Research and Development in Canada's Service Sector - ARCHIVED

Services constitute the single most important industry in Canada's economy, with 68% of total gross domestic product, 75% of employment and 53% of consumer spending. However, this industry is not widely perceived as being Canada's spearhead of research and development (R&D), a role more traditionally assigned to the manufacturing sector. Still, services are becoming an increasingly important force in R&D, and this is why we should reconsider the true role played by R&D in the service sector. This article, in fact, sets out to quantify R&D activities within the service sector.

Here are some highlights of this exploratory study:

- In 2002, the commercial service sector was responsible for 28.5% of all R&D expenditures for the economy as a whole.

- In 2000, 36.6% of all personnel assigned full time to R&D worked in the commercial service sector.

- Quantification of the amounts spent on R&D from within the service sector does not necessarily correspond to traditional industrial classifications. For example, R&D is primarily performed in such sectors as biotechnology, software, telecommunications, the environment and logistics, which are not included in the North American Industry Classification System (NAICS) classification scheme.

- Several service sector activities are very labour intensive and require highly skilled R&D workers. For example, of all employees performing R&D in the field of biotechnology, 23% hold doctorates or master's degrees.