Institute Releases First Working Paper

Released April 2nd, 2002

Toronto — The Institute for Competitiveness and Prosperity today released a comprehensive view of Ontario’s industry clusters, which for the first time shows how they compare with similar clusters in other provinces and U.S. states.

Drawing on the analytical approach of Harvard Business School’s Michael Porter, the Institute released its first Working Paper on Ontario’s competitiveness, productivity and economic progress, A View of Ontario: Ontario’s Clusters of Innovation. The paper is the result of collaboration with Porter’s Institute for Strategy and Competitiveness, Harvard Business School, which for the first time has allowed Porter’s approach to be applied to Canadian data. Regional clusters of competing companies and associated institutions have been shown to innovate more rapidly, diffuse knowledge more quickly and sharpen global competitiveness through intense local rivalry. Clusters pressure individual competitors to perform at their best, but also give them support to compete globally.

“While many agree on the importance of traded industries,” said Roger Martin, Dean of the University of Toronto’s Rotman School of Management and Chairman of the Institute for Competitiveness and Prosperity, “we haven’t been able in Canada to measure and monitor them with analytical rigour. The Working Paper identifies the size and scope of Ontario’s clusters of traded industries and provides a fabulous base for further research and analysis in a North American context.”

The Working Paper shows Ontario to have an above average share of its employment in traded clusters, lead by business services, financial services, and the automotive industry. It compares Ontario’s top-ten clusters with those of Alberta, Michigan, Illinois and Massachusetts. The paper also profiles the entertainment, automotive, pharmaceuticals & biotechnology and financial services clusters.

“The good news,” said Martin, “is that we’ve got great strength and a diversity of clusters in the province, particularly in the Toronto area. The bad news is that Ontario is not achieving the productivity and income levels that we should from this solid platform.”

Martin was referring to the Institute’s assessment of the drivers of per capita earnings. Building on research from Statistics Canada, the paper points to three possible causes for sluggish income growth – low productivity, not enough people working in high-productivity jobs, and a poor record of innovation and upgrading by industry. “We want to peel the onion on these possible causes and see what lies behind them,” said Martin. “Our next Working Paper will focus on how best to measure these and other drivers of our economic progress.”

Following today’s release, the Institute is continuing its research work as well as engaging business leaders, academics, regional development agencies and the public in a consultation process. But the primary audience for the Working Paper is the Ontario Task Force on Competitiveness, Productivity and Economic Progress – a task force of industry and academic leaders appointed by former Premier Harris and chaired by Roger Martin. The Institute is supported through the Ministry of Enterprise, Opportunity and Innovation. The Task Force will issue its first annual report to the people of Ontario in the fall.

The complete paper can be downloaded directly from:
http://www.competeprosper.ca/public/wp01.pdf

If you have any difficulty downloading or printing the paper, the Institute will ship a hard-copy version to you. Please .(JavaScript must be enabled to view this email address) to request a hard copy.

For more information contact Dr. Chris Riddle, Executive Director of the Institute for Competitiveness and Prosperity at 416.920.1921 ext. 222.

About the Institute
The Institute for Competitiveness and Prosperity is an independent not-for-profit organization established in 2001 to serve as the research arm of Ontario’s Task Force on Competitiveness, Productivity and Economic Progress.

Working Papers published by the Institute are primarily intended to inform the work of the Task Force. In addition, they are designed to raise public awareness and stimulate debate on a range of issues related to competitiveness and prosperity.

About the Task Force
The creation of the Task Force on Competitiveness, Productivity and Economic Progress was announced in Ontario’s April 2001 Speech from the Throne. Roger L. Martin, Dean of the Joseph L. Rotman School of Management, is the Chairman.

The mandate of the Task Force is to measure and monitor Ontario’s competitiveness, productivity and economic progress compared to other provinces and U.S. states, and to report to the public on a regular basis. Members of the Task Force were announced by Premier Harris on October 17, 2001 and details can be found at www.CompeteProsper.ca.

It is the aspiration of the Task Force to have a significant influence in increasing Ontario’s competitiveness, productivity and capacity for innovation. This, they believe, will help ensure continued success in the creation of good jobs, increased prosperity and a high quality of life for all Ontarians. The Task Force intends to seek breakthrough findings from their research and to propose significant innovations in public policy in order to stimulate businesses, governments and educational institutions to take action.