Canada’s risk aversion causing country’s innovation paradox

Canada’s performance in matters of innovation is slipping relative to peer nations, the country’s risk-adverse innovation culture being a primary driver, according to a new report from the Conference Board, the 2024 Innovation Report Card: Benchmarking Canada’s Innovation Performance.

“Innovation is one of the most important drivers of economic growth in advanced economies. History tells us that a high standard of living is unsustainable in the long-term when a country has a low innovation rate,” the report warns. “Canada has lost its way regarding innovation.” 

Ranking 15th in a list of 20 countries, they say Canada’s information paradox – that is that the country has a highly educated workforce and strong research capacity but consistently lacks commercial success and innovation-driven economic growth – is greater than ever. “The country does relatively well at building its innovation capacity but fails to keep up with peers in innovation activity or see innovation-based economic results,” they write. 

Cultural fear of failure 

They add that Canada is a risk-adverse innovation nation. “Overcoming our country’s pervasive fear of failure and low levels of business research and development will allow us to tap into the nation’s thriving entrepreneurial spirit,” they state. They add that Canada is second only to China for the cultural fear of failure. “A high proportion of adults believe there are startup opportunities, and they have the necessary entrepreneurial skills, but nearly half of these individuals are deterred from taking action by a fear of failure.”

The report also looks at chronically declining levels of research and development, robotics in manufacturing, intellectual property issues and the country’s poor patent performance, scientific article output and venture capital. It recommends adopting new technologies to improve productivity and recommends the country focus on intellectual property issues and research and development.

“Encourage the creation of new businesses by lowering risk and providing deep support for innovators to introduce new and improved products and services,” they recommend. “Amplify and celebrate innovation success stories to foster a culture of achievement and inspire promising innovators.”