Canada's Competitiveness is Slipping - We need better Innovation and Technological Literacy

Canada’s Global Competitiveness ranking down one spot to 10th

World Economic Forum rankings indicate little change in the relative standing of Canada's economic environment and business sophistication. says Institute for Competitiveness & Prosperity.

Toronto— In the Global Competitiveness Report 2010-2011 released today by the World Economic Forum, whose Canadian partner is the Institute for Competitiveness & Prosperity, Canada’s ranking moved down from 9th in 2009 to 10th in 2010, but remained above its rank of 13th in 2007 on the Forum’s “Global Competitiveness Index.”

“These annual reports help Canadians determine trends in the competitiveness of our economy versus our global competitors,” said Jim Milway, Executive Director of the Institute for Competitiveness & Prosperity. “Canada continues to be one of the top ten globally competitive economies.”
The Global Competitiveness Index provides an overview of factors that are critical to sustainable growth in productivity and competitiveness.  It consists of three sub-indices which measure the quality of each country’s “basic requirements”, “efficiency enhancers”, and “innovation factors”.

The first sub-index, basic requirements, measures the capacity of the economy’s public and private institutions, infrastructure, macroeconomic stability, health, and primary education.  Here, Canada fell to 11th in 2010 from 10th in 2009.  One bright spot in this area is that Canada’s relative standing in areas like investor protection and auditing standards improved.

The second sub-index, efficiency enhancers, measures the impact on global competitiveness of higher education and training, market efficiency, and technological readiness.  Canada’s rank was an impressive 6th but down from last year’s 4th position.  Factors of strength in this sub-index include the quality of our higher education and training and the sophistication of our financial markets.  As part of this sub-index, we also see the perception of Canada’s “soundness of banks” holding its position as number one globally.

On the third sub-index, innovation factors, which measures business sophistication and innovation, Canada’s ranking fell two spots from 12th in 2009 to 14th in 2010.  As Milway observed, “Here is Canada’s improvement opportunity.  The World Economic Forum notes that Canada is still at a disadvantage in company spending on R&D, competing on cost and natural resource access rather than uniqueness, and benefiting from sophisticated technology acquisition by our governments”.

Outside Canada, this year’s Global Competitiveness Index sees the United States falling further in the rankings from 1st in 2008 to 2nd in 2009, and to 4th this year due to the weakening of macroeconomic stability and trust in its public and private institutions. Switzerland continues in 1st place, Sweden moves up two spots to 2nd, and Singapore holds on to its 3rd place ranking.