How R&D Allows You To Compete Beyond Cost
Insight How key industries, like defence and security, are benefiting from homegrown R&D.
Mediaplanet What role does R&D play in strengthening our manufacturing sector?
Christyn Cianfarani We know company investments in research and development lead to innovation and that innovation is one of the key ingredients to productivity growth. In technology rich and export intensive sectors of our economy, like the defence industry, R&D investment is absolutely critical to global competitiveness. As a general rule, Canadian manufacturing firms are challenged to compete on price alone because of increasing competition from lower wage jurisdictions. We have to compete on quality and innovation, which can include innovations in manufacturing processes and materials. That is why R&D is so important to the success of Canadian manufacturing.
MP How can we create increasing demand for Canadian exports?
CC Export success is dependent on companies focusing in areas where there is long term demand potential. We also need to compete globally on quality more so than price. Knocking down trade barriers through negotiating both bilateral and multi-lateral free trade agreements are another piece of the puzzle. In protected sectors, or in sectors where governments are major customers, such as defence, export success is dependent on senior Canadian officials and political leaders becoming active salespersons; essentially, promoters of Canadian products and services with their counterparts in other governments.
“We have to compete on quality and innovation, which can include innovations in manufacturing processes and materials.”
Another piece of the export puzzle involves endorsement of products by the home government: i.e., Canada as the first-customer. It is challenging to export technology when your home country doesn’t buy it. In Canada we need to get better at identifying defence technologies that are in pre-commercialization and acquiring them through low-rate initial procurements, or leveraging these technologies into active procurements. When we endorse them on the world stage, we can then point to our own purchase of the product.