Innovation and your global competitive advantage
Canadian companies are seeing global success when they innovate and evolve to meet changing customer expectations. Developing innovative capabilities is a key element of improving your competitive position, both here and internationally.
Businesses that fail to continually adapt their processes, product offerings and services risk being left behind.
In the global economy, business competition can stem from all corners of the globe. If competitors react quickly to changing industry demands, while you maintain the status quo, customers will quickly shift their attention to the better alternative.
It starts by creating a culture of innovation , Ellen Kullman, former chairman and chief executive officer of DuPont , told an audience at the Fortune Global Forum in Toronto on October 15.
“How you’re organized is amazingly important,” said Kullman. “For us, it was about what you honour? Do you honour the scientific process, the invention, the failures — and use those as learning tools to figure out how to do better? We had to create and recreate, in different generations, different ways to honour it.”
Acting on innovative ideas requires a defined mission and buy-in from the team that’s implementing the vision, added Renee James, chairman and CEO of semiconductor firm, Ampere Computing and the former president of Intel.
“If the team is motivated around something that’s never been done before or finding an answer to some kind of problem that’s challenged the company for years, there’s an entrepreneurial energy,” said James.
What’s driving the need for innovation?
Since the Industrial Revolution, advancements in technology have shaped, and reshaped the business world. Just a glance at progress in mobile communications technology over the last decade points to an exponential rate of development that swept all industries up in a world-wide tsunami of progress.
There is no doubt technology is responsible for vast changes in global business practices, but innovation transcends technology. It also includes the implementation of new business practices and strategies to improve products and services and increase productivity.
And sometimes, noted Kullman, you may try to solve one problem, yet find a solution to something entirely different and create a new market altogether.
“When we invented Kevlar, it was to replace steel because steel prices had gone through the roof,” Kullman told the Fortune Global Forum audience in Toronto. “By the time we engineered it, steel prices had dropped and they didn’t need it. We had a team of about 20 people and an amazing $50 million investment — a ton of money back then. They figured out they could make a fibre, weave it. And it’s spawned an entirely different industry than we ever considered when we started.”
Investing in new markets drives innovation
While most of Canadian exports are still destined to the United States, more than 70% of global growth the next few years will be generated from emerging economies, particularly in China and India, offering huge opportunities for Canadian companies.
More than half of Canadian exporting companies (56%) currently do business in emerging markets, offering Canadian firms access key methods of innovation like new supply chains, technologies and resources.
11% of Canadian exporters attributed increases in international sales to innovation.
How one company developed a better product to become a global player
Toronto-based ecobee created the world’s first Wi-Fi-connected thermostat, controlled using a mobile device.
The company was founded when software engineer Stuart Lombard struggled with programming the family thermostat to lower power consumption.
He designed the ecobee and experienced fast success. It wasn’t long before competition surfaced, specifically from the Google Nest, forcing ecobee to focus on innovation.
“We thought we were playing in the NHL but when Nest came along, we realized we were just the champions of bantam house league hockey,” says Lombard.
The company expanded its product development, growing market share and reaching milestones that allowed the company to attract important new investors, and an even larger financing round in 2018.
Investment to Canada boosts innovation
Foreign investment in Canada offers far-reaching benefits by providing access to new technologies, boosting productivity, expanding trade and encouraging innovation.
Programs like Invest in Canada have the goal of elevating Canada as a premier destination for foreign direct investment by facilitating global business investment in Canada; offering guidance, information and connections to support foreign business expansion.
Innovation and Canada-Europe trade
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) will unlock fresh opportunities by opening new markets for Canadian businesses.
The Canada-Europe trade deal eliminates 98% of tariffs on all non-agricultural Canadian goods entering the EU, rising to 99% over seven years.
Under CETA, Canada also gains newly-granted access to procurements by municipalities, local contracting authorities, public institutions, and utilities.
The new opportunities offered by CETA will lead to Canadian innovation across a broad scope of industries. With barriers-of-entry to the EU market reduced, Canadian firms can take the opportunity to innovate, perform research and development, improve their productivity, and adapt to the compliance demands of foreign markets.
Canada is a hub of innovation
Canada is investing heavily in innovation. Small and medium-sized businesses, regardless of their size or economic sectors, are successfully embracing a culture of innovation to grow their international sales in both services and products.
At his keynote speech, Prime Minister Justin Trudeau, the official host of the Fortune Global Forum, noted artificial intelligence (AI) as one key area where Canada is leading the world.
“Canada has a significant AI hub in Vancouver, Toronto and Montreal,” said the prime minister. “There are a lot of things we're doing by saying 'Let's figure out what this new world looks like by investing in it, shaping it.' We're investing massively in science.”
Innovation requires rethinking skills
Innovation is no longer in the realm of science and technology, alone, noted one panelist at the Fortune Global Forum, but requires a new type of thinking and a broader skill set.
“The skillset required to be disruptive and to innovate will be different from the mindset for the last 20 years,” said Steve Case, chairman and CEO of Revolution, a D.C.-based investment firm. “In the last 20 years, it was all about apps. Apps were the centre of gravity. In the next 20 years, if you’re really going to revolutionize healthcare [for example], it’s not about the app, it’s about the systems changes, the cultural changes, the doctors and nurses, government — the partnership aspects are incredibly important.”