting Urban America to the 21st Century Innovati...ScaleUp Partners LLC
The America21 Project introduces a new economic narrative to empower and connect historically disconnected sectors to America's 21st century innovation economy from pipeline to productivity.
The Innovation Economy consists of three core pillars:
STEM education and workforce development
High-growth Entrepreneurship
Access to Capital and Capital Formation
The document discusses creating 20 million new private sector jobs by 2020 through a national initiative called Jobenomics. It outlines challenges facing the US economy including high national debt, lack of jobs, and declining labor force participation. Jobenomics proposes solutions like small business incubators and targeting women, veterans and other groups to generate the needed job growth.
Z 24. na 21. miejsce podskoczyła polska gospodarka w zestawieniu gospodarek o największym potencjalne do długookresowego rozwoju – wynika z badania Global Dynamism Index, przeprowadzonego przez Grant Thornton.
Productivity & the Performance of the Jamaican EconomyPMI_JDBC
Dr Charles Douglas, Executive Director of the Jamaica Productivity Center, addresses the Jamaica Doctor Bird Chapter of the Project Management Institute, on the causes and possible solutions for chronic low productivity in Jamaica.
CORFO is the Chilean Economic Development Agency founded in 1939 to promote Chile's economic development through investment, innovation, and competitiveness. CORFO oversees various programs aimed at generating economic growth, including promoting inward investment and supporting domestic companies. It provides financial incentives such as grants and tax incentives to attract technology-intensive foreign investment and support innovation projects.
Have you ever wanted to show your board or your elected officials the value of economic development? View this ppt to find out how economic development organizations can measure/quantify the value of their promotional activities.
1. Growth refers to the rise in goods and services an economy produces, while productivity is the output per unit of input.
2. Key sources of economic growth include investment and capital accumulation, available resources, compatible institutions, technological advances, and entrepreneurship.
3. Modern growth theories emphasize the role of technological progress rather than capital accumulation, highlighting how technology can overcome diminishing returns through mechanisms like learning by doing.
Productivity and Competitiveness of RMG Industry and policy for ImprovementAshikul Kabir Pias
BANGLADESH IS A DEVELOPING COUNTRY.RMG PLAY A VITAL ROLE IN OUR ECONOMY. THE APPAREL INDUSTRY IS ONE OF THE PILLAR INDUSTRIES OF BANGLADESH. BANGLADESH IS THE 3RD LARGEST APPAREL EXPORTING COUNTRY IN THE WORLD. THE READYMADE GARMENTS (RMG) INDUSTRY IS THE LARGEST SINGLE ECONOMIC SECTOR IN BANGLADESH WHICH CONTRIBUTES TO 76% OF NATIONAL EXPORTS AND 90% OF MANUFACTURING GOODS EXPORTS .
In a few short years, social technologies have given social interactions the speed and scale of the Internet. Whether discussing consumer products or organizing political movements, people around the world constantly use social-media platforms to seek and share information. Companies use them to reach consumers in new ways too; by tapping into these conversations, organizations can generate richer insights and create precisely targeted messages and offers.
While 72 percent of companies use social technologies in some way, very few are anywhere near to achieving the full potential benefit. In fact, the most powerful applications of social technologies in the global economy are largely untapped. Companies will go on developing ways to reach consumers through social technologies and gathering insights for product development, marketing, and customer service. Yet the McKinsey Global Institute (MGI) finds that twice as much potential value lies in using social tools to enhance communications, knowledge sharing, and collaboration within and across enterprises. MGI’s estimates suggest that by fully implementing social technologies, companies have an opportunity to raise the productivity of interaction workers—high-skill knowledge workers, including managers and professionals—by 20 to 25 percent.
La Unión Europea ha propuesto un nuevo paquete de sanciones contra Rusia que incluye un embargo al petróleo. El embargo prohibiría las importaciones de petróleo ruso por mar y por oleoducto, aunque se concederían exenciones temporales a Hungría y Eslovaquia. Este embargo sería la sanción económica más dura contra Rusia hasta la fecha en respuesta a su invasión continua de Ucrania.
Productivity Facts Every Employee Should KnowRobert Half
Tuesday is consistently found to be the most productive day of the week for employees according to multiple surveys of HR managers and executives over several decades. Employees are generally least productive between 4-6pm and the week before a major holiday. Taking vacations can boost productivity as employees tend to be more productive after a vacation when returning well-rested and recharged.
The Productivity Secret Of The Best LeadersOfficevibe
Content by Jacob Shriar & Kevin Kruse.
In this Officeviibe presentation, you'll see:
- 3 biggest problems leaders face and what you can do to fix them
- The secret to time management
- Examples from great leaders
- You'll find bonus content
Canadas Innovation Imperative 2011 Institute For Competitiveness & Pros...Colin McKillop
As the economy recovers and as new provincial and federal governments take the helm, Canadians need to step up to the innovation challenge. Since 2001 the Institute for Competitiveness, Productivity and Economic Progress mandate has been to measure and monitor Ontario’s competitiveness, productivity, and economic progress compared to other provinces and US states, and to report to the public on a regular basis. A independent not-for-profit organization is supported through the Ministry of Economic Development and Innovation.
Report on Canada 2009, Opportunity in the turmoilAndy Dabydeen
Canada's economy is facing significant challenges due to the global economic turmoil, including weak manufacturing, rising unemployment, and returning government deficits. However, Canada remains one of the most prosperous countries globally. The report argues that Canada needs to focus on its long-term prosperity potential by investing in skills, innovation, and competitiveness rather than focusing only on short-term issues. Specifically, the report recommends maintaining investment in human and physical capital, adopting tax reforms to motivate innovation, and improving market structures to value creativity in order to strengthen Canada's economy for long-term success.
This report discusses opportunities for Canada to advance prosperity beyond economic recovery from the recent recession:
1) While Canada's economy is improving after the 2008-2009 recession, lagging productivity remains a hurdle to closing the prosperity gap with the US.
2) The report outlines a 2020 Prosperity Agenda focused on strengthening attitudes, investments, motivations, and structures (AIMS) to encourage innovation and competition.
3) Actions proposed include continuing to invest in education, lowering business taxes, improving innovation policy, and strengthening international trade to enhance Canada's innovative capacity and competitiveness.
Canada’s global competitiveness ranking up another spot to 9th.World Economic Forum rankings indicate improvement in the area of Canada’s economic environment and business sophistication. Our major improvement opportunity continues to be in strengthening the abilities of our businesses to compete on the basis of innovation and uniqueness. In the Global Competitiveness Report 2009-2010 released today by the World Economic Forum, whose Canadian partner is the Institute for Competitiveness & Prosperity, results for Canada in the rankings over 2008’s results were positive. Canada moved up from 10th in 2008 to 9th in 2009 building on a jump from 13th in 2007 on the Forum’s "Global Competitiveness Index".
The document is a report on Canada's innovation imperative from 2011. It finds that while Canada is one of the most prosperous nations, there remains a significant prosperity gap with the United States due to lagging productivity. To close this gap and drive future prosperity, the report recommends that Canada invest more in education, business R&D, and technology. It also suggests tax policy innovations, improving venture capital structures, and balancing public innovation strategies with international trade.
To extend the reach and success of this program into the important stakeholder group of high performing Ontario firms, the February 2008 event marked the first Wisdom Exchange in Ottawa, giving CEOs and presidents the opportunity to network with peers from across the province.
America21 is seeking support to change the economic narrative across America, promote inclusive competitiveness and connect the economically disconnected to opportunity. We've bootstrapped our way to a recognized national voice on minority innovation. We need your immediate help to sustain our activity and expand the movement.
If you're tired of the talk that hasn't moved the data on education, workforce development, employment, entrepreneurship, job growth and access to capital, please consider taking action by supporting America21.
We have a clear vision. We have a solid action plan. We're executing the plan and making progress. Join the cause and be part of a growing network of doers who are making a difference.
Help spread the campaign through your networks. On Twitter, please use #tiredofthetalk and link to this presentation.
Thanks so much for your support!
Dan Herman GKWCC On innovation we're falling behind 1.20.2016danxherman
Canada is falling behind globally in innovation according to several indices. The DEEP Centre examines how governments and businesses can foster innovation-driven growth. Their research focuses on understanding entrepreneurship in the global economy and how to build competitive companies through investments in technology, capital and talent. While Canada performs well in areas like R&D inputs and number of accelerators/incubators, its productivity growth and number of high-growth export-focused SMEs lag peers. The billion-dollar firm category saw most growth in energy, retail and construction, while knowledge sectors saw no net increase. To improve, Canada must scale growth companies through tax policy, attract talent via immigration reform, and incentivize risk-taking through business culture.
In June 2007, CEOs and presidents of Ontario's high performance firms gathered at the Wisdom Exchange to expand their business network, share best practices, benchmark growth strategies and gain advice and insights critical to success.
This document provides an overview of a benchmarking project that evaluated Ontario's economic competitiveness compared to other North American regions based on three factors: technology, talent, and tolerance. For technology, it found that while Ontario has a large high-tech industry, it lags behind peers in patent output and innovation. For talent, it shows Ontario performs well in terms of educational attainment but struggles with brain drain. And for tolerance, the analysis demonstrates Ontario is diverse but performs below average in supporting creative and knowledge-based industries. The report provides this assessment to help inform Ontario's long-term economic development strategy.
This document discusses productivity at multiple levels - national, organizational, and personal. It notes that productivity growth is key to economic growth but that many countries, particularly in Latin America and the Caribbean, have struggled with low productivity. It emphasizes the importance of measurement and provides examples of how productivity can be measured at the national, organizational, and personal levels. Reforms are needed to improve frameworks, management practices, and individual productivity. Proper investments, policies, and partnerships across sectors can drive productivity and competitiveness gains.
Bearing presentation on innovation driven competitive advantage - adc ci - ...Jörgen Eriksson
This document discusses innovation driven competitive advantages and provides an agenda for the presentation. It discusses globalization and hypercompetition as drivers of the need for innovation. It defines innovation and describes different types. It emphasizes that innovation must span the entire business system, including products, business models, marketing and more. It discusses common gaps that companies face in corporate innovation efforts, such as lack of framework, focus on competition over differentiation, and restrictive culture and processes. It provides strategies for making corporate innovation more effective, including developing a clear strategy, using tools like blue ocean strategy and sweet spot analysis, and allowing time and space for creativity.
