The Importance of Skills for Innovation and Productivity

Someshwar Rao (), Jianmin Tang and Weimin Wang

International Productivity Monitor, 2002, vol. 4, 15-26

Abstract: The fundamental importance of skills for productivity advance is being increasingly recognized. In this article, Someshwar Rao, Jianmin Tang and Weimin Wang of Industry Canada provide additional evidence of this relationship through a detailed examination of the dynamics of innovation and determinants of productivity at the firm and industry level in Canadian manufacturing. The firm-level data suggest that experienced employees and new university graduates, cooperation with other firms, product market competition, and government support for R&D, training, and technical assistance are the drivers of innovation. Levels of postsecondary educational attainment, especially university education, are found to be important determinants of inter-industry differences in productivity levels among manufacturing industries. The authors conclude that Canada could make significant progress in closing the Canada-U.S. productivity gap by increasing the proportion of the workforce with a university education relative to that in the United States, and by increasing R&D spending and the capital intensity of production.

Keywords: Productivity; Skills; Innovation; Human Capital; Investment; Research and Development; R&D; ICT; Information; Communication; Technology; Labour Productivity; Labor Productivity; Manufacturing; Canada; Firm-Level; Product Innovation; Process Innovation; Product; Process; Innovation (search for similar items in EconPapers)
JEL-codes: J24 L60 O30 O51 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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