Those of us who live in Canada and love it should be more than a little concerned about our declining global competitiveness.
Why, with our abundance of natural resources and skilled workers, has Canada gone from an overall ranking of 10th place in 2010 to 14th place in 2012 as reported by the World Economic Forum’s Global Competitiveness Index 2012-2013?
The Global Competitiveness Index is broken into 3 sub-indexes:
1) Basic requirements (infrastructure, institutions and macro-economic environment) – we rank 14th, a decline of one position.
2) Efficiency enhancers (higher education and training, technological readiness, labour market efficiencies, market size) – our ranking is a healthy 6th.
3) Innovation and business sophistication factors (capacity to innovate, nature of competitive advantage) – we have fallen 6 positions from 15th to 21st, more than any other developed country.
According to the Conference Board of Canada, it is “Canada’s inability to leverage its economic and structural strengths for value-added and competitive advantage” that is the major stumbling block.
Given Canada’s position as an advanced economy, we can’t rely solely on our resource-rich country to ensure our future prosperity; we must embrace innovation. This means producing value-added products for both the domestic and international markets.
In order to do that, we must accelerate our investment in quality scientific research institutions, government acquisition of advanced technology products, industry-university collaboration in R&D and private industry R&D as other advanced nations are doing, or we could find ourselves slipping further and further behind.
Our standard of living as Canadians is what is at stake, as more emerging nations aggressively pursue a global competitive advantage.
Here is what the Canadian Chamber of Commerce has identified as 10 barriers to our competitiveness that urgently need to be addressed:
1) Skills shortages: Keeping workers’ skills current and making sure that the education system is addressing future needs is key.
2) Barriers to world markets for Canada’s energy products: Both levels of government need to work to develop the necessary infrastructure and relationships to reach our potential.
3) Inadequate workforce productivity: We are underperforming in relation to our competitors. We must leverage technologies and infrastructure to improve in this area.
4) Inadequate public infrastructure planning: Criteria and commitment of government need to be consistent to encourage private investment.
5) Tax complexity and structure: The tax system is overly complex and over-relies on income and profit taxes.
6) Poor innovation performance: Canada needs an aggressive strategy in place as we move into the future.
7) Deficient strategies for trade success in new markets: Canada has been slow and off the mark in expanding its access to trading partners beyond the traditional slow-growing ones.
8) Internal barriers to trade: $14 billion is what it currently costs Canada in losses due to internal trade barriers. We need one internal marketplace.
9) Uncompetitive travel and tourism strategies: In a short 10 years Canada has gone from being the 7th most popular destination to the 18th through reduced marketing and high transportation costs.
10) Lack of access to capital: Work is required to support a healthy venture capital market and appeal to foreign investors.
As you can see, we have a large shopping list of areas that require improvement in the immediate future in order for us as Canadians to accelerate our competitiveness and maintain our Canadian lifestyle.