Productivity & the Performance of the Jamaican EconomyPMI_JDBC
Dr Charles Douglas, Executive Director of the Jamaica Productivity Center, addresses the Jamaica Doctor Bird Chapter of the Project Management Institute, on the causes and possible solutions for chronic low productivity in Jamaica.
CORFO is the Chilean Economic Development Agency founded in 1939 to promote Chile's economic development through investment, innovation, and competitiveness. CORFO oversees various programs aimed at generating economic growth, including promoting inward investment and supporting domestic companies. It provides financial incentives such as grants and tax incentives to attract technology-intensive foreign investment and support innovation projects.
Have you ever wanted to show your board or your elected officials the value of economic development? View this ppt to find out how economic development organizations can measure/quantify the value of their promotional activities.
1. Growth refers to the rise in goods and services an economy produces, while productivity is the output per unit of input.
2. Key sources of economic growth include investment and capital accumulation, available resources, compatible institutions, technological advances, and entrepreneurship.
3. Modern growth theories emphasize the role of technological progress rather than capital accumulation, highlighting how technology can overcome diminishing returns through mechanisms like learning by doing.
Productivity and Competitiveness of RMG Industry and policy for ImprovementAshikul Kabir Pias
BANGLADESH IS A DEVELOPING COUNTRY.RMG PLAY A VITAL ROLE IN OUR ECONOMY. THE APPAREL INDUSTRY IS ONE OF THE PILLAR INDUSTRIES OF BANGLADESH. BANGLADESH IS THE 3RD LARGEST APPAREL EXPORTING COUNTRY IN THE WORLD. THE READYMADE GARMENTS (RMG) INDUSTRY IS THE LARGEST SINGLE ECONOMIC SECTOR IN BANGLADESH WHICH CONTRIBUTES TO 76% OF NATIONAL EXPORTS AND 90% OF MANUFACTURING GOODS EXPORTS .
In a few short years, social technologies have given social interactions the speed and scale of the Internet. Whether discussing consumer products or organizing political movements, people around the world constantly use social-media platforms to seek and share information. Companies use them to reach consumers in new ways too; by tapping into these conversations, organizations can generate richer insights and create precisely targeted messages and offers.
While 72 percent of companies use social technologies in some way, very few are anywhere near to achieving the full potential benefit. In fact, the most powerful applications of social technologies in the global economy are largely untapped. Companies will go on developing ways to reach consumers through social technologies and gathering insights for product development, marketing, and customer service. Yet the McKinsey Global Institute (MGI) finds that twice as much potential value lies in using social tools to enhance communications, knowledge sharing, and collaboration within and across enterprises. MGI’s estimates suggest that by fully implementing social technologies, companies have an opportunity to raise the productivity of interaction workers—high-skill knowledge workers, including managers and professionals—by 20 to 25 percent.
La Unión Europea ha propuesto un nuevo paquete de sanciones contra Rusia que incluye un embargo al petróleo. El embargo prohibiría las importaciones de petróleo ruso por mar y por oleoducto, aunque se concederían exenciones temporales a Hungría y Eslovaquia. Este embargo sería la sanción económica más dura contra Rusia hasta la fecha en respuesta a su invasión continua de Ucrania.
Productivity Facts Every Employee Should KnowRobert Half
Tuesday is consistently found to be the most productive day of the week for employees according to multiple surveys of HR managers and executives over several decades. Employees are generally least productive between 4-6pm and the week before a major holiday. Taking vacations can boost productivity as employees tend to be more productive after a vacation when returning well-rested and recharged.
The Productivity Secret Of The Best LeadersOfficevibe
Content by Jacob Shriar & Kevin Kruse.
In this Officeviibe presentation, you'll see:
- 3 biggest problems leaders face and what you can do to fix them
- The secret to time management
- Examples from great leaders
- You'll find bonus content
Canadas Innovation Imperative 2011 Institute For Competitiveness & Pros...Colin McKillop
As the economy recovers and as new provincial and federal governments take the helm, Canadians need to step up to the innovation challenge. Since 2001 the Institute for Competitiveness, Productivity and Economic Progress mandate has been to measure and monitor Ontario’s competitiveness, productivity, and economic progress compared to other provinces and US states, and to report to the public on a regular basis. A independent not-for-profit organization is supported through the Ministry of Economic Development and Innovation.
Report on Canada 2009, Opportunity in the turmoilAndy Dabydeen
Canada's economy is facing significant challenges due to the global economic turmoil, including weak manufacturing, rising unemployment, and returning government deficits. However, Canada remains one of the most prosperous countries globally. The report argues that Canada needs to focus on its long-term prosperity potential by investing in skills, innovation, and competitiveness rather than focusing only on short-term issues. Specifically, the report recommends maintaining investment in human and physical capital, adopting tax reforms to motivate innovation, and improving market structures to value creativity in order to strengthen Canada's economy for long-term success.
This report discusses opportunities for Canada to advance prosperity beyond economic recovery from the recent recession:
1) While Canada's economy is improving after the 2008-2009 recession, lagging productivity remains a hurdle to closing the prosperity gap with the US.
2) The report outlines a 2020 Prosperity Agenda focused on strengthening attitudes, investments, motivations, and structures (AIMS) to encourage innovation and competition.
3) Actions proposed include continuing to invest in education, lowering business taxes, improving innovation policy, and strengthening international trade to enhance Canada's innovative capacity and competitiveness.
Canada’s global competitiveness ranking up another spot to 9th.World Economic Forum rankings indicate improvement in the area of Canada’s economic environment and business sophistication. Our major improvement opportunity continues to be in strengthening the abilities of our businesses to compete on the basis of innovation and uniqueness. In the Global Competitiveness Report 2009-2010 released today by the World Economic Forum, whose Canadian partner is the Institute for Competitiveness & Prosperity, results for Canada in the rankings over 2008’s results were positive. Canada moved up from 10th in 2008 to 9th in 2009 building on a jump from 13th in 2007 on the Forum’s "Global Competitiveness Index".
The document is a report on Canada's innovation imperative from 2011. It finds that while Canada is one of the most prosperous nations, there remains a significant prosperity gap with the United States due to lagging productivity. To close this gap and drive future prosperity, the report recommends that Canada invest more in education, business R&D, and technology. It also suggests tax policy innovations, improving venture capital structures, and balancing public innovation strategies with international trade.
To extend the reach and success of this program into the important stakeholder group of high performing Ontario firms, the February 2008 event marked the first Wisdom Exchange in Ottawa, giving CEOs and presidents the opportunity to network with peers from across the province.
America21 is seeking support to change the economic narrative across America, promote inclusive competitiveness and connect the economically disconnected to opportunity. We've bootstrapped our way to a recognized national voice on minority innovation. We need your immediate help to sustain our activity and expand the movement.
If you're tired of the talk that hasn't moved the data on education, workforce development, employment, entrepreneurship, job growth and access to capital, please consider taking action by supporting America21.
We have a clear vision. We have a solid action plan. We're executing the plan and making progress. Join the cause and be part of a growing network of doers who are making a difference.
Help spread the campaign through your networks. On Twitter, please use #tiredofthetalk and link to this presentation.
Thanks so much for your support!
Dan Herman GKWCC On innovation we're falling behind 1.20.2016danxherman
Canada is falling behind globally in innovation according to several indices. The DEEP Centre examines how governments and businesses can foster innovation-driven growth. Their research focuses on understanding entrepreneurship in the global economy and how to build competitive companies through investments in technology, capital and talent. While Canada performs well in areas like R&D inputs and number of accelerators/incubators, its productivity growth and number of high-growth export-focused SMEs lag peers. The billion-dollar firm category saw most growth in energy, retail and construction, while knowledge sectors saw no net increase. To improve, Canada must scale growth companies through tax policy, attract talent via immigration reform, and incentivize risk-taking through business culture.
In June 2007, CEOs and presidents of Ontario's high performance firms gathered at the Wisdom Exchange to expand their business network, share best practices, benchmark growth strategies and gain advice and insights critical to success.
This document provides an overview of a benchmarking project that evaluated Ontario's economic competitiveness compared to other North American regions based on three factors: technology, talent, and tolerance. For technology, it found that while Ontario has a large high-tech industry, it lags behind peers in patent output and innovation. For talent, it shows Ontario performs well in terms of educational attainment but struggles with brain drain. And for tolerance, the analysis demonstrates Ontario is diverse but performs below average in supporting creative and knowledge-based industries. The report provides this assessment to help inform Ontario's long-term economic development strategy.
This document discusses productivity at multiple levels - national, organizational, and personal. It notes that productivity growth is key to economic growth but that many countries, particularly in Latin America and the Caribbean, have struggled with low productivity. It emphasizes the importance of measurement and provides examples of how productivity can be measured at the national, organizational, and personal levels. Reforms are needed to improve frameworks, management practices, and individual productivity. Proper investments, policies, and partnerships across sectors can drive productivity and competitiveness gains.
Bearing presentation on innovation driven competitive advantage - adc ci - ...Jörgen Eriksson
This document discusses innovation driven competitive advantages and provides an agenda for the presentation. It discusses globalization and hypercompetition as drivers of the need for innovation. It defines innovation and describes different types. It emphasizes that innovation must span the entire business system, including products, business models, marketing and more. It discusses common gaps that companies face in corporate innovation efforts, such as lack of framework, focus on competition over differentiation, and restrictive culture and processes. It provides strategies for making corporate innovation more effective, including developing a clear strategy, using tools like blue ocean strategy and sweet spot analysis, and allowing time and space for creativity.
Jornada Innovación Madrid. Ponencia 'Innovation easy to say hard to do' Sr. R...iSOCO
This document discusses innovation in Spain and Europe from a variety of perspectives. It begins by noting that innovation is important but difficult to achieve, requiring profound changes. It then examines Europe's high ambitions for innovation over the past two decades that have not been fully realized based on statistics that show Europe lagging behind other regions in areas like research spending and new business creation. The document offers personal impressions that innovation in Europe faces challenges in commercializing inventions, while Spain's culture does not highly value risk-taking and entrepreneurship needed for innovation.
