Impediments to advanced technology adoption for Canadian manufacturers

Abstract

Using survey data, this paper investigates problems that firms in the Canadian manufacturing sector face in their decision to adopt advanced technology. The data show that while the use of advanced technology is relatively important (users account for over 80% of all shipments), it is not widespread among firms (users represent only about one-third of all establishments). One explanation lies in the fact that while advanced technologies provide a wide range of benefits, firms also face a series of problems that impede them from adopting advanced technology. These impediments fall into five groups: cost-related, institution-related, labour-related, organizationrelated, and information-related. While it might be expected that impediments would be higher for non-users than users of technologies, the opposite occurs. We posit that the reason for this is that innovation involves a learning process. Innovators and technology users face problems that they have to solve and the more innovative firms have greater problems. We test this by examining the factors that are related to whether a firm reports that it faced impediments. Our multivariate analysis reveals that impediments are reported more frequently among technology users than non-users; and more frequently among innovating firms than non-innovating ones. We conclude that the information on impediments in technology and other related surveys (innovation) should not be interpreted as impenetrable barriers that prevent technology adoption. Rather, these surveys indicate areas where successful firms face and solve problems.

Exploring Firm-Level Innovation and Productivity in Developing Countries: The Perspective of Caribbean Small States

“…The literature on innovation barriers has mostly concentrated on differences in characteristics that affect the perception of barriers among innovative firms only (Galia and Legros, 2004;Mohnen and Rosa, 2001) and has treated non-innovative firms as an undifferentiated group (Baldwin and Lin, 2002;Hölzl and Friesenbichler, 2010;Iammarino, SannaRandaccio, and Savona, 2009). However, innovative firms experience barriers to increasing current innovation activities, while non-innovative firms that have an interest in innovation face barriers to starting innovation activities.…”

“…Thus, the literature is mainly focused on revealed barriers. However, carrying out innovation increases a firm's awareness of the difficulties that are likely to be encountered, without necessarily preventing them from pursuing innovation activities (Baldwin and Lin, 2002;Galia and Legros, 2004). The majority of the empirical studies based on these innovation surveys investigated factors that affected perceptions of the importance of innovation barriers, since engagement in innovation activity increases the firm's awareness of these barriers but does not necessarily prevent them from being successful innovators.…”

“…The perception of revealed innovation barriers may slow but not prevent innovative firms from engaging in innovation activities (Galia and Legros, 2004). Additionally, these barriers may serve as an indicator of how successful the firm is at overcoming them (Baldwin and Lin, 2002;Tourigny and Le, 2004).…”

“…In a study of Canadian manufacturing firms, Baldwin and Lin (2002) concluded that a larger proportion of innovators reported that innovation barriers negatively affected innovation intensity compared to non-innovators. Similarly, in a study of Canadian service firms which were innovators, Mohnen and Rosa (2001) also found that the most innovation intensive firms reported more frequent barriers to innovation.…”

Les obstacles à l’innovation dans les industries de services au Canada

“…Apparemment, les obstacles ne deviennent apparents que quand les entreprises y font face. Baldwin et Lin (1999) Ceci nous mène au coeur de notre recherche : existe-t-il une complémentarité entre les obstacles? Autrement dit, quels sont les obstacles qui vont de pair ?…”