The study shows that Canada is living with real productivity deficiencies. Productivity is measured by dividing gross domestic product (GDP) by hours worked. In other words, it's a reflection of our standard of living. In light of this report, focusing on marketing will help improve the situation.
According to Charles Plant, financial consultant and economist, the time has come to recognize the value of marketing within organizations. The author believes that the government should immediately invest heavily in sales and marketing, well beyond R&D, in order to propel the growth of Canadian companies. In an interview with La Presse, the researcher mentioned that, after years of marginal improvements in productivity, we need to rethink our way of thinking.
Productivity of Canadian companies: What the figures say
La Presse reports that, for example, Canadian software development companies devote 36% of their revenues to marketing their products, compared with 47% for their U.S. competitors.
The study notes that Canada's productivity deficit has existed for several years. This can be explained by the weaker capacity of Canadian organizations to export their products and services, in comparison with the United States. In fact, Canada's growth rate has been the lowest among G7 countries since 1970. Even among OECD countries, Canada ranks 21st... out of 23.
The author mentions that, over the years, the Canadian government has sought to encourage innovation - and therefore R&D - in organizations, but this support was mainly aimed at large companies rather than SMEs. Yet SMEs represent the bulk of the industrial fabric: only 0.2% of companies in the country are considered large organizations. And Canada has the fewest manufacturing companies of any of the 35 industrialized countries in the world. It's a vicious circle: less government investment -> fewer large organizations created -> lower productivity -> less investment.
Business financing, which comes from private funds, is also lower in Canada than elsewhere. The La Presse article mentions that, in the growth phase, companies raise 24% less, on average, than in the United States. It also takes longer for entrepreneurs to access a more substantial round of financing. Finally, there are far fewer venture capital agencies in Canada, compared with our neighbors to the south.
In conclusion
Canada's lag in marketing and commercialization is significant, when compared to the U.S., our G7 and OECD partners. Even if we must remember that the difference in population influences these statistics. In Canadian federal budgets for 2021 and 2022, the words "research and development" appear 34 times more often than the word "commercialization". Economist Charles Plant believes it's time for public policy to do more to encourage marketing and commercialization. Neighboring countries have shown that investment in marketing and commercialization of products and services pays off. Perhaps we need to rethink our strategy for the years ahead. The financing of our businesses and the value we place on exporting our talent and know-how will certainly be an important societal choice.
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