The document discusses challenges and opportunities for innovation in businesses and emphasizes the importance of leadership support for research and development activities. It raises questions about how to better incorporate innovation into corporate strategies and decision making. The presentation also examines ideas for fostering a culture that promotes risk-taking, collaboration, and long-term thinking to support innovation.
Spain has overcome doubts about its economy through structural reforms and fiscal adjustments that have improved competitiveness without currency devaluation. Doubts about the eurozone breaking up have also dissipated due to the ECB's bond-buying program and progress on banking union. Spain has proven it can reduce its current account deficit, cut private and public debt, and diversify exports. With continued reforms, Spain is well-positioned for economic growth and remains an attractive destination for foreign investment.
Spain is emerging from doubts about its economy and is poised to return to growth. It has implemented substantial fiscal adjustments and reforms without excessive negative economic impact. Spain remains competitive and is attractive to foreign investors due to its dynamic industries and leading companies. Continued reforms will help Spain succeed by promoting innovation and high value-added sectors.
This document summarizes the findings of a survey of 29 countries on the impact of the global economic crisis on small and medium sized enterprises (SMEs) and the policy responses of governments. It reports that SMEs have been hard hit by a decline in demand and tighter credit conditions. SMEs face depleted working capital due to payment delays and increased insolvency rates, showing their difficulty obtaining short-term financing. Governments have implemented measures to support SME sales, access to liquidity, and investment levels. The document proposes further actions governments could take to help SMEs through recovery and prepare them for future innovation-led growth.
How why and when to raise venture capital norcat hot topics seriesNORCAT
This document discusses challenges facing Canada's innovation economy and strategies to support it going forward. It notes Canada's shifting economic focus from natural resources to manufacturing to services/technology. While Canada has advantages like education and proximity to markets, its innovation performance has been lackluster, with declining R&D spending and a "D" grade on innovation. The document advocates developing a comprehensive strategy across education, immigration, productivity, entrepreneurship culture, and financing to foster innovation and position Ontario competitively in the 21st century knowledge economy.
Similar to Prospects For Ontario 2011 Task Force On Competitiveness, Productivity And Economic Progress (20)
This document discusses the importance of supply chain management for companies and its rising priority for CEOs. It makes three key points:
1. Leading companies view their supply chain as a source of competitive advantage and have made strategic investments to overcome cross-functional silos. This allows them to better satisfy customers and disrupt their industries.
2. CEOs recognize supply chain excellence is critical for profitability and resilience in today's complex global environment. The right supply chain capabilities help companies exploit opportunities for growth.
3. There are three actions CEOs can take - differentiate supply chain and corporate strategies, create a modern end-to-end supply chain organization, and set performance standards for the entire organization - to maximize
This document presents the IMD World Talent Report for 2014. It includes the IMD World Talent Ranking for 60 economies based on factors related to investment and development of talent, appeal for talent, and readiness of the talent pool. The report analyzes trends in countries' rankings from 2005 to 2014 and identifies countries that have consistently ranked in the top 10 over this period. It describes the structure of the ranking and the methodology used to calculate and normalize scores on various talent-related criteria to determine countries' overall rankings.
The article summarizes the results of a study that ranked the top 40 companies for leadership development. Procter & Gamble ranked first due to its CEO's commitment to leadership development and focus on growing talent internally. Other top companies included IBM, General Electric, 3M, and Southwest Airlines. The study evaluated companies based on factors like formal leadership programs, CEO involvement, internal hiring, and financial performance. It found some differences between public and private companies in priorities and challenges for leadership development. A separate list highlighted the top 10 private companies for developing leaders.
Measuring The Costs Of The Canada Us BorderColin McKillop
This document analyzes the costs associated with border crossing between Canada and the US since 9/11. It finds that after 10 years of border security innovations, costs have not decreased significantly while government spending has increased markedly. It estimates the total annual cost to be C$19.1 billion or 1.47% of Canada's GDP in 2010. This includes costs to trade, tourism, and government programs. It recommends the Canadian and US governments provide more detailed cost reporting and evaluations to improve border management policies and determine if new programs are cost-effective.
Manufacturing is experiencing a crisis of confidence in the United States. Americans view the manufacturing sector in the U.S. as fragile and unstable.
Competing In The 21st Century Skills Race Canadian Counsil Of Chief Executi...Colin McKillop
Canada is in danger of losing ground in the global economy unless educators and governments convince more young people to pursue science-related careers, the new report suggests.
An Energy Strategy For Canada July 2012 Canadian Council Ce OsColin McKillop
This document outlines a proposed energy strategy for Canada consisting of 10 key elements: 1) Enhance the Canadian energy brand internationally, 2) Strengthen energy literacy and conservation culture among Canadians, and 3) Build greater North American energy self-sufficiency through expanded infrastructure and cooperation. It argues for diversifying energy markets beyond North America, investing in infrastructure, creating a technology advantage, ensuring efficient regulatory processes, and facilitating stronger partnerships with Aboriginal peoples on energy projects. The overall vision is for Canada to responsibly develop and export its diverse energy resources while transitioning to a sustainable energy future.
United States & Canada A Shared Vision Economic CompetitivenessColin McKillop
The document outlines a shared vision and action plan between the US and Canada to enhance security and accelerate legitimate trade and travel across their border. It discusses principles of cooperation, key areas of cooperation like addressing threats early through improved intelligence sharing and screening travelers. It also covers facilitating trade and economic growth through modernizing border infrastructure and pursuing opportunities to integrate efforts. The goal is a perimeter approach that strengthens both countries' security and supports job creation and prosperity on both sides of the border.
The document discusses the choice facing the United States between prioritizing trade with North America or Asia in the 21st century. It argues that focusing on deepening economic integration with Canada and Mexico through initiatives like infrastructure investment would do more to stimulate the US economy and create jobs than the Trans-Pacific Partnership. Strengthening North America as a economic bloc would also give the region more bargaining power in negotiations with Asia. The author believes North America should be the top trade priority over the TPP.
Canada’s GDP growth softened
from 3.2% in 2010 to 2.5% in 2011 as consumption
slowed and exports continued to surge ahead, helped
by soaring commodity prices and strong demand
from emerging markets. High levels of consumer debt and an overheating
housing market remain near-term concerns. A boost in exports from rising
US demand in 2012 will help to offset soft consumption, but Canadian
exporters will continue to struggle with the effects of a very strong currency,
which is not only lowering the Canadian dollar value of foreign sales but
also increasing the cost of Canadian inputs (such as labour) relative to
US and other competitors. Nevertheless, the strong export performance
in 2011 demonstrates that Canadian companies have been able to adapt
and compete despite the soaring loonie.
This document discusses strategies for companies to pursue growth opportunities in emerging markets. It finds that while executives see growth potential, many lack confidence in their ability to capitalize on these opportunities. Successful companies excel at sizing future demand, shaping new demand, and operating with agility. The document provides recommendations for building capabilities in market assessment, partnership, innovation, and speed of operations to accelerate growth efforts in high-potential emerging markets.
Delivering Results Growth And Value In A Volatile World 15th Annual Globa...Colin McKillop
This report is based on survey
interviews with the Top 104 Automotive CEOs across 31 countries, as well as in-depth interviews with CEOs from companies across the automotive value chain.
Prosperity At Risk Findings Of Hbs Survey On U.S. CompetitivnessColin McKillop
The survey found that a large majority (71%) of respondents expect U.S. competitiveness to decline over the next three years. Respondents expect greater pressure on American workers' living standards than on the ability of U.S. firms to succeed. Pessimism about U.S. competitiveness was widely shared, though respondents between ages 40-59, those in firms exposed to international competition, and those located in the U.S. were more pessimistic. Respondents in manufacturing also had a more negative view of competitiveness compared to other sectors.
The document analyzes the relationship between scale and productivity in Canada's food processing sector. It finds that:
- Canadian food processors are significantly smaller in scale than their US counterparts, with half the employees and sales.
- Larger facilities are more productive, with value added per employee twice as high for large vs median facilities. Canada's smaller scale hurts overall productivity.
- Investment in machinery and equipment per worker is lower in Canada.
- Barriers like marketing regulations, border effects, and allocation of supply limit the scale of Canadian firms.
Increasing scale through policy reforms could help narrow Canada's productivity gap with the US in the food processing industry.
This document provides an overview of Export Development Canada's (EDC) Corporate Social Responsibility (CSR) activities in 2010. It discusses EDC's CSR governance structure and policies to ensure all projects and transactions are financially sound as well as environmentally and socially responsible. The report details EDC's economic, environmental, and social performance in 2010, including conducting environmental reviews of transactions and projects to assess risks. It also outlines EDC's efforts to promote diversity and community investment.
This document summarizes the key findings of a benchmark study from Aberdeen Group that analyzed over 640 organizations regarding their use of talent assessments. The study identified best practices of organizations ("Best-in-Class") that achieved high performance in areas like employee performance and succession planning. Best-in-Class organizations were found to use assessments at multiple points in the employee lifecycle from hiring to succession. They collaborated between HR and business leaders to define competencies for assessments and used various assessment types appropriate for different decisions. Adopting these assessment strategies was correlated with improved metrics like employee performance and hiring manager satisfaction.
The document summarizes the Global Leadership Development Project. It discusses how the project will expand to collect ongoing data from organizations annually on important leadership issues identified in previous surveys. The research process will be ongoing, seeking annual participation from leaders and HR executives involved in leadership development and succession planning. The project aims to better understand leadership requirements in different contexts and establish categories of excellence for evaluating leadership development programs.
MANAGEMENT TALENT - To achieve our full economic potential in Canada, we need strong management talent to drive innovation and develop world-beating strategies. While new evidence indicates that we are among the world’s leaders in our management talent; it also shows that our managers could do better.The Working Paper draws on research to show that management occupations are important contributors to prosperity in Canada’s city-regions – as important as scientific talent. It also shows that the development of new management techniques, such as just-in-time logistics and lean manufacturing, can lead to economy-wide growth in productivity and prosperity. “Management breakthroughs can be as important to our prosperity as new scientific discoveries,” The Working Paper presents the results of the first-ever study of the capabilities of Canada’s and Ontario’s management in the manufacturing sector versus other leading economies in the world. According to Martin, “we find that our manufacturing management is among the best in the world, ranking in the top tier of the various measures. Nevertheless, the research points to improvement opportunities, especially in performance management and people management.”
