Watch:A paper by Wulong Gu and Jianmin Tang
Examining innovation performance of Canadian manufacturing industries over the 1980–1997 period, the two authors found that almost all industries, with the exception of rubber and plastic, non-metallic mineral, and refined petroleum and coal products, became more innovative. Innovation performance was estimated with respect to four observable indicators: R&D propensity, number of patents per worker, the employment share of skilled labour, and real machinery and equipment investment per worker. To be innovative, firms must invest in R&D or purchase new M&E that embody the latest technologies. As well, they need to employ skilled workers to conduct R&D and adopt new technologies.
Constructing composite innovation indexes for 15 manufacturing industries and total manufacturing, allow for classifying industries according the increase in innovation activities. The largest increases were found in electrical and electronic products (from 1 to 2.89), followed by textiles (from 1 to 2.70), chemical products (from 1 to 1.87), paper and allied products (from 1 to 1.85), food and beverage (from 1 to 1.77).
The large increase in innovation activities in traditional industries (textiles, paper, and food) is surprising. For textiles this is consistent with the fact that textiles is one of the most innovative industries in terms of product and process innovation as companies invests heavily in M&E and adopts advanced technologies.
Source: Gu, W., and Tang, J. (2004) ‘Link between innovation and productivity in Canadian manufacturing industries’ Econ. Innov. New Techn., Vol. 13(7), pp. 671–686