Toronto Regional Innovation Gauge Released along with Other Competitiveness Reports

A handful of competitiveness reports have been released in the past two weeks, each comparing various geographic locations and incorporating a range of innovation metrics. Perhaps the publication garnering the most international press has been The Global Competitiveness Report 2007-2008 by the World Economic Forum. Produced since 1979, this year’s version of the Report includes the Forum’s Global Competitiveness Index, which incorporates 12 “pillars of competitiveness” consisting of roughly 120 variables to rank 131 countries. These pillars range from Infrastructure and Macroeconomic Stability to more advanced groupings such as Technological Readiness and Innovation.



The U.S. and Canada are ranked first and 12th, respectively, in the report's Innovation subgroup. Each country’s Innovation ranking was calculated using such variables as the quality of scientific research institutions, company spending on R&D, government procurement of advanced technology products, the availability of scientists and engineers, and intellectual property protection, among others. The top five countries in terms of the composite GCI score were the U.S., Switzerland, Denmark, Sweden and Germany. The study ranked Canada 13th in the world, in terms of overall competitiveness.

 

A second recently released report, Raising Productivity Growth: Key Messages from the European Competitiveness Report 2007, delves more into the drivers of competitiveness in the European Union, especially in terms of productivity. The report notes that the labor productivity gap between the E.U. and the U.S., after widening continuously since 2001, is beginning to diminish. While the difference in annual productivity growth was relatively small at 0.1 percent, productivity measured as gross domestic product (GDP) per employed person was 38.6 percent higher in the U.S. than the E.U. and, if measured as GDP per hour worked, was 25 percent higher in the U.S. The report contends the main reason for this gap is the productivity growth from factors such as technical progress and organizational innovation. Policies designed to foster the use of information technologies, increase investment in R&D, and induce competition with product market reform should lessen the gap by driving productivity.

 

The first Annual Toronto Region Innovation Gauge, assembled by the Toronto Region Research Alliance, was also just released. The report benchmarks the greater Toronto region against 10 U.S. states with a relatively comparable population and economic size identified as leaders in technology -- California, Connecticut, Illinois, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Pennsylvania and Virginia. This region - with a population of 6.8 million - contains North America’s second-largest financial services cluster, second-largest automotive cluster, third-largest ICT cluster and the continent’s sixth-largest pharmaceutical cluster, the report observes.

 

Modeled on the Massachusetts Innovation Economy Index produced by the Massachusetts Technology Collaborative, the Innovation Gauge organizes indicators into three categories - innovation inputs, innovation processes and innovation outputs - in order to assess strengths and weaknesses. This 2007 version states three main findings:

• The first is that the Toronto region is not achieving its potential in terms of economic impact, even though it contains the fundamental ingredients for success. For example, the region is ranked second in terms of the proportion of the population over 25 years of age with a postsecondary degree or diploma (44 percent) and second in terms of engineering degrees awarded per capita. However, compared to the 10 benchmark states, the median household income was ranked eighth, and in terms of patents issued per capita, the Toronto region was ranked 10th.
• The perceived shortcomings of the first finding are perhaps connected to the second finding, which indicates that funding for R&D and new businesses is lacking compared to other competitor regions and countries. Out of the 11, Toronto was ranked seventh in private R&D expenditures per capita and ninth in venture capital investments.
• The third finding describes how a lack of information on the Toronto region’s innovation system postpones instituting the needed changes to improve performance. Already, work on the 2008 Innovation Gauge has begun, with the intention of adding more measurements to future editions. By further outlining the situation, the authors hope to continue the process of informing, engaging and building consensus among the region’s stakeholders.

Additional details about the Global Competitiveness Index, including the methodology used to calculate scores for each of the 12 pillars for all of the 131 countries, can be found at www.gcr.weforum.org/.

 

The E.U. Competitiveness Reports for 2007, all the way back to 1999, can be accessed at:

http://ec.europa.eu/enterprise/enterprise_policy/competitiveness/1_eucompetrep/eu_compet_reports.htm

 

The 2007 Annual Toronto Region Innovation Gauge can be downloaded at:

http://www.trra.ca/trratorontoregion