Prospects For Ontario 2011 Task Force On Competitiveness, Productivity And Economic Progress
1. ProsPects
ar 10
for oNtArIo’s
ProsPerIty
A look back and a look ahead
Task Force on compeTiTiveness, producTiviTy
and economic progress
tenth
Annual
report
November
2011
4. exhibits
main Exhibits
Exhibit 1 Ontario ranks among the leading international peers 8
Exhibit 2 Ontario trails its North American peers 8
Exhibit 3 Ontario’s prosperity gap widened slightly in 2010 9
Exhibit 4 Ontario’s GDP performance compared to other Canadian provinces
has been lackluster 10
Exhibit 5 The Task Force has set out a 2020 Prosperity Agenda to
narrow our prosperity gap 13
Exhibit 6 The Task Force measures four components of prosperity 16
Exhibit 7 Higher productivity is needed to close Ontario’s prosperity gap 17
Exhibit 8 Lagging productivity accounts for most of our prosperity gap 17
Exhibit 9 Ontario has a demographic advantage over our peers 29
Exhibit 10 Ontario has a higher participation rate than peers 30
Exhibit 11 Ontario’s unemployment rate fell and then rose again in the recession 31
Exhibit 12 Ontario leads its peers in utilization of its working age population 32
Exhibit 13 Ontario workers are on the job less than North American peers,
but more than their international peers 33
Exhibit 14 Ontario has a persistent and significant productivity gap 34
Exhibit 15 Ontario has made good progress in awarding bachelor’s degrees,
but still trails at the master’s level 37
Exhibit 16 Ontario continues to trail in awarding business degrees 37
Exhibit 17 Fewer Ontarians lack a high school diploma 38
Exhibit 18 Unemployment rates are higher for those with less education 39
Exhibit 19 Ontario’s managerial education gap has closed slightly 41
Exhibit 20 The incidence of Ontarians living in poverty has not changed much 42
Exhibit 21 In Ontario, public investment in education trails health
care spending significantly 45
Exhibit 22 Our businesses lag their US counterparts in productivity
enhancing investments 46
Exhibit 23 Ontario’s businesses trail in R&D investments 48
Exhibit 24 Ontario businesses lag in patent creation 49
Exhibit 25 Ontario is now a low tax jurisdiction for business investments 50
Exhibit 26 Support and pressure drive innovation 52
Exhibit 27 Ontario has a higher share of its workers in clustered industries 53
Exhibit 28 Ontario’s lower percentage of population in metropolitan areas
reduces its productivity 54
Exhibit 29 Venture capital investment in Ontario trails US leaders’ quantity and quality 55
Exhibit 30 Canada has negotiated or is in the process of negotiating several trade deals 56
Exhibit 31 Ontario has gained Global Leaders since 1985, but has lost ten since 2003 57
sidEbar Exhibits
Exhibit A Larger food processing facilities are more productive 21
Exhibit b Older workers are most severely affected by layoffs 40
2
5. contents
ForEword & acknowlEdgEmEnts 4
prospEcts For ontario’s prospErity 6
our prospErity gap is a productivity gap 14
Four FActors mEAsurE ontArio’s prospErity gAp 16
Ontario has good work effort performance 16
Higher productivity is needed to close Ontario’s prosperity gap 19
productivity dEFicit is worsEning 22
a tEn-yEar rEtrospEctivE and outlook For thE FuturE 24
work EFFort And productivity 28
Ontario’s prosperity growth needs to come from productivity growth
humAn cApitAl 36
Our innovation performance depends heavily on our people and their capabilities
invEstmEnt 44
Investments are the lifeblood of innovation and prosperity; Ontario businesses and
governments need to invest more
support And prEssurE 52
Public policy needs to drive both support and pressure to enhance
our innovation performance
actions For innovation and prospErity 58
prEvious publications 64
3
6. foreword & acknowledgements
on bEhAlF oF ontArio’s tAsk ForcE on compEtitivEnEss, productivity
And Economic progrEss, I am pleased to present our Tenth Annual Report
to the Ontario public, Prospects for Ontario’s prosperity: A look back and a
look ahead. Because of this special anniversary and the beginning of a new
government in Ontario, we look back over the decade since 2001 and ahead
to 2020 in this year’s Report. Our challenge has been, and continues to be, to
achieve our full economic potential through higher productivity and more
robust innovation performance.
A recurring theme over the past ten years has been a recognition that
Ontario is one of the most competitive and prosperous regions in the world.
We have much to be thankful for – a rich endowment of natural resources,
a tradition of building great physical assets and infrastructure to support
prosperity, and a talented and diverse workforce that can get the job done.
But despite these great strengths and solid economic results, we could do so
much better. We have a wide prosperity gap with other large North American
jurisdictions. The source of this gap is our inability to be as innovative as we
could be in our economic life. While we lead most other regions around the
world in competitiveness and prosperity, we do so largely by working more,
not by being more innovative and productive – or working smarter.
In taking stock of the past decade, we have some significant accomplish-
ments to celebrate. Frankly, these accomplishments are more in the public
policy arena than in the business sector.
The provincial government has helped turn around our flagging investment
in post secondary education. Along with the federal government, it has moved
our tax system for business investment from being one of the world’s worst to
one that is better than most. The province has worked closely with the federal
government to expand international trade and has avoided the worrisome
trend toward protectionism that we have seen elsewhere, particularly in the
United States.
Going forward, the provincial government should continue its international
trade initiatives, keep investing in post secondary education, and explore
new approaches to its Innovation Agenda. We urge the federal and provincial
governments to build on our tax policy accomplishments by exploring funda-
mental tax reform that is surely coming in other parts of the world.
4
7. While we lead most other regions
around the world in competitiveness
and prosperity, we do so largely
by working more, not by being
more innovative and productive –
or working smarter.
The positive developments in public policy will not turn our innovation
performance around overnight. Education investments take up to a genera-
tion to deliver a return, negotiations for trade deals are slow processes, and
tax policy changes are just barely implemented. But they are a solid platform
to support more innovation by our businesses.
Our business leaders and people understand the need for innovation, but
they still need to turn these positive attitudes into action. They cannot be
complacent; instead, they must relentlessly pursue improved products,
services, and processes. Our businesses have to step up investments in
innovation – from R&D and patenting to adapting existing technology to their
business; from investments in physical capital to investments in human assets.
As in past Reports over the decade, we offer a set of recommendations for an
overall Prosperity Agenda for 2020. And, as in the past, none is a quick fix, but
they put Ontario on the right track to build a more competitive and prosperous
economy.
Ontario has many of the building blocks to achieve its full prosperity,
productivity, and innovation potential. Ontarians need to put them together
for the benefit of ourselves and our future generations.
We gratefully acknowledge the research support from the Institute for
Competitiveness & Prosperity and the funding support from the Ministry
of Economic Development and Innovation. We look forward to sharing and
discussing our work and findings with all Ontarians. We welcome your
comments and suggestions.
Roger L. Martin, Chairman
Task Force on Competitiveness, Productivity and Economic Progress
Dean, Joseph L. Rotman School of Management, University of Toronto
5
9. in this tEnth AnnuAl rEport to thE pEoplE oF ontArio, the Task Force on
Competitiveness, Productivity and Economic Progress looks back on the last
decade of economic progress in the province and looks ahead with recommen-
dations for stakeholders in our future prosperity. This historical and future
perspective is the essence of this year’s Annual Report, and is especially timely
as a new government begins its mandate.
But even on this occasion for a long-term perspective, it is hard to avoid a
review of the recent tumultuous past. Ontario, the rest of Canada, and count-
ries around the globe have been on an economic roller coaster. And it’s not
over yet.
Over much of the decade since our establishment in 2001, Ontario
experienced moderate growth in Gross Domestic Product (GDP). But it was
too moderate for our economy to achieve its full economic potential. And
since the beginning of the downturn in 2007, GDP growth has been anemic.
The net effect is that between 2001 and 2010, Ontario’s GDP per capita has
barely budged.
Our stock market has been whipsawed. Between 2002 and 2008, the TSX
index more than doubled. It has swung dramatically in the past three years.
The Canadian dollar has strengthened since 2002, when it was at 62 cents,
reaching $1.08 in November 2007. Recently, it has fallen back from that high
and stood near parity in October 2011.
The dollar’s rise has certainly boosted pride among Ontarians, but it had
severe consequences for our export industries, particularly manufacturing.
Between 2002 and 2009, Ontario’s manufacturers shed 300,000 jobs. While
the hemorrhaging has stopped, there is no evidence that these jobs will be
coming back soon.
Despite the recent loses in manufacturing jobs, for most of the past decade,
we have experienced low and declining unemployment rates. At the outset of
our work, Ontario’s unemployment rate stood at 7.0 per cent and then declined
to a low of 5.9 percent in May 2006. But, with the onset of the recession begin-
ning in December 2007, the rate turned up to 9.4 percent, adding 261,000
workers to the unemployment rolls. In last year’s Annual Report, we ventured
the hope that the recession was over, but the August 2011 unemployment
report and other recent economic reports here in Canada and in the United
States hint that we may be headed toward a double dip recession.
The seeds for this decline and instability were not sown in Ontario.
All developed economies are undergoing this turmoil. Ontario and Canada
have experienced less economic volatility than many other countries, and
we do not face the same level of challenges most do. Many have truly
daunting government deficits and debt loads, high average lengths of
unemployment, and financial systems that are still not back to full health.
But we cannot be complacent, especially as economic indicators around the
world become more discouraging.
7
10. Our economy is standing still
while other jurisdictions stay ahead
of, or gain, on us.
Exhibit 1 Ontario ranks among the leading international peers
2009 GDP per capita (C$ 2010)
Ontario and international peers
Hessen (GER) $52,600
Bayern (GER)
Lombardia (ITL)
Baden-Württemberg (GER)
New South Wales (AUS)
Ontario $45,600
Kanto (JP) $45,000 Median
Cataluña (SPA)
Vlaams Gewest (BEL)
Nordrhein-Westfalen (GER)
Rhône-Alpes (FRA)
Kinki (JP)
South East (UK) $39,800
Note: Because of limited GDP data on Kanto & Kinki, Japan's national GDP growth rate from 2008 to 2009 is used to estimate Kanto & Kinki's GDP in 2009. All currencies
converted to Canadian dollars using PPP.
