The Study of Innovation

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The Impact Centre explores questions at the intersection of science, business, policy, and society. We conduct research on all aspects of innovation, from ideation and commercialization to government policy and broader themes such as the connection between science and international development.

We study how companies of all sizes navigate the complex path between a discovery and its market and how their collective innovations add up to create a larger socioeconomic impact.

The Narwhal List

In order to provide a tool to enable entrepreneurs and investors to gauge how attractive firms are from a financial standpoint, we are pleased to introduce a way to measure Financial Velocity. Financial Velocity is defined here as the amount of funding a firm has raised divided by the number of years it has been in existence. It is expressed in millions of dollars per year. This measure reports the rate at which companies raise and consume capital.

We have assembled a list of the top Canadian businesses based on Financial Velocity and are pleased to introduce the Narwhal List. This list shows Canadian venture capital backed companies with the highest Financial Velocity.

For a copy of the report, click on the link below:

The Narwhal Report

In order to provide a tool to enable entrepreneurs and investors to gauge how attractive firms are from a financial standpoint, we are pleased to introduce a way to measure Financial Velocity. Financial Velocity is defined here as the amount of funding a firm has raised divided by the number of years it has been in existence. It is expressed in millions of dollars per year. This measure reports the rate at which companies raise and consume capital.

We have assembled a list of the top Canadian businesses based on Financial Velocity and are pleased to introduce the Narwhal List. This list shows Canadian venture capital backed companies with the highest Financial Velocity.

A Failure to Scale

Policy experts and innovation practitioners have criticized Canada’s innovation system for its inability to grow and scale companies. This has been a baffling issue because Canada’s technology sector has been successful at starting companies and generating innovations with high potential. In this study we wanted to determine whether the way in which Canadian companies raise funds also adding to the scaling problem?

This study reveals three critical issues:

1. Canadian companies wait longer before they start raising funds.
2. They raise funds less often.
3. They raise less money over time.

And as a result of this pattern, even our best companies are not particularly attractive to investors as their growth rates fall well below that of the most successful US companies.

A Nation of Soft Sellers

Our success as an “Innovation Nation” depends not only on our ability to come up with novel ideas or inventions but also on our ability to market and sell those ideas. Unfortunately there is a striking difference in the spending behaviour of Canadian and American on marketing and sales (M&S). While mid-sized US software companies spend, on average, 34% of their revenue on M&S, comparable Canadian firms only allocate 20% of their budgets to those expenditures.

Canada’s Venture Capital Puzzle

The lack of venture capital in Canada has been denounced consistently in studies and think tank reports, and by the media, entrepreneurs, and even venture capitalists themselves. But while the general consensus is that Canada does not have enough venture capital, we somehow manage to rank #4 in the sale of technology companies.
How can we have too little venture capital funding but be so successful at selling companies? The answer lies in how we are funding companies and what stages we are able to fund.

Similarities in Canadian and American corporate innovation cultures

While many commentators claim that Canada lags behind the United States in its ability to innovate, we found no evidence of this in our recent study on corporate culture. While these results may appear inconsequential, they allow us to eliminate a potential cause of Canadian innovation problems by highlighting the similarities in the Canadian and American beliefs about a culture of innovation.

Canadian Business Spending on R&D Isn’t as Low as We Think

Business expenditures on research and development have been under-reported by Statistics Canada for almost 20 years. While many reports bemoan Canada’s lack of spending on Innovation compared with the OECD, we haven’t been using the same definition of R&D and this has caused it to be under-reported.

Canadians lag Americans in their attitudes to innovation

Our recent study on attitudes towards innovation found that there are 29% more Americans than Canadians who have a strongly positive attitude towards innovation. Americans outscore us in almost every dimension of attitudes towards innovation, among managers and employees, men and women, and among all age groups.