Key findings

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In 2007, firms performing research and development (R&D) dedicated $15.8 billion to industrial R&D spending up from $15.4 billion the previous year. Reported growth in R&D expenditures between 2005 and 2006 was flat while the estimated growth between 2006 and 2007 was 2.7% (table 1.3).

The six leading industries performing R&D in 2007 continued to be information and cultural industries ($1.7 billion), communications equipment ($1.4 billion), scientific research and development (1.3 billion), computer system design and related services (1.3 billion), pharmaceutical and medicine ($1.1 billion), and aerospace products and parts ($1.0 billion). Together these industries represent half (49.5%) of industrial R&D expenditures (table 1.17).

R&D activities provided employment to 137,686 full-time equivalents in 2005, up (8.9%) from 126,431 in 2003. Scientists and engineers accounted for 81,955 full-time jobs or 60% of the R&D personnel. Technicians, administrators and support staff comprised the remaining 55,731 full-time equivalents (table 2.2).

The four most important provincial contributors to gross domestic product are the provinces in which the highest levels of industrial R&D spending occur. The largest amount spent on R&D by industry occurred in Ontario ($8.0 billion or 52%) followed by Québec ($4.2 billion or 27%), British Columbia ($1.5 billion or 9%) and Alberta ($1.1 billion or 7%) (table 1.30).

The number of industrial research and development (R&D) performers in Canada is multiplying up from 9,967 in 1999 to 17,222 in 2004 representing an increase of 72.8% (table B.2).

Between 1999 and 2004, R&D performers in manufacturing lost ground slightly dropping from 47% of all R&D performers in 1999 to 45% in 2004 whereas the proportion of R&D performers in the services gained a very small share, up from 47% in 1999 to 48% six years later (table B.4).

The industries making the greatest increases in R&D performers between 1999 and 2004 based on percentage change are printing (231.3%), agriculture (179.3%), and furniture and related products (161.6%). These industries all started as small performers in 1999, printing had just 67 performers, agriculture 179 and furniture and related products 99 (table B.4).

Between 1999 and 2004 the number of R&D performers in computer system design and related services increased by a count of 926 to attain 2,203 in 2004. Computer system design and related services was also the industry with the largest number of R&D performers in 2004 and represented 13% of all R&D performers (table B.4).

The next largest increase in number of R&D performers was in wholesale trade which increased by 609 over the period to reach 1,383 in 2004. Some of the wholesale trade performers will be performing R&D related to their products, for instance pharmaceutical products. This is due to how the firms are classified by industry (table B.4).

Only two industries, mining and computer and peripheral equipment, lost R&D performers between 1999 and 2004 (table B.4).

Geographically, R&D performers are concentrated in Quebec and Ontario. Between 1999 and 2004, Quebec’s share of R&D performers has remained stable at 40% and Ontario’s share has increased from 34% in 1999 to 38% in 2004. Provinces that saw decreases in their shares of R&D performers between 1999 and 2004 were Nova Scotia, New Brunswick, Saskatchewan and Alberta (table B.3).

The number of R&D performers in Ontario increased by 3,127 between 1999 and 2004 while Quebec saw an increase of 2,864 during the same period. Together these provinces accounted for the vast majority in the increase of R&D performers (5,991 or 83%) in the six years (table B.2).

R&D performers represented just 1.1% of firms with at least one employee in 1999 while in 2004 this share had increased to 1.8%. Perhaps indicating a growing interest in innovation, all sectors and industries studied showed increases in their propensity to perform R&D between 1999 and 2004 (table B.6).

Of interest is the fact that 14% of manufacturing firms with at least one employee were R&D performers whereas just 1.1 service sector firms performed R&D in 2004 (table B.6).

The R&D intensity of manufacturing firms has almost doubled from 1999 (7.3%) to its 2004 height of 14% which reflects a combination of a decrease (-13.7% or 8,687) of manufacturing firms between the two years as well as an increase in the number of R&D performers over the same time (66.3% or 3,075 additional R&D performers). This suggests that R&D performance is perceived as important by those manufacturing firms with one or more employees operating in 2004 (table B.1, B.5 and B.6).

The communications equipment industry at 56.5% was the industry in which firms had the highest propensity to perform R&D in 2004 while firms in health care and social assistance (0.2%), retail trade (0.3%) and transportation and warehousing (0.3%) were the least likely to be R&D performers (table B.6).

Other R&D intensive industries included pharmaceutical and medicine (47.4%), semiconductor and other electronic components (37.8%) and scientific research and development (37.2%) in 2004 (table B.6).