BDO Canada has announced the release of its latest report – “Canada’s productivity paradox” – which explores the contributors to the country’s lagging productivity despite its abundant natural resources, highly-skilled workforce, and strong institutions and research capabilities.
The report’s objective was to provide a roadmap for Canada’s businesses to improve its productivity, efficiency, innovation, and ability to compete globally.
“Canada's productivity paradox underscores the urgent need for businesses to embrace a technology-driven future, from AI to cloud computing,” said Rishan Lye, consulting leader at BDO Canada, in the news release.
“Canada's productivity paradox demands urgent attention, particularly as we navigate an increasingly complex and uncertain geopolitical landscape,” said Jeff Chapman, BDO Canada’s managing partner, advisory services, in the news release.
“With this report, we aim to highlight the complex factors hindering our overall productivity and provide actionable recommendations for businesses to navigate these challenges,” Chapman added in the news release.
According to the news release, Canada’s productivity gap can be seen in the following areas:
- A Canadian worker takes 1.4 times more effort than a US worker to add the same value to the economy
- In 2021, Canada’s investment in information and communication technology was 25 percent of the gross domestic product (GDP), compared with 37 percent in the US
- In 2022, Canada's business innovation rate was at 36 percent, compared with 50 percent in the US and a 45-percent average of the Organisation for Economic Co-operation and Development (OECD)
- Canadians have a fear of failure rate of 55 percent, compared with 45 percent for their US counterparts and a 44-percent average rate across 16 developed countries
Recommendations
“To remain competitive, leaders must champion the adoption of these technologies and ensure their seamless integration across all levels of the organization,” Lye said in the news release. “This requires an investment in employee training and development, empowering them with the skills to leverage these technologies and unlock innovation for sustainable growth.”
The news release shared the following recommendations for Canada’s businesses to improve productivity:
- Have more research and development investments to improve human capital, product differentiation, competitiveness, productivity, and economic resilience
- Welcome new technology and adopt it effectively to boost efficiency and productivity
- Make use of partnerships with private equity, pension funds, government entities, and public companies to accelerate growth
- Foster a culture of innovation
- Encourage experimentation and risk-taking to drive innovation within organizations
- Maximize government incentives and programs available to support growth and drive innovation
- Manage risks to allow for the adoption of new technologies while maintaining strong internal controls and compliance
“By adapting, innovating, and embracing a growth mindset, Canadian businesses can improve productivity and remain competitive on a global scale,” Chapman said in the news release. “BDO is dedicated to supporting this journey, offering a range of services from digital transformation and operational optimization to enhancing access to capital.”
BDO Canada said that it developed this report with collaborative insights coming from professionals from across the firm.