Archived — Canada In the 21st Century Series, Paper Number 10—The Corporate Response—Innovation in the Information Age, December 1998
Strategic Policy Sector
Economic Research and Policy Analysis Branch
This paper examines the corporate response to the major forces driving economic change: the accelerating pace of innovation, the emerging free market economy and the aging of Canada's population. In this new environment, firms must enhance their ability to collect and process information so as to create innovations. The authors suggest the need for market-type incentives within organizations so that firms can imitate the market's ability to foster efficient market generation and processing. Policy should be directed only at significant market problems that governments can usefully address. One such problem is inadequate competition in parts of the banking and financial sector, which partially explains the financing problems of small firms. Equally addressable are failures in markets for education, training and basic R&D. These inhibit innovation and justify the provision of government subsidies. More generally, the authors point out, government itself has become a competitive business; governments must deliver valuable public goods at competitive tax rates or risk an outflow of capital ideas and skilled labour.
Catalogue number: C21-27/3-1998-3
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