According to a new report from the The Conference Board of Canada’s Centre for Business Innovation, Canadian firms are most likely to utilize the least successful innovation strategies. The report, titled The State of Firm-Level Innovation in Canada, is based on a 2012 survey and is the one of three reports analysing the manner in which firms strategize, plan, and manage innovation.
Based on over 630 responses, the Centre for Business Innovation’s study found that only about one-sixth of Canadian firms adopt an innovation strategy that focuses on competing in international markets. According to CBI, most Canadian firms prefer to operate inside provincial, national, or even North American borders. This is despite the fact that Canadian companies focusing on expansions into markets outside of North America (and employing innovation efforts that match those goals) enjoy the best bottom-line results. Just 14 percent of respondents listed territorial expansion as the focus of their innovation strategy.
So, what is driving innovation at Canadian companies? More than half of the companies surveyed operate on a user needs-driven innovation strategy based on what their customers need. About one-third of the companies said they use a technology-driven innovation strategy that involves exploiting technological advances to get a leg up on the competition.
Interestingly, companies participating in the survey listed funding as one of the challenges for firm-level innovation. The most common source of funds is internal cash, with government funding coming in second, and firms that do look to territorial expansion as a focus for innovation strategy use less government funding or private equity than firms with other innovation strategies.