Data check: Business investment in research continues to fall

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For a long time, OCUFA has been critical of Canadian business’ sluggish performance in R&D funding. New data reveals that their poor performance is only getting worse.
Business expenditures on research and development (R&D) in Canada have been decreasing for a few years, but the decline appears to be picking up steam. Statistics Canada estimates for 2013 show a three per cent decline from last year. If the rate of inflation in the economy is 1.3 per cent as bank economists expect, the real drop will be four per cent.
In the meantime, the economy continues to grow. As a percentage of gross domestic product (GDP), the downward slope in business expenditures on R&D is even steeper. If real GDP grows by 1.7 per cent – the current forecast by bank economists – the intensity of business R&D will fall to 0.83 per cent for 2013. That will be its lowest point since 1993.
During the 1990-1991recession and the ensuing recovery, the intensity of business expenditures on R&D was on the upswing. Since 2006, it has been trending steadily downwards. It will be 25 per cent lower in 2013 than it was in 2006. Even if the collapse of Canada’s biggest R&D spender is taken into account (by subtracting the now-defunct Nortel’s estimated expenditures) the drop in intensity is still 13 per cent.
Re$earch Infosource Inc., Canada’s Top 100 Corporate R&D Spenders List
Statistics Canada, Industrial Research and Development: Intentions 2013

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