Montréal, November 6, 2019 – Understanding the drivers and barriers to innovation is essential when working to foster a genuine culture of innovation across the Québec economy. To this end, QuébecInnove, the Fonds de solidarité FTQ and Ernst & Young LLP (EY Canada) today published the findings of a Léger study on Québec SMEs and innovation, bringing new insights into the issues they face depending on their size, line of business and organization.
For the collaborators behind this study, the findings are an invitation to all actors in the innovation ecosystem to adapt their approach to the daily reality experienced by SMEs, the drivers of Québec’s economic vitality everywhere on the territory.
Collaborators’ Quotes
Isabelle Foisy, CEO of QuébecInnove: “Québec’s economy is built on SMEs, and they have tremendous potential for innovation and growth. This study shows many success factors for the development of innovation within companies. However, it also reveals a blind spot – SMEs with 25 to 100 employees that need resources and support adapted to their specific situations. Although the Québec economy is firing on all cylinders, SMEs, especially the smaller ones, often have their hands full managing their operations and find it difficult to plan for the future. A company’s governance structure can make a difference to its growth and the innovation “reflex” it develops. This survey clearly demonstrates that.”
Alain Denis, Senior Vice-President, Investment, Fonds de solidarité FTQ: “Only 60% of SMEs say they consult their employees about innovations or the arrival of new technologies. Companies need to maximize employee engagement at all stages of the innovation process. Encouraging this exchange is the way to establish a culture of innovation and make our businesses more competitive. Any resulting transitions must be just and carried out in collaboration with all of society’s groups. The Fonds de solidarité FTQ will do its part in this regard.”
Stéphanie Jean, tax expert and partner at EY Canada: “Businesses have a hard time identifying the government assistance or grant programs for innovation and R&D that are relevant to them. They also say that these programs are not adapted to their reality. EY conducted a comparative analysis of more than 40 countries on the best performing ecosystems and their programs. They found that successful ecosystems are structured and coordinated, allowing governments to intervene directly with just a few strategic programs that meet their needs.”
HIGHLIGHTS AND ANALYSIS OF RESULTS
The vast majority of companies view innovation as a key to success.
- 78% of SME leaders believe that their company's innovation efforts can help increase productivity.
- 67% believe that these efforts can attract and retain workers.
- SMEs with a board of directors invest twice as much as the average (as a percentage of sales) in R&D and innovation (8% vs. 3.6%).
- Moreover, 47% of companies with a board of directors and a management committee have a chief innovation officer. That's 50% higher than the average (31%).
- 84% of companies with 150 or more employees have come up with an innovation in the last 12 months (compared to an average of 57%).
That said, we are surprised by how many businesses consider themselves prepared for future technological disruptions when, in fact, the investments are very uneven:
- 70% of businesses consider themselves very prepared or sufficiently prepared to deal with the potential disruptions in their industry due to the arrival of cutting-edge technology and new innovations.
- However, 42% have not innovated at all in the last 12 months.
- And 69% invested 1% or less of sales in innovation and R&D in the last year.
In-depth analysis of the data reveals a blind spot in efforts to support innovation for companies with 25 to 100 employees, which need resources and programs tailored to their specific reality:
- 57% consider that government innovation programs are not responsive to their needs.
- Companies with 25 to 100 employees are more likely than the average to have not innovated in the last 12 months (45% vs. 42%).
- 55% develop projects only with internal resources, in other words, without partners.
Methodology used: A telephone survey was conducted between September 12 and October 16, 2019 to collect data from a sample of 800 decision makers in SMEs with 25 to 250 employees in Québec. This sample was generated randomly from the INFO-Canada and ASDE sampling frame. To ensure a representative sample of the study population, the survey results were weighted according to the number of employees, based on the information available in the sampling frame. As a comparison, a probability sample of the same size (n=800) would have a margin of error of +/- 3.5%, 19 times out of 20 (or 95% confidence level).
The complete report of the Léger study Les PME et l’innovation is available on the QuébecInnove website at www.Québecinnove.com/sondage. (in French only)
About QuébecInnove
Mandated by the Québec government to accelerate business innovation in Québec, QuébecInnove leverages the expertise of 14,000 researchers and experts working in its 120 member organizations active in the fields of research and innovation. With this extensive network, QuébecInnove facilitates access to and support for innovation in Québec businesses. A neutral umbrella organization, it promotes synergy and collaboration among ecosystem actors, stimulates Québec's culture of innovation and showcases Québec's expertise and achievements. By focusing on the added value of its members and harnessing the creativity of businesses, QuébecInnove is determined to make Québec a leader in innovation.
About the Fonds de solidarité FTQ
The Fonds de solidarité FTQ is a capital development fund that channels the savings of Quebecers into investments. With net assets of $15.6 billion as at May 31, 2019, the Fonds has helped create and maintain 215,104 jobs. The Fonds has 3,126 partner companies and over 700,000 shareholders-savers. For more information, visit www.fondsftq.com.
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
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