ON360 Transition Briefings 2022 – Ontario Needs a Broader and More Coordinated Approach to Innovation Policy
Measures to boost innovation—which is defined as new products or processes that add value to somebody’s life and improve economic or social well-being—have long been a focus of policy discussion in Ontario, and with good reason. Higher levels of innovative activity drive growth in productivity, which “in the long run is almost everything,” in the words of Nobel Laureate Paul Krugman. In particular, productivity growth is linked with higher pay and increased living standards for Ontarians. Yet productivity growth in Ontario has fallen steeply over recent decades, amidst a wider productivity slowdown across most advanced economies. The future looks no better: economic growth in Ontario is projected to further slow in coming decades due to an aging labour force with falling participation rates.