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada; Australian Bureau of Statistics; Ontario Ministry of Finance; Statistische
Ämter Des Bundes Und Der Länder; Regional Statistical Yearbook Lombardia; National Bank of Belgium; Institut national de la statistique et des études économiques
(INSEE); SNA Statistics National Accounts of Japan; Japan Statistics Bureau & Statistics Center; UK Office of National Statistics; Instituto Nacional de Estadística;
Eurostat; OECD and IMF.
Exhibit 2 Ontario trails its North American peers
2010 GDP per capita (C$ 2010)
Ontario and North American peers
New York $71,200
Massachusetts
New Jersey
Virginia
California
Illinois
Texas
Pennsylvania
Median $54,200
North Carolina
Indiana
Ohio
Georgia
Florida
Michigan
Ontario $46,500
Québec
Note: US GDP numbers converted to Canadian dollars using 2010 PPP.
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada; Ontario Ministry of Finance; Banque de données des
statistiques officielles sur le Québec; US Department of Commerce, Bureau of Economic Analysis and US Census Bureau.
8 PROSPECTS FOR ONTARIO’S PROSPERITy
11. Even with all the economic uncertainty in the air, our message to Ontarians
remains the same as it has been over the decade: we have great strengths as a
province and yet we seem not to be able to achieve our full prosperity poten-
tial. We offer no silver bullets or quick fixes to propel us out of this inertia.
Instead, we recommend an ongoing Prosperity Agenda that takes us in the
right direction and will pay off in the long term.
We have seen some good progress on some aspects of our Agenda in recent
years. But, in many ways, our economy is standing still while other jurisdic-
tions stay ahead of or gain on us.
Among large advanced economies, we are one of the most prosperous, out
pacing most regional economies in Europe, Japan, and Australia in GDP per
capita (Exhibit 1). Our businesses, workers, and governments generate more
value from our endowment of resources than most large diverse economies
around the world.
But, closer to home, in populous states and provinces in North America,
Ontario ranks a dismal fifteenth out of sixteen. In 2010, Ontario trailed the
median of these North American peers by $7,700 per capita or 14.2 percent
(Exhibit 2). (In all our analyses, unless otherwise stated we use constant 2010
dollars converted at the Canada/US purchasing power exchange rate
of 1.203.)
This has changed little since 2002, when the gap was $6,300. Back in 1981,
Ontario stood above the median. But through the recession of the early 1990s,
we fell behind these large US states and have not been able to rank better than
fourteenth in the last decade (Exhibit 3).
Exhibit 3 Ontario’s prosperity gap widened slightly in 2010
000 GDP per capita
(C$ 2010) 1981–2010
$80
Peer leader
60
Peer median
Ontario
40
20
0
‘81 ‘85 ‘90 ‘95 ‘00 ‘05 ‘09 ‘10
Ontario Rank 8th 10th 13th 15th 15th 15th 14th 15th
Prosperity lead/(gap) $400 ($600) ($1,800) ($5,700) ($7,500) ($6,500) ($7,100) ($7,700)
Note: 1997 shows the break in the US method of calculating state-level GDP from SIC-based to NAICS-based. US state GDP numbers are converted to Canadian
dollars using 2010 PPP.
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada; Ontario Ministry of Finance; US Department of Commerce,
Bureau of Economics Analysis and US Census Bureau.
9
12. We continue to believe that Ontario’s true benchmarks are other large,
developed provinces, states, and regions around the world. But, to make more OntariO gdp
concrete this sense of economic drift in Ontario, it is also worth examining our
standing inside Canada.
per capita
(c$ 2010)
Our economic performance is falling behind that in other Canadian provinces.
Against the three provinces where resource development accounts for more
than 30 percent of their GDP – Alberta, Saskatchewan, and Newfoundland &
Labrador – Ontario fares poorly (Exhibit 4). This comparison is not particu-
larly apt, as it is hard to credit these provinces with great economic policy
2001
$45,600
when they benefit significantly from the increase in world prices of oil and
other commodities. However, against the other non-resource provinces,
Ontario’s performance has not shone either. No doubt, this is partly because
our manufacturing industry has been severely hurt by the dollar and the
current global downturn. But we cannot expect a turnaround in this area. So
we have to build a more innovative economy – the key to thriving in the
increasingly competitive global environment.
In taking stock of the past decade, we have some significant accomplish-
2010
$46,500
ments to point to. They are more public policy accomplishments that build
Ontario’s capabilities, rather than private sector achievements. None will
fix things quickly, but they put Ontario on the right track to build a more
competitive and prosperous economy.
Exhibit 4 Ontario’s GDP performance compared to other Canadian provinces has been lackluster
000 GDP per capita
(C$ 2009) Canadian provinces, 2001–2009
$70
65
Resource-based economies
(Alberta, Saskatchewan and
Newfoundland and Labrador*)
60
$18,900
55
$15,400
50
45 Ontario
$4,300
$7,700
40
Non resource-based economies
(British Columbia, Manitoba, Québec,
35 New Brunswick, Nova Scotia,
and Prince Edward Island )
30
25
2001 2004 2007 2009
* The resource-based provinces with more than 30% of GDP from natural resources.
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada.
10 PROSPECTS FOR ONTARIO’S PROSPERITy
13. • In our First Annual Report, we concluded that Ontario was not investing
adequately in post secondary education. In that Report and in our
subsequent work, we recommended that Ontario residents and its governments
invest more in developing our human capital. In 2005, the provincial
government introduced Reaching Higher, a $6.2 billion increase in funding
for post secondary education. These investments in our colleges and
universities created more spaces for our students at undergraduate and gradu
ate levels. We have seen a steady increase in admissions to our colleges and
universities. This fall, enrollments in our universities reached an alltime high
with 90,000 new students. In colleges, most recent data for the years 2009
and 2010 also indicate a record high registration. Given the importance
of post secondary education in strengthening the skills of Ontarians and on
local economic development, these investments will pay off.
• Through much of our work, we have been vociferous critics of our tax system.
Our focus has been on the punishingly high marginal effective tax rates on new
business investment. In our Seventh Annual Report, we observed that Ontario
had the highest rates of taxation on new business investment among developed
economies. Our corporate income tax rates were higher than those of many
of our trade partners; we had an antiquated sales tax that piled tax on top of
tax as businesses invested; and we had a capital tax to punish previous
business investments.
But our governments have been working at improving our tax system. In 2007,
the federal government announced a stepped reduction in federal corporate
income taxes – with rates falling from 22 percent in 2007 to 15 percent in
2012. Federal and provincial governments have eliminated capital taxes in
Ontario. And, best of all, the provincial government converted our retail
sales tax to a value added tax in 2010 and reduced corporate income taxes
here in Ontario.
The net effect is that Ontario’s tax regime has moved from worst among
developed economies to being better than average. Again, we shouldn’t
expect investment to increase dramatically overnight – and the improvements
are not yet fully implemented – but we can now point to our tax system as a
competitive advantage.
• The Task Force has been urging the federal and provincial governments
to expand international trade, an important element for improving our
innovation capabilities. On the one hand, expanded trade means more export
opportunities for Ontario businesses to reach larger markets to supplement our
own, and to help support businesses as they grow and afford the investments
in the innovation necessary to be competitive. Our businesses also benefit from
the pressure exerted by more sophisticated customers from around the world.
11
14. On the other hand, more imports put pressure on our businesses, forcing them
to expand their capabilities to meet new competitive threats. Some of our busi
nesses are stretched too far by this competition and exit, as was the experi
ence observed in Canada after the CanadaUS Free Trade Agreement of 1987.
In the past decade, Canada has negotiated several new bilateral trade deals.
Currently, with the urging of Ontario and Québec, Canada is negotiating a freer
trade deal with the European Union. And we are at the early stages of nego
tiations with India and Brazil. While the US government sends mixed signals
on its desire to expand trade, Canada is openly seeking new trade relations,
and Ontario has been a significant partner with the federal government in this
enlightened stance.
• The Task Force has some accomplishments in ending bad public policy. In
particular, we have been consistent proponents of ending special tax treat
ment for particular kinds of venture capital, namely Labour Sponsored
Investment Funds (LSIFs). Based on the mistaken premise that Ontario’s
innovative startup firms need access to greater quantity of capital, regardless
of its quality, the Funds offered generous tax benefits to individual “retail”
investors. These investors generated a return through RRSP tax breaks.
They were less interested in, and capable of, supporting specific startups with
experience and specialized knowledge – as important to startups as capital.
Because LSIFs did not attract sophisticated investors and suffered from other
design flaws, they did not help raise the quality of venture capital – at great
cost to the taxpayer. In August 2005, the provincial government announced
the end of the special tax benefits for LSIFs by 2012. We encourage the
incoming government to keep their demise on schedule.
These accomplishments are important steps in the right direction. But if
our economy is to reach its full potential for the future prosperity of today’s
Ontarians and our children, we have to step up our innovative capabilities.
More of our businesses have to compete globally on the basis of unique
products, services, and processes.
Our prosperity gap is a productivity gap, and our productivity gap is an
innovation gap. When economists observe that productivity in Canada and
Ontario is lagging, they are seeing the results of a sub-standard innovation
record among our businesses. Improving innovation has to be our priority for
the coming decade.
We urge the new Ontario government to embrace our 2020 Prosperity
Agenda and thus achieve our innovation and prosperity potential.
When the 2021 Annual Report is written, we hope that all Ontarians
will look back on a decade of real accomplishment.
12 PROSPECTS FOR ONTARIO’S PROSPERITy
15. We continue to propose actions
that will help Ontario realize our
2020 Prosperity Agenda.
Exhibit 5 The Task Force has set out a 2020 Prosperity Agenda to narrow our prosperity gap
Goal: Raise innovation,
Looking back Looking forward
productivity, and
prosperity 2001–2011 2011–2020
Prosperity gap Fell to 20th among 28 international Rank as 10th most prosperous
and North American peers among North American and
international peers
Work effort and productivity Worked more but not smarter – Become a global leader in innovation
Ontario is a productivity laggard and productivity
Human capital Increased our investment in education Attain more master’s degrees in our
universities
Improved performance in attainment
of post secondary degrees Strengthen managerial capacity
Progressed little in managerial capacity
Investment Lagged peers’ business investment in Rise to the challenge of globalization
innovative technologies or R&D by businesses investing to raise their
capabilities
Improved tax policy to support
business investment Introduce real innovations in federal
and provincial tax policy
Shifted balance away from education
to health care Ensure deficits are not fought through
severe cuts in education
Support and pressure Completed several small trade deals Focus on large-scale trade deals
Announced end to special tax Pursue policies to enhance venture
treatment for Labour Sponsored capital quality and identify innovation
Investment Funds financing models
13
17. in cArrying out its mAndAtE to along the way add value at every step. and services will increase the GDP of
measure and monitor Ontario’s A sandwich bought in a restaurant a region – and usually earn higher
competitiveness and prosperity, the begins with a farmer sowing and wages and profits for themselves.
