Strengthening structures: Upgrading specialized support and competitive pressure Working Paper 5 - July 2004
Ontario workers’ wages are 23% lower than their counterparts’ wages in US peer states in the industries that are the most important to Ontario’s prosperity. That is the key conclusion of Working Paper 5 released today by the Institute for Competitiveness & Prosperity.
For the first time the Institute has been able to measure the effectiveness of Ontario’s clusters of traded industries. Previous research at the Institute showed that Ontario benefits from a good mix of industry clusters. The latest research shows that Ontario’s clusters are not as effective as the same clusters in the peer states.
The Working Paper shows that Ontario’s market structures provide inadequate specialized support and competitive pressure to firms and individuals. Drawing on research conducted by the World Economic Forum and its own research, the Institute concludes that Ontario provides an adequate level of general support – in infrastructure and basic education - to the economy. However, Ontario’s clusters and the overall economy are not benefiting from specialized support, such as university/industry collaboration and specialized research and training – the kind of specialization that creates world-class advantage for companies and workers. Nor does Ontario have the structures that create conditions of intense competitive pressure from firm rivalry and sophisticated customers.
