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Executive Summaries Mar 9, 2020

Areas of Innovation to Generate Growth

In a context where the global economy is slowing down, Québec’s economic growth is outpacing the main markets of developed economies, especially that of Canada.

Indeed, according to the International Monetary Fund (“IMF”), growth in the advanced economies has averaged 1.7% since 2019 and is expected to reach around 1.6% in 2021[1]. Québec’s position as a leader is a result of a 3.5% economic growth, which is the best performance amongst the 20 largest metropolitan regions in North America[2].

Several factors explain this dynamism specific to Québec’s market, in particular by creating innovation zones, the result of a government investment of over $345 millions to support the development of 18 regional innovation poles, amongst other things.

With this investment, the provincial government is clearly counting on innovation as a factor of growth, success and prosperity for Québec.

One of Québec’s competitive advantages is, of course, the proximity between various market players. The regional innovation poles are designed to bring together entrepreneurship, creativity and innovation in different Québec geographic areas; the objective is to stimulate collaboration and cooperation amidst the various socio-economic protagonists in the market. Therefore, these innovation zones will be places for exchange and co-development where the proximity of stakeholders will allow for technological advances in a specific theme.

Thus, since May 2019 each region is now free to develop its own sector of activity according to its specialization. In the current free trade context, the regions are increasingly led to develop a specific speciality regarding the cost of the resources at their disposal. Innovation poles are part of this need to make Québec more competitive on the global markets.

In addition to facilitating the transition from idea to market and making the progression to sustainable growth, innovation zones will have to provide mechanisms that can attract private investments, both local and foreign, for the purpose of increasing our enterprises’ productivity.

According to the accounting firm Mallette SENCRL, which was involved in the first phase of this government initiative, any innovation zone project’s success depends, first and foremost, on a common regional vision.

It is by taking into consideration the territorial realities of each zone that an innovation zone project will be able to generate wealth, increase export potential, facilitate access to local and foreign investment and multiply the opportunities for strategic partnerships for user companies

Marco Murray, CPA, CMA, Partner - Advisory Services at Mallette.

Considering each stakeholder’s distinctive strengths in the innovation zones is also becoming fundamental, and it is the pooling of these strengths that will make it possible to create real added value for the entire territory.

This clustering of companies and institutions from the same sector within different innovation poles not only brings together innovative companies in these regions, but it also brings them closer to a set of complementary industries such as research centres, universities, government institutions and business associations. These interactions between various market players make it possible to create considerable synergies which benefit the entire province.

Following the adoption of Bill 27, An Act respecting primarily government organization with respect to the economy and innovation, Investissement Québec’s mandate was considerably expanded to strengthen the internationalization of businesses, their productivity and competitiveness.

In this context, the project to develop regional innovation poles remains even more relevant since they are intended to increase the commercialization of innovations and to make Québec a pole of attraction for private, local and foreign investment. It stands to reason to implement structures and processes that encourage innovation, the sharing of ideas, risk-taking and openness.

 

[1] International Monetary Fund, Real GDP Growth, octobre 2019, [En ligne :  https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD/USA/CAN] [2] Conference Board of Canada, Metropolitan Outlook 1 : Economic Insights into 13 Canadian Metropolitan Economies — Autumn 2019, [En ligne :  https://www.conferenceboard.ca/e-library/abstract.aspx?did=10466]

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