Conditions for Successful Innovation
What conditions surround innovation in the agri-food business sector business, and how do these relate to increased productivity and environmental sustainability in Canada? This large research question is at the heart of Innovation, Agricultural Productivity and Sustainability in Canada, recently released by the OECD as part of its Food and Agricultural Reviews series. The review covers numerous topics, including
- development challenges and opportunities,
- policies that relate to innovation (including rural policy, agricultural policy, and economic policy), and
- public services.
This study was undertaken by OECD at the request of Agriculture and Agri-Food Canada (AAFC). For the most part, the OECD did not conduct independent research. Rather, the data was supplied by various federal and provincial departments that responded to an OECD questionnaire.
The Figure below is taken from page 16 of the report and shows the framework used by the OECD.
Canada Fares Well Overall
The overall conclusion of the report: Canada’s agri-food sector is competitive and export-oriented, benefitting rich natural resources and few environmental constraints. Agricultural products comprise 10% of Canada’s exports, a similar figure to that of the United States. Canada is the fifth largest exporter of food and agricultural products, ranking behind the EU, USA, Brazil and China.
“Moreover,” according to the report, “production and income have grown in this sector without placing too much pressure on resources. This sector must continue to innovate in order to take advantage of global changes in demand.”
On the plus side, Canada has
- economic and political stability,
- relatively low tax rates,
- relatively open trade,
- good infrastructure,
- an educated population, and
- a solid number of relevant patents.
It could improve in terms of simplifying and modernizing regulations, better access to venture capital, and improved use of information and communication technology in rural areas. The report notes that public investment in agricultural R&D has declined but remains high in terms of international comparisons.
For REAPontario stakeholders
In the remainder of this article, I highlight a few of the areas that may be of particular interest to our various REAPontario stakeholders.
The report addresses the regulatory environment for entrepreneurship by describing current laws and policies, and also gathered evidence from a panel of stakeholders from academia and industry who criticized “the length of approval procedures, information requirements and unclear rules for some bio-products… [and] some areas where regulations are missing and that insufficient human resources in the federal government working in regulatory areas contributed to delays in needed improvements” (pp. 56). They would welcome a more proactive system.
There is no single official rural policy in Canada. Rather, rural development in Canada has been addressed by various federal and provincial ministries such as agriculture, education, health, and communication. Rural development agencies are important in this context, as are Community Futures organizations which are federally funded but operate independently as non-profit organizations.
According to the report, “banks and co-operative financial institutions are well-represented in Canadian rural areas” (p. 83). There is considerable variation among provinces and regions, but the report does not provide specifics.
Skilled Labour in Agri-food
The number of postsecondary enrollments in food and food-processing related programs has been increasing in Canada, especially at Universities of Manitoba and Alberta . Among new students, two-thirds are female and one-half are international students (p. 94).
Despite increasing numbers, recruiting and retaining good workers is a concern in the sector. Sometimes jobs go unfilled because there are no applicants with the required skills. This has been identified as an obstacle to innovation, as shown in Figure 5.11 from the report (p. 95).
Employers reported that the number of new graduates in the sector fails to meet their labour force needs. Immigration programs can help to a certain extent
Sarah Wayland, Principal Investigator