Innovation shapes productivity and economic growth. Developing, commercializing and adopting new technologies, approaches, and ideas is critical for Canada to maintain a competitive economic edge.
Unfortunately, recent signs on Canada’s innovation front aren’t good. Every year, the World Intellectual Property Organization (WIPO) publishes an international ranking of the most innovative economies, using its Global Innovation Index. In 2025, Canada quite literally fell off the map. The Economist’s latest chart of the index highlights the top 15 countries, and this year, Canada isn’t among them. After narrowly holding a spot in recent years, Canada slipped far enough down the ranks to disappear from view while China continues to climb.
It’s not for lack of talent or knowledge. Canada boasts one of the most highly educated workforces, world-class universities, and leading research across fields from AI to medicine to cybersecurity. Canadian researchers have contributed to breakthroughs ranging from insulin to new technologies for oil extraction to the foundations of generative AI as we know it today.
The trouble with Canada’s innovation ecosystem is that it doesn’t get out what it puts in. One way to measure this is to compare innovation inputs—dollars, resources, and the strength of our institutions and foundations—with the outputs: the economic value of new products, services, and intellectual property.
On the “input” side, a relatively strong late-stage venture capital market and robust university-industry collaboration help Canada rank 13th globally.
But when it comes to “outputs” from innovation, Canada struggles. Canada sits just 20th overall, dragged down by weak results in high-tech exports (37th), trademarks (85th), industrial designs (95th), and other valuable assets. And that’s the crux of the problem: it’s the outputs, not the inputs, that ultimately drive economic growth.
Canada ranks lowest in the G7 at turning innovation inputs into valuable outputs. The gap is stark: Italy, for instance, invests far less in innovation yet achieves roughly the same results. It’s like training all year for a race only to have someone get off the couch and beat you.
If Canada isn’t getting enough of a bang for its buck on innovation spending, that might speak to a lack of supports to encourage commercialization and scaling and, more broadly, ineffective policies to incentivize the innovation ecosystem. Without effective investment in innovation, businesses fall behind, revenues decline, and their ability to reinvest and grow diminishes.
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