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A Rise in Software-Related R&D

The troubling news is that foreign-owned firms are driving R&D spending on intangible assets. There are some benefits, but there are also huge risks.

In this article written for the Policy Options, we look under the hood of the familiar story of Canada's lagging R&D investments. We find an interesting shift away from R&D in manufacturing towards more intangible R&D investments in areas like software development. This finding not only suggests that major changes are underway in where innovation is happening in our economy, but also raises a number of questions surrounding whether or not we are accurately measuring the innovative activity that is taking place, and who ultimately benefits from these R&D investments since an increasing proportion of the Canadian-based firms that are spending on new kinds of R&D are foreign-owned.

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