Innovation and Productivity: Summary Results for Canadian Manufacturing Establishments

• Main Authors: Pierre Therrien, Petr Hanel
• Format: Article
• Language: English
• Published: Centre for the Study of Living Standards 2011-09-01
• Series: International Productivity Monitor
• Subjects: innovation; canada; productivity; human capital
• Online Access: http://www.csls.ca/ipm/22/IPM-22-Therrien-Hanel.pdf

Lagging innovation performance is seen as a key factor explaining weak productivity growth in Canada. This article uses data from the Canadian Survey of Innovation 2005 and the Annual Survey of Manufactures and Logging (ASML) to estimate an econometric model linking innovation and productivity in manufacturing firms. Our main findings are that firms with higher innovation output (measured by innovation sales per employee, i.e. sales of new and improved products per employee) achieve higher labour productivity, even when size of firm, intensity of human and physical capital, and labour productivity at the beginning of the period are taken into account.