To bolster its lagging competitive standing, Canada must channel much of its efforts and investment into a maximum of eight industrial activities where it has proven expertise, a blue-ribbon panel of public and private leaders says.
"As a small fish in the big global pond, we must pick our paths rather than simply drifting in international currents," says the Leaders' Roundtable on Commercialization, a 50-member group assembled by the Conference Board of Canada.
This strategy of picking sector winners is not new, but the report, to be released today, is notable for setting out specific targets and deadlines to make it happen. It advocates choosing five to eight priority areas within 18 months, and sets out outcome targets over the next 10 to 15 years.
The report advocates a niche strategy similar to what has been pursued with some success in countries such as Ireland and Finland.
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"I call it a strategy that makes choices," says David Pecaut, a Toronto management consultant and the panel's co-chair. "Right now we are pretending that we don't have to make any choices. The underlying assumption is we can be good at everything, and that's just not been the experience worldwide."
That proposal to pick priorities is a cornerstone of the roundtable's vision of a "culture of commerce." The goal is that by 2016, half of all sales by Canadian companies will come from advanced products -- from new or significantly improved goods and services.
Currently, only about 20 per cent of all Canadian sales arise from new or significantly improved products.
The report lists a number of areas where Canada has leadership opportunities -- from energy-efficient buildings to advanced manufacturing in the auto sector. But it steers clear of choosing the top candidates. Rather, it lays out a process of decision making that would involve the Conference Board and groups like the Natural Sciences and Engineering Research Council of Canada (NSERC).
The selection of national champions would seem to smack of the kind of industrial policy that has fallen out of favour in recent years. Yet the roundtable has a number of private sector heavyweights such as its co-chair Don Pether, CEO of Dofasco Inc., and Michael Grimaldi, president of General Motors of Canada Ltd.
Mr. Pecaut, a senior partner at Boston Consulting Group, said the panel agreed that a nation should steer away from picking individual businesses as winners -- that's the role of the market. But a small country like Canada has to select sectors or areas on which to focus its resources.
The major thrust of the report outlines training, investment and research policies to create a competitive economy and specific time lines to achieve these goals:
Doubling private sector investment in R&D and innovation within the next 10 years.
Increasing private investment in workplace training by 50 per cent in the next 10 years.
Doubling the number of students graduating with work-specific skills or experience in the next 10 years. (That means higher funding and better business backing for internship and co-op programs.)
Ensuring, within five years, that all exporters and potential exporters have multiskilled management teams with at least one experienced international executive.
Increasing the average size of venture capital deals to match U.S. levels in the next decade. At the moment, the average U.S. deal is about a third larger than in Canada.
Mr. Pecaut said setting these targets was one of the hardest tasks of the roundtable, but he added that one of Canada's major problems has been shying away from taking on aggressive objectives.
The next stage is mapping out what needs to be accomplished each year to reach the targets, he said.
He said all 50 members of the roundtable are prepared to move right away on this agenda of defining sectors and clusters. What was needed now, he said, is a response from the federal government, adding that some of the provinces have indicated they are onside with the recommendations.