Task Force has focused on Gross harvesting grain. Between the farmer
Domestic Product (GDP) per capita as and the consumer are many inte- Innovation is a key to higher value
the summary measure of success. grated steps, where value is added by added. This is true whether it is the
Over the decade, we have concluded intermediaries – both by manufactur- driver in creating better products or
that our performance has lagged that ers, like a bakery, and by service services without increasing costs
of our peers in the United States and providers, like a restaurant. Value faster than prices, or in making
abroad, giving rise to a large and added at each stage is shared production processes leaner without
widening prosperity gap. between the worker and the business lowering quality.
owner – higher value added means
GDP is highly correlated with higher wages and profits – and The advent of globalization has seen
aggregate personal income and this continues until a good or the movement of low value added
wages in an economy. Wage earners service is produced and provided processes to lower wage countries
in Ontario receive about 55 percent of to a final consumer. The total value like China and India. Advanced
total GDP, and wages increase along added throughout the production economies like Ontario will not
with GDP. GDP is also the key driver chain is the sum of each of the thrive by attempting to hang on to
in government revenues, so that individual processes. low value added activities. Rather,
public services can be afforded when they must innovate relentlessly
GDP grows. As we have discussed in Understanding value added is an to deliver higher value added
past reports, our lagging GDP has real important step in addressing innova- products, services, or processes –
negative consequences for average tion and productivity issues. and higher GDP.
Ontarians. Wages, living standards, Companies with higher value added
and public investments are lower processes are likely to produce more 1 Centre for the Study of Living Standards, Does
Money Matter? Determining the Happiness of
than they would be if economic innovative and more complex Canadians, November 2010, updated February
2011, available online: http://www.csls.ca/
performance were comparable to that products – and have higher produc- reports/csls2010-09.pdf
of our peers. tivity. Their products and processes 2 Institute for Competitiveness & Prosperity,
Working Paper 14, Trade, innovation, and
are also more defensible in the global prosperity, September 2010, pp. 3943.
GDP also correlates with personal market place, making the home
happiness as measured across country more competitive. The
countries by organizations industries that were most immune to
like Gallup. Our own work in the overall turndown in manufactur-
collaboration with the Centre for ing between 2002 and 2008 pro-
the Study of Living Standards has duced products with higher value
shown that in Canada personal added and drew on more creative
income is positively correlated with skills in their operations.2
reported happiness.1
Value added also matters to a country
GDP represents the “value added” or region. Essentially a country’s or
to our endowed base of human, region’s GDP is the sum of all the
physical, and natural resources. value added in the economy. People
As products and services are created, and companies that innovate and
different people and organizations produce higher value added products
15
18. four factors measure • Productivity. For each hour worked Profile remains an advantage
ontario’s prosperity gap in a jurisdiction, how much economic for Ontario. The percentage of the
output is created by a jurisdiction’s population that is of working age –
Ontario has a significant prosperity workers? aged 15 to 64 – is the demographic
gap, as measured by GDP per capita. basis for prosperity. With more
Out of sixteen North American The first three factors – profile, people in that age range, a higher
peer jurisdictions, Ontario stands utilization, and intensity – add up to percentage of the population can
fifteenth, and the gap versus the our work effort, or the hours worked work and create economic value.
median has been widening. To under- per capita to create economic value. In Ontario, this ratio has been stable
stand the reasons for this prosperity The fourth factor – productivity – over the short run and has had no
gap, we draw on the same framework measures how effectively we add appreciable impact on changes in
we have used in our previous reports value to resources, thereby creating our prosperity gap versus our peer
to disaggregate GDP per capita into economic value and prosperity. states. Nevertheless, it creates an
four measurable elements (Exhibit 6): ongoing starting advantage in
In 2001, Ontario lagged its North Ontario’s prosperity.
• Profile. Out of all the people in a American peers in both work effort
jurisdiction, what percentage are and productivity. A decade later, In 2010, 69.4 percent of Ontarians
of working age and therefore able Ontario matches peer states in work were aged 15 to 64. Among the
to contribute to the creation of effort but lags more in productivity peer jurisdictions, Ontario and
products and services that add (Exhibit 7). That means our pros- Québec have a higher percentage of
economic value and prosperity? perity gap is now a productivity gap. working age population than the
And, as we’ll see, our productivity fourteen peer states. Relative to the
• Utilization. For all those of working gap is an innovation gap. 67.3 percent median of the sixteen
age, what percentage is actually peer jurisdictions, Ontario has a
working to add to economic value ontario has good work effort 3.0 percent potential profile
and prosperity? performance advantage.3 Holding all other factors
Ontario continues to have a demo- constant, we calculate this advantage
• Intensity. For all those who are graphic profile advantage versus the to be worth $1,800 in per capita GDP.
employed, how many hours do they peer states and Québec, an advan-
spend on the job in a year? tage in utilization, but a significant 3 Calculated as 1 minus [67.3 (Peers)/
69.4 (Ontario)] = 3.0 percent.
intensity gap (Exhibit 8).
Exhibit 6 The Task Force measures four components of prosperity
Prosperity Profile Utilization Intensity Productivity
Potential labour force Employed persons Hours worked GDP
GDP per capita
Population Potential labour force Employed persons Hours worked
• Participation • Industry mix
• Employment • Cluster mix
• Cluster
effectiveness
• Urbanization
• Education
• Capital
investment
• Productivity
residual
Source: Adapted from J. Baldwin, J.P. Maynard and S. Wells, “Productivity Growth in Canada and the United States,” Isuma Vol. 1 No. 1,
Spring 2000, Ottawa Policy Research Institute..
16 PROSPECTS FOR ONTARIO’S PROSPERITy
19. Exhibit 7 Higher productivity is needed to close Ontario’s prosperity gap
Source of Ontario's prosperity gap with North American peers
(C$ 2010)
Work effort (Hours worked per capita)
1,000
North American
peer median
900
Prosperity gap (GDP per capita)
Ontario $60,000 North American
800 peer median
50,000
700
Ontario
1981 1990 2000 2010
40,000
Productivity (GDP per hour worked)
$70 North American
peer median 30,000
60
20,000
50 Ontario
1981 1990 2000 2010
40
30
1981 1990 2000 2010
Note: Currency converted at PPP = 1.203. In 1997 state GDP calculation method changed from SIC-based to NAICS-based.
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada; US Bureau of Economic Analysis; US Bureau of Labor Statistics;
US Census Bureau.
Exhibit 8 Lagging productivity accounts for most of our prosperity gap
Elements of GDP per capita (C$ 2010)
$1,300 $1,200 $1,500
$1,800 $2,000
$54,200
$4,100 $46,500
$6,000
$1,500 $1,200 $1,000
$1,700
Prosperity Gap
$7,700 or 14.2% of
median GDP per capita
Work effort advantage Productivity gap
$200 $7,900
Median GDP Profile Participation Employment Intensity Industry Cluster Cluster Urbanization Education Capital Productivity Ontario's
per capita mix mix effectiveness investment residual current GDP
per capita
(85.8% of
median)
Profile Utilization Intensity Productivity
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada; Ontario Ministry of Finance; Banque de données des
statistiques officielles sur le Québec; US Department of Commerce, Bureau of Economic Analysis; Bureau of Labor Statistics; US Census Bureau.
OUR PROSPERITy GAP IS A PRODUCTIVITy GAP 17
20. Over the last decade, lagging
productivity has accounted for the
greatest share of Ontario’s prosperity
gap with our peers, and in 2010 this
productivity gap widened further.
Demographic projections indicate In the other component of utilization, worked 1,670 hours, while at the
that, as in Québec, the proportion of employment, Ontario has an advan- median of the peer states, the average
Ontarians of working age will decline tage over our US peers – even though employee worked 1,830 hours. This
over the coming decades as baby our own performance has been poor. gap of 160 hours, or 4.3 weeks
boomers retire and are not replaced In 2010, our annual unemployment annually, widened slightly from
by equal numbers in subsequent rate decreased to 7.9 percent, down 2009, when Ontario trailed the peer
generations. Still, the projections from 8.3 percent in 2009.8 This is median by 150 hours weekly or 4.1
indicate that Ontario will maintain lower than the median rate across weeks. In 2010, our intensity gap
its advantage versus its peers.4 peer jurisdictions of 9.8 percent. In equated to $4,100 in GDP per capita.
other words, on average through
Nevertheless, Ontario will have 2010, 92.1 percent of those Ontarians Ontarians’ propensity to take more
fewer workers to create prosperity in participating in the work force had weeks of vacation and to have a
the coming years. We estimate that full-time or part-time work, which higher percentage of part-time work
by 2025 the smaller percentage of was higher than the median perfor- is the key driver of the intensity gap.9
working age Ontarians will reduce mance of the peer jurisdictions, 90.2. Another factor behind the intensity
GDP per capita potential by $2,300.5 This 1.9 percentage point advantage gap is the inability of part-time
We will need creative retirement lifted our relative GDP per capita per- employees to find full-time work.
solutions to address this decline in formance by $1,200 in 2010. This gap is felt most by several
our prosperity potential.6 disadvantaged groups, such as high
In summary, in 2010, Ontario school dropouts and lone parents.
