Deloitte's Chief Innovation Officer, Terry Stuart, presented The Future of Productivity: Clear choices for a competitive Canada, at the Halifax State of the Economy Conference on May 22, 2013. What is driving Canada's poor productivity performance? Why is the productivity gap between Canada and other countries so big? How can Canada prevent its "gazelle" firms from turning into "water buffaloes"? How can we drive growth and competitiveness to ensure a prosperous future? Terry also highlighted key recommendations for companies, government, and academia on how to improve Canadian productivity by innovating.

1. The future of productivity
The innovator’s time is now
May 22nd, 2013

2. © Deloitte LLP and affiliated entities.
Future of Productivity

3. © Deloitte LLP and affiliated entities.
Productivity is the most significant threat to Canada’s
standard of living
Employment rate
% of total population
that is employed
Hours
Worker
Output
Hour
GDP
Population
X Work effort X Productivity = Standard of living
Sources: Centre for the Study of Living Standards, OECD
2010
$59.28
$46.21
2010
$59.28
$46.21
$13/hr

4. © Deloitte LLP and affiliated entities.
Canada’s economic composition by size and sector is
not a key driver of slow productivity growth
Source: Statistics Canada, Industry Canada, U.S. Bureau of Labor Statistics, Deloitte Analysis
Size doesn’t matter Contribution to Canada–U.S. productivity gap 2009
U.S.
Canada
$59.28
$46.21
Impact of productivity within each
firm size (98% of productivity gap)
$12.81
Impact of firm size distribution
(2% of productivity gap)
$0.26

5. © Deloitte LLP and affiliated entities.
Canada’s economic composition by size and sector is
not a key driver of slow productivity growth
Source: Statistics Canada, Industry Canada, U.S. Bureau of Labor Statistics, Deloitte Analysis
Canada–U.S. productivity growth gap 1987-2008
U.S.
Canada
1.88%
1.04%
Sector composition
doesn’t matter either
Size doesn’t matter
In-sector productivity 88.3%
Sector composition 5.4%
Residual 6.3%

6. © Deloitte LLP and affiliated entities.
Growth is the deceptively simple solution to productivity
– but Canadian firms find growth hard to sustain
Growth in services firms, 2005-2007
Young firms (<5 years old)
Percentage of high growth firms by country
0.15%
$0.41%
0.54%0.54% 0.57%
0.64%
0.41%
Note: High growth firms are defined as firms with 20%+ annualized employment growth over a 3 year period. Scope of firms is limited to
those with 10-250 employees with $30K-$50M revenues in the first year of the period. Similar trend is observed in manufacturing firms.
U.S.Norway
(2006)
SwedenIsrael
(2008)
Canada Netherlands Spain

7. © Deloitte LLP and affiliated entities.
4.5%
4.9%
5.4%
2.6%
3.7%
4.0%
2.7%
Growth is the deceptively simple solution to productivity
– but Canadian firms find growth hard to sustain
Growth in services firms, 2005-2007
Mature firms (>5 years old)
Percentage of high growth firms by country
U.S.Norway
(2006)
SwedenIsrael
(2008)
Canada Netherlands Spain
Note: High growth firms are defined as firms with 20%+ annualized employment growth over a 3 year period. Scope of firms is limited to
those with 10-250 employees with $30K-$50M revenues in the first year of the period. Similar trend is observed in manufacturing firms.

8. © Deloitte LLP and affiliated entities.
Canadian businesses lose momentum for multiple reasons
Low risk
tolerance
Low
competitive
intensity
Poor trade
activity
Weak
investment

9. © Deloitte LLP and affiliated entities.
Canadian businesses lose momentum for multiple reasons
A national strategy for global
competitiveness is imperative to
solve Canada’s productivity challenge

10. © Deloitte LLP and affiliated entities.
“The future of productivity: clear choices for a competitive Canada”
report presents specific, detailed recommendations to reset
Canada’s productivity trajectory
Businesses Government
Academia
CurriculumCommercialize
Trade
Immigration
Growth
FDI
Decision-making
Reinvention
Clusters
Investment
Talent
Trade

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lululemon
Innovation with customers – Living design thinking

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Canada Goose
Extreme Canadian manufacturing
Go to "Insert" tab in Ribbon to insert Header & Footer

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Venmar
Breathing easy through innovation

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Recon
Bringing information to people when they need it

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Recon
Continuing to deliver innovation

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Ocean Nutrition Canada
Homegrown innovation – Healthier world

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BlueLight Analytics
Taking university IP to the market

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The time to act on innovation is now
Connect with
Canadian
incubators and
accelerators

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The time to act on innovation is now
Support
entrepreneurship
and innovation
in Canada’s
educational
system

20. © Deloitte LLP and affiliated entities.
The time to act on innovation is now
Take a fresh
approach to
product and service
development
explore
“Design
Thinking”

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The time to act on innovation is now
Build out
your
innovation
ecosystem

22. © Deloitte LLP and affiliated entities.
The time to act on innovation is now
Actively
manage your
innovation
program

23. © Deloitte LLP and affiliated entities.
Terry Stuart
Chief Innovation Officer
Deloitte Canada
testuart@deloitte.ca

24. © Deloitte LLP and affiliated entities.
Let’s discuss
What challenges/barriers does
your organization face when
developing an innovation culture?
What are actions you, as a
business leader, can take to
promote an innovation culture in
your organization and in our
community?
What are our future opportunities
for developing an innovation
culture in our community –
collaboration, working with
universities, etc.?
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