Canadian technology, entertainment and communications companies need to step up their innovation game, both in enthusiasm and willingness to spend money. That’s what a new study from PricewaterhouseCooper is saying.
According to PwC’s Global Innovation Survey, while nearly nine in ten Canadian companies in these sectors are aiming for at least moderate growth over the next five years, only 27 percent have an “eager appetite” for innovation. That number sits slightly above the global average at 21 percent, but competitors worldwide are still spending more. Canadian businesses are allocating just 7.8 percent of their revenue ($21 million) to innovation, compared to 10.38 percent ($111 million) in the UK and 9.64 percent ($200 million) globally.
In fact, Canadian businesses are far more likely to rely on the government to fund the innovation programs they do initiate, with half of the respondents in these categories relying on federal and provincial incentives.
“In Canada and worldwide, enthusiasm for innovation is low—and this is reflected in how much is spent on these initiatives,” said PwC’s Darren Henderson. “Part of the issue, however, is in the lack of frameworks and processes needed to build an innovative culture. Building the necessary structures starts at the top, but everyone in an organization has a role to play in bringing new ideas and creative thinking to the table.”
What’s worse, while Canadian companies are more likely than their global counterparts to think that having innovation structures is important, they’re less likely to actually have them in place.
But PwC’s results found that while Canadian companies might not be as enthusiastic about spending on innovation, they do know what they want to invest in: products. 35 percent of businesses said this was a high priority—well ahead of customer experience (8 percent) and business models (4 percent). Both the US and the UK also list products among their top areas to innovate.
“Companies need to set themselves apart, and these results show that to do this, businesses feel that product innovation is the way to go,” said Henderson. “Product innovation is a key growth driver, but innovation is a total package, and one that is essential to the success of industries like these that thrive on new ideas. An eye to innovation is crucial and means looking at everything from the business model to the customer experience to the corporate culture.”