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A model of industrial R&D spending in Canada

A model of industrial R&D spending in Canada. Tom Brzustowski RBC Professor. FPTT 2009 National Meeting, Ottawa, June 18, 2009. Industrial R&D is very important - but it’s thin in Canada. Here are some telling numbers for 2003:.

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A model of industrial R&D spending in Canada

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  1. A model of industrial R&D spending in Canada Tom Brzustowski RBC Professor FPTT 2009 National Meeting, Ottawa, June 18, 2009

  2. Industrial R&D is very important - but it’s thin in Canada Here are some telling numbers for 2003: Total number of businesses in Canada in 2003:                       1,018,900 Of those, the total number in sectors where we might expect most R&D (agriculture, forestry, mining, oil and gas extraction, utilities, manufacturing):              125,600 The number of successful applicants to the SR&ED tax credit program in 2003:          15,729 The number of companies listed as R&D spenders in the “Canadian Corporate R&D Directory Data Base” for the year 2003 – responsible for about 80% of BERD 663 Sources:  The first two numbers are from Statistics Canada, 2006, “Business Dynamics in Canada”, cat. no. 61-534-XWE2006001. The second number omits some sectors where there may also be some R&D: construction, professional, scientific and technical services. The third number is also from StatCan, but included in Ron Freedman’s paper “Understanding Trends in Industrial Research Performance in Canada”, published by the Impact Group, February 2008 The last number is taken directly from the “Canadian Corporate R&D Directory Data Base” published by Re$earch Inforsource, Inc. in 2007.

  3. A model of industrial R&D spending in Canada Group label steady changing Business model do R&D to stay in business are in business to do R&D Size many large and medium, many small, with annual R&D with annual R&D spending spending of a few $ million >$100 million Examples manufacturers with established research-based start-ups product lines in many sectors emerging from universities, government labs; technology spin-offs from large companies R&D intensity a few up to 20%, most below most near 100% or above, 10%, some far below many much higher R&D funding sales revenues and raised capital, tax credits source some tax credits and support programs, some sales revenues

  4. A model of industrial R&D spending in Canada…cont’d Goal of R&D improved or new products new products, with regulatory and processes; more approval if necessary; new sustaining than disruptive markets; more disruptive than innovation sustaining innovation Rhythm of business steady or quasi-steady fluctuating: involved in frequent as indicated by RDI and rapid change; big swings in RDI often driven by swings in revenues Leading indicator RDI decreasing moderately RDI greatly decreasing with time - of commercial with time when revenues grow fromRDI >100% down to the success faster than R&D spending mainstream valuefor the sector when revenues grow much faster than R&D spending Implications for policies must recognize long policies must recognize that these support policies time scales and the need for companies are short of both cash and programs big investments, steady model and time; programs must be of program delivery suitable responsive with quick decisions – need the attention of an "account executive"

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