Ontario has higher utilization employed 60.1 percent of its working
than the peer states. Over the age population (the combined effect As we have seen, in the three work
past decade, Ontario has been more of a 65.2 percent participation rate effort factors, Ontario has a profile
successful than our peer states in and a 7.9 percent unemployment advantage, the percentage of our
creating jobs. We perform well in the rate), ranking third among the sixteen population of working age, and a
two factors that make up utilization peer jurisdictions and above the peer utilization advantage, the percentage
– relatively high labour force partici- median of 58.1 percent. This superior of Ontario adults who are working.
pation rates and relatively low performance translates into a $2,500 Still, the intensity gap, our lower
unemployment rates. utilization advantage (the combined
effect of a $1,300 participation 4 Task Force on Competitiveness, Productivity
and Economic Progress, Fourth Annual Report,
We rank fifth among the peer juris- advantage and a $1,200 employment Rebalancing priorities for Ontario’s prosperity,
dictions in workforce participation. In advantage) in GDP per capita. November 2005, p. 29.
5 This comparison is between Ontario’s GDP per
2010, 65.2 percent of Ontarians fifteen capita in 2005 and its potential in 2025; not the
difference between Ontario and its peer group.
years of age and older worked or sought Ontario employees work fewer
6 Institute for Competitiveness & Prosperity,
work.7 The median participation rate hours than their US counter- Working Paper 9, Time on the job, September
2006, p. 21.
was 63.7 percent. The US recession hurt parts – and this intensity gap
7 Statistics Canada reports Ontario’s participation
participation rates, as many workers just remains a significant part of rate to be 67.1 percent; US definitions for who
qualifies for inclusion in the labour force, and
gave up looking for employment – and our prosperity gap. While therefore is included in the participation rate,
were not counted in the participation Ontario has better demographics and differ from Canada’s definitions. We use US
definitions for our calculations of differences
rate. Ontario’s participation rates have creates more jobs, we have a signifi- between Ontario and its US peers.
also fallen during the recession. But we cant intensity gap – our workers are 8 These unemployment rates are based on US
definitions; official Canadian unemployment rates
continue to out perform our peers. In on the job fewer hours in a year than were 8.7 percent in 2010, down from 9 percent
2010, Ontario’s advantage translated their counterparts in the peer states. in 2009.
9 Working Paper 9, Time on the job, pp. 2224.
into $1,300 in GDP per capita. In 2010, the average Ontario worker
18 PROSPECTS FOR ONTARIO’S PROSPERITy
21. number of hours worked per worker, the presence of clustered industries relative employment strength in
continues to be a major factor in our in a region has a positive spillover financial services, automotive, metal
prosperity gap. effect, in that they typically generate manufacturing, publishing and print-
opportunities for increased success of ing, and other industries has created an
The net effect of these factors is a the local economy. attractive mix of clustered industries.
$200 advantage versus the median of Ontario’s cluster mix yields a $1,500
our peer jurisdictions. This relative The other major industry type per capita advantage over our peers.
strength in work effort is overwhelmed, includes dispersed industries, or local
however, by our poor productivity. industries. These industries, such as Cluster under performance is
retailers and restaurants, tend only to a significant part of Ontario’s
higher productivity is serve their local markets and so do productivity gap. While Ontario
needed to close ontario’s not realize economies of scale and are has an excellent industry and cluster
prosperity gap less challenged to be innovative. As a mix, cluster effectiveness, as mea-
Over the last decade, lagging consequence, they have lower rates of sured by wages, is much lower than
productivity has accounted for the productivity, innovation, and wages. that in the peer states. In the same
greatest share of Ontario’s prosperity clusters, wages in Ontario firms are
gap with our peers, and in 2010 this A third industry type, natural lower than those of their counter-
productivity gap widened further. Six endowment industries, is located parts across the peer states.
elements of productivity determine where the natural resources are
the impact of this key driver of our found. These include forestry, Across all clustered industries, the
prosperity gap: mining, and agriculture. These are average wage in Ontario is 14.7
very small industries for both our percent lower than the average in the
• Mix of industries overall peers and Ontario – accounting for median peer state. This lower wage
• Mix of clustered industries less than 1 percent of employment in reflects lower productivity and
• Productivity effectiveness of our Ontario in 2010. innovation in our clustered indus-
clustered industries tries, which in turn reduces economic
• Degree of urbanization Fully 34.1 percent of employment in performance across all industries.
• Educational attainment Ontario is in the 41 clustered indus-
• Capital investment tries versus the median of 27.7 10 See http://data.isc.hbs.edu/isc/cmp_overview.jsp
for a description of the three types of industries.
percent in the peer jurisdictions. We Note: we refer to Porter’s “traded industries” as
“clustered industries” and his “local industries” as
Industry mix contributes estimate the potential productivity “dispersed industries.”
positively to our productivity. benefit from this higher percentage of 11 Institute for Competitiveness & Prosperity,
Working Paper 1, A View of Ontario: Ontario’s
Ontario benefits from a mix of indus- clustered industries in our industry Clusters of Innovation, April 2002, and Working
tries that is more heavily weighted mix contributes $2,000 per capita. Paper 5, Strengthening structures: Upgrading
specialized support and competitive pressure,
toward clustered industries,10 and This benefit is derived from a higher July 2004.
within these clustered industries, we output than should be achieved from 12 It is important to note that our measure focuses
on the mix of industries only. It calculates the
have a mix that is more favourable for a better industry mix.12 productivity performance we could expect in
productivity and prosperity than that Canada if each cluster were as productive as
its US counterpart. It does not measure the
in the peer states.11 The geographic Within clustered industries, effectiveness of our industries in Canada.
clustering of firms in the same and Ontario has a beneficial mix.
related industries increases productiv- Some of the 41 clustered industries
ity and innovation. These clustered contribute more to productivity and
industries typically sell to markets innovation than others – so the mix of
beyond their local region. In addition, clustered industries matters. Ontario’s
OUR PROSPERITy GAP IS A PRODUCTIVITy GAP 19
22. As we discuss in our review of Relatively low urbanization is a productivity would be higher by $1,200
Ontario’s innovation results, Michael significant contributor to our per capita. As we shall see, Ontario has
Porter has observed that specialized productivity and prosperity narrowed this educational attainment
support from excellent factor condi- gap. Urban centres lead to higher gap over the last decade; when updated
tions, capable suppliers, and related productivity as a result of the educational attainment and wage
industries pushes innovation higher increased social and economic information is available from the
in traded clusters. At the same time, interaction of people in firms in latest census, we expect this disad-
more competitive pressure from metropolitan areas, the cost advan- vantage in GDP per capita to shrink.
sophisticated customers and vigorous tages of larger scale markets, and a
rivals drives innovation. As we have more diversified pool of skilled Lower capital investment
discussed in the past,13 our structures labour. The interplay of these factors reduces productivity. Ontario
of specialized support and competi- promotes innovation and growth in businesses have under invested in
tive pressure are inadequate relative an economy. machinery, equipment, and software
to the experience in clusters of traded relative to their counterparts in the
industries in the peer states. In other Since fewer people live in metro- United States, so that the capital base
research, we have found that Ontario’s politan areas in Ontario than in the that supports workers in Ontario is
clustered industries draw less on peer states, our relative productivity not as modern as that of their
workers in creativity-oriented and prosperity potential are lower. counterparts in the peer states.18 As a
occupations than their counterparts Our analysis this year indicates that result, Ontario workers are not as
in the peer states.14 Another source of we have a $1,500 per capita dis- productive. This under investment in
clustered industries’ under perform- advantage against the peer median capital equipment lowers Ontario’s
ance is the smaller scale of operations that is related to our lower level of productivity by $1,000 per capita,
in our manufacturing facilities. (See urbanization. based on our simulation of Ontario’s
Our manufacturers need to increase GDP if our economy had matched the
the scale of their operations.) Lower educational attainment rate at which the US private sector
weakens our productivity.
If Ontario clusters were as effective Economists agree that a better 13 Task Force on Competitiveness, Productivity
and Economic Progress, Third Annual Report,
as US clusters, wages would be educated workforce will be more Realizing our prosperity potential,
November 2004, pp. 4048.
$14,000 per worker higher. As productive. Education increases
14 Idem. Eighth Annual Report, Navigating through
clustered industries account for 34.1 workers’ base level of knowledge and the recovery, November 2009, pp. 2729.
percent of Ontario employment and increases the flexibility necessary for 15 We have netted out the effects of Ontario’s lower
urbanization, our under investment in capital, and our
given the relationship between wages improved job performance and lower educational attainment in this calculation.
and productivity, our overall produc- ongoing skills gains. Many studies 16 For example, see Ana W. Ferrer and W. Craig
Riddell, “The Role of Credentials in the Canadian
tivity would rise by 14.3 percent.15 show that increased wages accrue to Labour Market,” Canadian Journal of Economics,
2002, Vol. 35, No. 4; Statistics Canada,
From this, we estimate the productivity more highly educated individuals.16 “Education and earnings,” Perspectives on Labour
loss from the lower effectiveness of And higher wages are the result of and Income, 2006, Vol. 38, No. 3; and Anil Verma,
“Low Wage Service Workers” A Profile,” Working
our clusters to be $6,000 per capita. higher productivity.17 Ontario’s Paper Series: Ontario in the Creative Age, Martin
Prosperity Institute, March 2009.
population has, on average, a lower
17 Task Force on Competitiveness, Productivity and
Adding together the effects of level of educational attainment than Economic Progress, Sixth Annual Report, Path to
the 2020 Prosperity Agenda, November 2007,
industry mix (+$2,000), cluster mix those living in the United States, p. 30.
(+$1,500), and effectiveness Adjusting the mix of educational 18 Capital investment results are not available at
the sate level. Our analysis uses US results to
(-$6,000) Ontario’s clustered indus- attainment in Ontario to match the estimate peer state investments and compares
tries provide a net loss of $2,500 in US mix and holding wages constant these to Ontario.
GDP per capita versus the peer states. at each attainment level, Ontario’s
20 PROSPECTS FOR ONTARIO’S PROSPERITy
23. our manufacturers need to increase
the scale of their operations
Ontario manufacturers need to increase the size of their operations,
because larger facilities have more investment in technology, are
more likely to support R&D investments, and are more productive.
