Survey of Innovation and Business Strategy, 2015 to 2017

Released: 2018-12-19

Large enterprises are most likely to co-operate with other organizations on innovation activities

Innovation is the introduction of new or improved products or operational methods by enterprises. When innovating, enterprises can benefit from co-operation partnerships—the active participation in joint innovation projects with other organizations—which allow them to access knowledge and technologies from other organizations.

From 2015 to 2017, 17.4% of Canadian enterprises engaged in co-operation partnerships in order to foster their innovation activities.

Larger Canadian firms, those with 250-plus employees, were more likely than their smaller counterparts to co-operate with other organizations to develop or implement innovations.

While just over one-quarter of larger enterprises (26.9%) co-operated on innovation, for smaller firms—those with less than 100 employees—that figure was 16.4%. As well, co-operation was more widespread in Central Canada (20.5% in Quebec and 18.7% in Ontario) than in Atlantic Canada (15.1%) or the rest of Canada (13.6%).

Chart 1 
Enterprises that co-operated with partners on innovation activities, by region, 2015 to 2017

The private sector was the predominant partner of choice for innovation co-operation activities. Suppliers of equipment, materials, components or software were the most frequently reported innovation partners (57.7%), followed by parent, affiliated or subsidiary businesses (36.9%) and clients or customers in the private sector (34.2%).

Universities, colleges or other higher education institutions were the most common partners outside the private sector at 18.6%.

Chart 2 
Types of innovation co-operation partners, 2015 to 2017

Enterprises were most likely to engage with suppliers and parent, affiliated or subsidiary businesses in joint innovation projects.

The exception was for the professional, scientific and technical services sector. Typically, enterprises in this sector provide specialized services to other businesses. As a result, 42.6% of them reported co-operating with clients or customers from the private sector. Businesses in the sector were also the most likely to identify universities or other higher educational institutions (9.6%) as their key partner compared with other sectors.

Uncertainty and risk continue to be the predominant obstacle to innovation

Even though innovation is undertaken to improve a business's position, there can be challenges. Just over half of all enterprises (51.2%) across Canada encountered at least one obstacle to innovation.

Uncertainty and risk, which increased from 22.4% in 2012 to 30.1% in 2017, and lack of skills, which grew from 17.9% in 2012 to 26.6% in 2017, remained the top two obstacles to innovation.

Chart 3 
Obstacles to innovation in Canada, 2017

The least encountered obstacles were related to intellectual property protection (5.7%) as well as finding and reaching agreement with collaborators (8.5%).

Virtually all enterprises that encountered obstacles to innovation took steps to overcome them. Measures were most frequently taken to overcome lack of skills (69.5%) and internal financing hurdles (63.1%).

In turn, businesses were least likely to take measures to overcome obstacles related to regulatory or government competition policy (38.6%). They also reported the lowest success rate at overcoming this type of obstacle (40.6%).

Large enterprises are most likely to use government programs to support innovation

Businesses worked to reduce barriers to innovation by seeking support from government programs. Almost one-third (31.6%) of enterprises overall used such programs to support innovation-related activities, with large enterprises (43.9%) more likely to use government programs than small enterprises (30.0%).

Government training and hiring programs were the most frequently cited programs (17.4%), followed closely by tax incentive or tax credit programs (16.2%).

One-half (50.3%) of large enterprises that used government programs to support innovation considered tax incentive or tax credit programs to be the most critical, compared with 37.4% of small enterprises.

Government training and hiring programs (35.8%) were almost as critical as tax programs for small enterprises. In contrast, government training and hiring programs were less critical for large enterprises (22.3%).

Chart 4 
Most critical government support programs for innovation-related activities, by size of enterprise, 2015 to 2017

Atlantic Canada focuses on skills development

Atlantic Canada's enterprises were more likely to utilize government training and hiring programs than any other type of government program, with one in five firms choosing this option. They were also the most likely to rank this type of support program as the most critical to innovation (44.2%), whereas enterprises in the other regions ranked government tax incentive or tax credit programs as most critical.

Compared with the other regions, enterprises in Atlantic Canada reported fewer obstacles to innovation related to lack of skills (21.2%). In addition, of those Atlantic region businesses that did report lack of skills as an obstacle, 71.3% attempted to mitigate it. Two-thirds of those attempts were reported as successful.

Contact information

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