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The Importance of Skills for Innovation and Productivity

Author

Listed:
  • Someshwar Rao
  • Jianmin Tang
  • Weimin Wang

Abstract

The fundamental importance of skills for productivity advance is being increasingly recognized. In this article, Someshwar Rao, Jianmin Tang and Weimin Wang of Industry Canada provide additional evidence of this relationship through a detailed examination of the dynamics of innovation and determinants of productivity at the firm and industry level in Canadian manufacturing. The firm-level data suggest that experienced employees and new university graduates, cooperation with other firms, product market competition, and government support for R&D, training, and technical assistance are the drivers of innovation. Levels of postsecondary educational attainment, especially university education, are found to be important determinants of inter-industry differences in productivity levels among manufacturing industries. The authors conclude that Canada could make significant progress in closing the Canada-U.S. productivity gap by increasing the proportion of the workforce with a university education relative to that in the United States, and by increasing R&D spending and the capital intensity of production.

Suggested Citation

  • Someshwar Rao & Jianmin Tang & Weimin Wang, 2002. "The Importance of Skills for Innovation and Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 4, pages 15-26, Spring.
    • Handle: RePEc:sls:ipmsls:v:4:y:2002:2
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    References listed on IDEAS

    as
    1. Someshwar Rao & Ashfaq Ahmad & William Horsman & Phaedra Kaptein-Russell, 2001. "The Importance of Innovation for Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 11-18, Spring.
    2. Lavoie, Marie & Roy, Richard & Therrien, Pierre, 2003. "A growing trend toward knowledge work in Canada," Research Policy, Elsevier, vol. 32(5), pages 827-844, May.
    3. Jianmin Tang & Frank C. Lee, 2000. "Productivity Levels and International Competitiveness between Canadian and U.S. Industries," American Economic Review, American Economic Association, vol. 90(2), pages 176-179, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Someshwar Rao & Jianmin Tang & Weimin Wang, 2003. "Canada's Recent Productivity Record and Capital Accumulation," International Productivity Monitor, Centre for the Study of Living Standards, vol. 7, pages 24-38, Fall.
    2. Kraemer-Mbula, Erika & Tang, Puay & Rush, Howard, 2013. "The cybercrime ecosystem: Online innovation in the shadows?," Technological Forecasting and Social Change, Elsevier, vol. 80(3), pages 541-555.
    3. Someshwar Rao & Andrew Sharpe & Jianmin Tang, 2004. "Productivity Growth in Service Industries: A Canadian Success Story," CSLS Research Reports 2004-01, Centre for the Study of Living Standards.
    4. Don Drummond & Evan Capeluck & Matthew Calver, 2015. "The Key Challenge for Canadian Public Policy: Generating Inclusive and Sustainable Economic Growth," CSLS Research Reports 2015-11, Centre for the Study of Living Standards.
    5. Jianmin Tang & Carolyn MacLeod, 2006. "Labour force ageing and productivity performance in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(2), pages 582-603, May.
    6. Jianmin Tang & Weimin Wang, 2005. "Product Market Competition, Skill Shortages and Productivity: Evidence from Canadian Manufacturing Firms," Journal of Productivity Analysis, Springer, vol. 23(3), pages 317-339, July.
    7. Martin Falk & Eva Hagsten, 2021. "Innovation intensity and skills in firms across five European countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 371-394, September.
    8. Dostie, Benoit, 2014. "Innovation, Productivity, and Training," IZA Discussion Papers 8506, Institute of Labor Economics (IZA).
    9. Andrew Sharpe, 2003. "Why are Americans More Productive than Canadians?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 6, pages 19-37, Spring.
    10. Someshwar Rao & Jianmin Tang, 2004. "Competitiveness Challenges Facing Canadian Industries," Canadian Public Policy, University of Toronto Press, vol. 30(4), pages 365-380, December.
    11. Andrew Sharpe, 2004. "Ten Productivity Puzzles Facing Researchers," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 15-24, Fall.

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    More about this item

    Keywords

    Productivity; Skills; Innovation; Human Capital; Investment; Research and Development; R&D; ICT; Information; Communication; Technology; Labour Productivity; Labor Productivity; Manufacturing; Canada; Firm-Level; Product Innovation; Process Innovation; Product; Process; Innovation;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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