Research by the George Morris Centre and the Institute for food industry, our processors tend to be much smaller. From
Competitiveness & Prosperity shows that our food process a public policy perspective, infrastructure investments, such
ing industry could increase its productivity with bigger facil as those in border crossings are required. And, despite
ities. Food processors whose size, as defined by sales per CanadaUS free trade, the border still matters. Food
establishment, puts them in the top quartile create twice as processors looking to expand production in sectors like dairy
much value added per employee as the average sized facility and poultry are challenged to secure access to producers
(Exhibit A). with adequate quota volumes. So we also need to take a
To improve the productivity and innovation in manufactur hard look at our supply management policies in agriculture,
ing in general – and food processing in particular – our and the unintended effects these policies may have on
businesses need to explore consolidation opportunities and manufacturing industries.
strategies for serving larger markets. Compared with the US
Exhibit A Larger food processing facilities are more productive
Value added per employee
2004–2008
$000/
employee
$120
Largest facilities
(top quartile by
employment)
90
60
Mid-sized facilities
(2nd and 3rd quartiles)
30
Smallest facilities
(bottom quartile)
0
2004 2005 2006 2007 2008
Source: Institute for Competitiveness & Prosperity and George Morris Centre analysis based on Statistics Canada special tabulation of data from Annual
Survey of Manufactures.
OUR PROSPERITy GAP IS A PRODUCTIVITy GAP 21
24. invested in machinery, equipment, It is difficult to project what will Our current challenge is to recover
and software. An important part of happen in this unusual downturn – from the recession and to build
this capital investment gap is in it is quite likely that official data will our full prosperity potential for the
purchases of information and be revised. But our productivity benefit of all Ontarians. But for
communications technology (ICT). weakness is real and getting worse the long term, higher productivity
(see Exhibit 3), widening our is critical to our success. And
The residual is related to prosperity gap. Sluggish productivity improving our productivity
productivity. We have been able to growth is a critical reason we are means improving our innovation
account for the impact of profile, not realizing our prosperity performance.
utilization, and intensity on prosper- potential. And, as we broaden our
ity. We have also accounted for the perspective beyond North America, 19 Task Force on Competitiveness, Productivity and
Economic Progress, Ninth Annual Report, Today’s
effects of several elements of pro- we see that Ontario’s productivity innovation tomorrow’s prosperity, November
ductivity. The $1,700 per capita gap lags globally as well. 2010, pp. 2728.
that remains is related to productivity
on the basis of like-to-like industry Ontarians have built one of the most
mix and strength, urbanization, globally competitive jurisdictions.
education, and capital intensity. Ontario’s prosperity compares
favourably with that in thirteen
Productivity deficit international peer regions – selected
is worsening using similar criteria for identifying
North American peers.19 Ontario
Through most of the 1980s, Ontario’s stood sixth in GDP per capita in 2010
prosperity was close to the median of (see Exhibit 1). However, just as we
the peer states. During that period, have found in comparisons with
we had a productivity and intensity North American peers, we trail the
disadvantage versus our peers – but median of our international peers in
our utilization advantage compen- productivity (see Exhibit 14). We
sated for this. Our prosperity gap work more than those outside North
began to develop at the outset of the America, but we are less successful at
1990–92 recession, driven mostly by adding economic value in the hours
our worsening participation and we work. These international com-
unemployment rates. parisons again indicate that lagging
productivity remains Ontario’s
This utilization problem began to problem to solve.
dissipate around 1997, and by 2001 it
was an advantage again. However,
our productivity disadvantage began
to grow in 1995, and by 2005 it had
more than doubled. In the current
economic downturn, work effort has
fallen off much more in the peer
states than in Ontario, while produc-
tivity has grown faster than Ontario’s.
22 PROSPECTS FOR ONTARIO’S PROSPERITy
27. As wE dElivEr our tEnth AnnuAl rEport to the public of Ontario, we
consider progress and accomplishments in several areas. Overall, we have to
be disappointed in the lack of progress of our competitiveness and prosper-
ity. As we have shown, Ontario trails our North American peers significantly
in GDP per capita and this gap has widened through the decade. Against our
international peers, we continue to out perform, but our lead is shrinking. To
understand what has happened and offer an outlook for the future, we look at
four major factors in our prosperity performance.
• We begin by detailing our progress in the two key drivers of prosperity –
work effort and productivity. In both North American and international
comparisons, Ontario performs very well in work effort – we excel at creating
jobs for our people. But we trail both sets of counterparts in productivity.
Productivity measures our ability to develop innovative processes and to
create and market new products and services. We are laggards among our
peers, and the gap is widening.
As we look back and look ahead, we focus on the various elements that
affect our innovation and productivity:
• We examine progress in building the capabilities of our human capital,
assessing them overall and among managers. We also review our progress in
reducing poverty
• We assess the extent to which we have made investments in our people and
businesses to achieve greater productivity and innovation
• We review important parts of the support and pressure in our economy that
lead to more innovation.
As we review progress on our 2020 Prosperity Agenda, it is clear that
there is no one magic solution hiding in the following pages – no silver
bullet that will single handedly close our prosperity gap. Rather, we have
work to do in many areas – from investing in our people, to developing
innovative business strategies, to tax reform, and to expanded
international trade. So long as our political and business leaders and
all Ontarians have a determination to achieve our full prosperity
potential and to work together on many fronts, we are confident in
our outlook for Ontario.
25
28. what haPPened
in ontario in the
Past decade?
Work effort and
productivity
Human capital
Federal GST reduced
from 7% to 6%
investment
Minimum wage
pressure and increases begin
support
Ontario: A Leader in Learning
(Rae Report) released Provincial Capital
Tax for manufactur-
ing and resource
Post secondary activities ends
tuition freeze Reaching Higher
launched
2002 2003 2004 2005 2006 2007
Recession ends New rules on over-
time and work week
Federal
Working
TSX low Highest Post secondary Income Tax
5,695 participation rate 68.7% tuition freeze ends Benefit (WITB)
introduced
New Canada Health Transfer
and Canada Social Transfer
Block Grants announced
Lowest School atten-
unemployment rate dance to age 18
5.9% made mandatory
Mandatory
retirement ends
26 PROSPECTS FOR ONTARIO’S PROSPERITy
29. Internationally Educated
Engineers Qualification
Bridging Program launched
Nortel bankruptcy
Ontario Cabinet
Committee on Poverty Green Energy Act passed
Reduction established
Canada-EU trade
Staged federal negotiations begin
corporate tax
reductions begin from
22% to 15% in 2012 Ontario manufacturing
employment low
770,000
Putting Students First announced
US recession Lowest
begins participation rate 66.7%
2008 2009 2010 2011 2012
Federal GST
reduced
from 6% Student
to 5% financial aid
improvements
announced
TSX high Provincial Capital R&D review
15,073 Tax completely panel report released
eliminated
HST begins
Compete
to Win
(Wilson Panel)
released
Highest
unemployment rate
9.4%
Canadian dollar high $1.08
Staged provincial corporate
tax reductions begin
from 14% to 10% in 2013
27
30. work effort and
Productivity
Ontario’s prosperity growth needs to come
from productivity growth
two FActors drivE ontArio’s prospErity:
• Work effort, how much work Ontarians are doing, expressed
in hours worked per capita, and
• Productivity, how much value we create when working,
expressed as GDP per hour worked.
Ontarians excel in the first factor – generating work hours per capita.
We start with an excellent demographic base, as the percentage of our
population that is of working age is the highest among our peers. We are
very successful in creating jobs for our working age population, and each
worker works more hours than our counterparts outside of North America,
although we trail US workers. The net effect is that Ontarians are among
world leaders in work effort.
Our prosperity challenge is driven by the second factor, our trailing
productivity. It is the major factor behind our prosperity gap. Productivity
growth comes from finding smarter ways to compete – through new operating
efficiencies and new products and services. That means that innovation and
productivity performance are nearly synonymous – and are the keys to our
future prosperity
Productivity growth has no limits. Our work effort may become constrained
over time by our demographics. But our ability to become more productive
and prosperous will depend on translating our imagination and ingenuity into
economic competitiveness and success in the global economy.
28 PROSPECTS FOR ONTARIO’S PROSPERITy
31. ontario’s demographics are an advantage
Exhibit 9 Ontario has a demographic advantage over our peers
prOfile: a lOOK aHead
Percent of population aged 15 to 64
2001–2010 2010 2020
70%
Ontario
69.4
OntariO
North American
68
peer median
67.3
66
International
65.9
69.4 % 66.1 %
peer median
nOrtH american peer median
64
62
67.3 % 64.4 %
2001 2004 2007 2010
internatiOnal peer median
Note: Projections are based on medium growth assumptions. Due to limited data, national profile projections are used
for Kinki and Kanto (Japan), and Rhône-Alpes (France).
65.9 % 64.3 %
Source: Institute for Competitiveness & Prosperity analysis based on data from Statistics Canada; US Census
Bureau; Australian Bureau of Statistics; Statistics Belgium; Institut national de la statistique et des études
économiques; L'Istituto Nazionale di Statistica; Instituto Nacional de Estadística; UK Office for National Statistics;
Statistisches Bundesamt Deutschland; Japan National Institute of Population and Social Security Research.
why profile matters how ontario performs The projections also point to the
Profile is the starting point in Ontario has a very advantageous importance of enabling our older
determining our prosperity potential. demographic profile (Exhibit 9). We workers to stay in the labour force
Demographic “profile” refers to the have a higher percentage of our popu longer – if they wish. We will benefit
percentage of the population that is of lation between the ages of 15 and 64 from more workers, and we are at
working age. Currently defined as than all our North American and inter the point where older workers are
between ages 15 and 64, it is clear national peers. more active and healthier than in
that the upper age limit will likely rise the past. We need their experience
as life expectancy increases and outlook for 2020 and judgment.
options for later retirement expand. On this factor, we can predict with
To the extent that a society has more much more safety how the next few
working age people, it also has more decades will turn out, as the key
“human capital” able to contribute to variables – current age distribution,
prosperity through work and support mortality rates, and fertility rates –
activities. Here in North America, we are either set or change very slowly.
take this factor for granted, as we have Based on projections done by
benefited from the baby boomers being Statistics Canada, we show that
of working age. However, countries Ontario’s demographic profile will
like Japan and those in continental worsen as the percentage of our
Europe are feeling the effects of an population that is of working age turns
aging population – with fewer young down. On the positive side, we will not
people available to work and more be disadvantaged as a result of this,
elderly people requiring social and because other jurisdictions will fare
health care assistance. worse than us.
Immigration has and will continue to
benefit our demographic profile. But we
need to make sure that we do a better
job of integrating new arrivals into our
economic mainstream.
WORk EFFORT AND PRODUCTIVITy 29