Tuesday, May 26, 2009

Canadian Business

In my post about Pixar opening in Vancouver, I spent some time talking about the nature of Canadian business. Today's Globe and Mail has an article about Canada's problems with innovation and productivity. Here is a quote that elaborates on what I'd written earlier, dealing with the small national market and the branch plant mentality that is satisfied to make things that are created elsewhere, as the forthcoming Vancouver Pixar shorts will be.

Canadian businesses just don't innovate enough. Too many don't have an internal culture of innovation. The domestic market is small and fragmented; not enough firms think internationally. International, for many, means the U.S., period, a rather dangerous myopia since that country is going to be economically crippled for a long time.

The report doesn't say so directly, but foreign ownership is a drag. Yes, a few Canadian branch plants get “world-product” mandates from head offices for certain products, but most don't. It's a scandal - and the blame is on the Canadian business class, too many members of which dream of getting rich by selling out to foreigners - that most mining companies are foreign-owned, the brewing business is gone, high-technology firms such as Cognos and Newbridge were swallowed up, and so on.

UPDATE: And further emphasizing the branch plant mentality, only in Canada would a government invest $23 million tax dollars in an American company that's going to make a film based on an idea from Britain and consider it a win for Ontario industry. I'm glad for the additional jobs, but this is not the way to strengthen Canadian animation in the long run. It's just more of the same.

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