There are a few key considerations related specifically to Canada that are also important macro-economic conditions related to BERD:
1) The manufacturing sector in Canada has been in decline or stagnant for a decade.
2) Most knowledge-based BERD spend is related to the manufacturing sector.
3) The manufacturing sector was 80% of total exports in 2003 and is 70% of total exports today.
4) The absolute value of manufacturing exports has not recovered to 2003 levels.
Looking at OECD Business R&D and Innovation metrics, Canada’s spending on Business R&D is well below the median; however, the triadic patent rate for business is above the median which would tend to indicate Canadian business (particularly the small businesses not in the top 500) are more innovative (spend less, produce more).
Another consideration is that industry financed public R&D is above the median as per the OECD chart below. Is industry financed public R&D counted as GERD, HERD, or BERD?
Canadian SMEs are very innovative, with lower levels of BERD spending per capita yet more production of triadic patents. Canadian SMEs are forced to be innovative due to a general lack of working capital available to new and high risk self-funded companies. Canadian Businesses also produce trademark rates on top of the OECD countries’ median which may indicate a more rapid shift toward IP and knowledge-based industries.
1) BERD spending has changed dramatically and Canadian measurements are not keeping pace.
2) Out of necessity, Canadian SMEs are very innovative.
Next post in this series will be conclusions, recommendations and framework for establishing an integrated innovation ecosystem.