Canada's R&D; Leadership in Information & Communications Technologies
Executive Summary

Canada's R&D Value Proposition

Canada's R&D value proposition is clear - Canada has a critical mass in key R&D segments, a highly qualified and expanding workforce that is fuelled by some of the best universities in North America, linked by highly collaborative networks, and supported by the best R&D incentives in the G7.

1. Critical Mass

Canada is a recognised leader in telecommunications and networks, wireless and optical technologies, software development, advanced semiconductor design and the convergence of Internet-related technologies. Underpinning this is a Canadian ICT industry employing 583 000 people in more than 40 000 companies, generating total annual revenues approaching $140 billion.

2. Highly Qualified Workforce

Canada graduates over 30 000 engineering, mathematics and science students every year from its universities and an additional 20 000 science and engineering graduates from community colleges. Seven of the top 20 computer engineering programs in North America and 10 of the top 22 electrical engineering programs are in Canadian universities. Fifty per cent of ICT employees have university degrees.

Labour costs in Canada are extremely competitive - up to 37% less in selected ICT industries - than in the U.S. and industry turnover rates are significantly lower than in the U.S, particularly those in Silicon Valley. KPMG, in its 2002 study, "Competitive Alternatives: Comparing Business Costs in North America, Europe and Japan" reported that Canada has the lowest labour costs of the nine countries taking part in the study.

A high standard of living and quality of life coupled with facilitated entry into Canada for technology professional's combine to attract skilled researchers and professionals from around the world.

3. A Highly Networked R&D Community

All major universities are publicly funded and linked by government-supported networks and other R&D consortia. These include Networks of Centres of Excellence, Canadian Technology Network, the National Research Council, Communication Research Centre, CANARIE's coast-to-coast optically switched network, and regional R&D consortia, to name a few.

4. The G7's Best Ongoing R&D Tax Incentives

Canada has the G-7's most generous R&D tax credits. These credits provide ongoing support for companies that invest in R&D ... support that is double Canada's nearest competitors. And best of all, there is no incrementality test. KPMG also reported that Canada is the least expensive country of the nine studied in which to conduct R&D.

Canada is highly attractive to large multinational companies investing in R&D. IBM, Ericsson, Cisco, Lucent, Alcatel, Nortel Networks, Motorola, Intel, Nokia, ATI, Celestica and Harris are just a few of that have recognised and taken advantage of Canada's R&D environment.

In a variation on this R&D value proposition, talent-hungry, cost-conscious small and medium-sized ICT enterprises are locating their primary R&D functions in Canada, while sales and marketing functions remain in the US. This is particularly noticeable with Silicon Valley technology companies.

Full Government Support
The Canadian government and its partners work with potential R&D investors, providing them with detailed information on Canada's R&D network and programs, and assisting them to establish innovative R&D operations that produce high paybacks.