R&D and Innovation in Services in Canada

Transcription

1 Economic Research and Policy Analysis Branch R&D and Innovation in Services in Canada Pierre Therrien Industry Canada* March 2012 * The views and opinions expressed herein are not purported to be those of Industry Canada or the Government of Canada.

2 Canada R&D in services catching up with R&D in manufacturing TOTAL BERD Manufacturing Services Source Statistics Canada 1

3 Rising R&D in Services: Who s the culprit? Overall R&D annual rate of growth between : 4.2% (6% in Services), Selected services with rate of growth higher than overall rate of growth in Services: Scientific R&D Services: rate of growth of 15% (account now for 25% of RD in Services) Wholesale Trade : rate of growth of 7% (account now for 19% of RD in Services) Information & cultural : rate of growth of 7% (account now for 18% of RD in Services) Computer system/design: rate of growth of 5% (account now for 17% of RD in Services) This begs the question: How much growth in Service R&D from organic growth or change in the firm s mission (e.g. IBM) vs. industrial reclassification? [..T]hese enterprises can move among pharmaceutical and medicine manufacturing (NAICS ); pharmaceutical and pharmacy supplies wholesaler-distributors (NAICS ), and scientific R&D services in the physical, engineering and life sciences (NAICS ). (Statistics Canada, Industrial R&D: Intention 2010) 2

4 Innovation in Services: comparing 1996 and 2009 Innovation Survey 1996: 2 sub-sectors that could be IMPERFECTLY compared with 2009 Survey of Innovation and Business Strategy (SIBS) Communication: around 60% (1996) vs. 73% (2009) Financial Services: around 65% (1996) vs. 68% (2009) Comparison not perfect (1996 based 3 types of innovation; 2009 on 4 types; not exactly same industry coverage, etc) but 1. Service sector was and still is highly innovative 2. From above, it is not clear that the service sector is more innovative in 2009 than it was in even with increased R&D 2009 SIBS: incidence of innovation in services industries: 64% compared to 67% (all covered industries) and 81% (manufacturing) 3

5 Innovation in Services: complementarity with other activities Complementarity between innovation and business activities in selected services industries* in % of Process, product or organizational Innovators Process innovation Product innovation Organizational innovation Marketing activities Operational activities Organizational activities * Selected service industries include: wholesale trade; transportation and warehousing; information and cultural industries; finance and insurance; professional, scientific and technical services; management of companies and enterprises; and administrative and support, waste management and remediation services. Source: Survey of Innovation and Business Strategy,

6 Innovation in Services: Quality (novelty) of innovation similar to manufacturing 5

7 Blurred line between good and service innovation Manufacturing firms are innovating in goods and services And same for firms in services Type of product innovations introduced by enterprises in % of enterprises Innovation service Innovation goods Source: Survey of Innovation and Business Strategy, 2009 Questions/Comments: Is the distinction between manufacturing and service is still important? Or focus on business service activities... 6

8 Tools to support innovation: Overall picture Source: OECD STI Scoreboard

9 Tools to support innovation: Distribution by sectors Goods Industries Sectoral Distribution of Direct and Indirect Expenditure Sector Direct ( ) R&D Tax Credit (2007) BERD (2007) Agriculture, Forestry, Fishing and Hunting 9.8% 1.4% 1.0% Manufacturing a 52.7% 44.5% 49.2% Construction 2.3% 1.1% 0.6% Utilities 3.1% 0.3% 1.6% Oil and Gas and Mining b 3.8% 8.7% 5.3% Subtotal goods industries 71.7% 55.8% 57.7% Services Industries Transportation and Warehousing 0.8% 0.7% 0.4% Information and Cultural Industries 4.9% 11.2% 8.8% Wholesale Trade 1.0% 0.1% 5.9% Retail Trade 0.7% 0.6% 0.3% Finance and Insurance, Real Estate and Rental and Leasing 0.1% 2.0% 2.7% Professional, Scientific and Technical Services 11.6% 23.6% 18.7% Other Services 8.0% 5.7% 5.4% Subtotal services industries 27.0% 44.0% 42.3% Unclassified 1.2% 0.2% 0.0% ECONOMIC Total all RESEARCH industries AND POLICY ANALYSIS BRANCH100.0% 100.0% 100.0% Source: Innovation Canada: A Call to Action, Review of Federal Support to R&D Expert Panel Report (2011). 8

10 Tools to support innovation: SIBS show higher incidence to use program programs by manufacturing firms Use of government support programs for innovation related activities in % of enterprises Source: Survey of Innovation and Business Strategy,

11 Tools to support innovation: Program design Most R&D-I programs available for both manufacturing and service sectors but mainly based on the manufacturing model of innovation (To my knowledge) No R&D-I program focussing on service sector In 2007-S&T Strategy or 2011-Report on Federal Support to R&D No special mention of any specificity of the innovation process (and therefore specific program) in services However, some programs might help more specifically firms in services (or business service activities): Technology adoption (Digital Technology Adoption Pilot Program-DTAPP) Loan to firms with high intangibles but lacking collaterals (Bank Development Canada) Questions/comment The Minister of Finance is confronted with funding two programs, one supporting R&D- I in manufacturing; another supporting R&D-I in services What is your selling pitch for the R&D-I service support? not easy to export; not easily patentable easier to imitate; Integration of both programs through business service activities? 10

12 THANK YOU Comments? 11