The title of this story is misleading as it states that Canada lags in Innovation. The first sentence then clarifies this better by specifying that it refers to "the ability to turn knowledge into money making products...". The two are very different as pure innovation can be developed in universities while the second one can only happen in a commercial setting. Canada likely does now lack in academic innovation but most definetly lacks in successfully commercialing that knowledge. In my experience this is due to a whole number of factors, not all under the government control and certainly nothing to do with big 'C' or small 'c' policies. No government over the last 20 years that I remember encouraged entrepreneurship, commercialization, marketing, risk taking, venture financing, etc. all the things required to make an invention reality. Simply putting more money into a university research project without having a system to take it to market afterwards will never move us up this list.

Canada gets a D in innovation, ranking the country 14th among 17 industrialized nations for its ability to turn knowledge into money-making products and services.

In a report from the Conference Board of Canada, this country ranked ahead only of Australia, Italy and Norway for innovation.

Switzerland, Ireland and the United States topped the list.

"The biggest challenge that we're facing is to turn some of the great ideas that we have into products that we can sell on the global market," Gilles Rheaume, the board's vice-president of public policy, said. "While we're doing some great research and development at the university level -- and it's an important factor -- it's not sufficient."

Of the 12 indicators used to compile these rankings, Canada was given a D in nine categories, two Cs and one B. Its highest grade was given for the number of scientific articles published relative to the population. Canada was eighth in that category.

Canada was ranked particularly poorly in the area of international trademarks per capita, finishing ahead only of Japan.

As well, it was dead last in the technology-exchange category, which measures "the flow of technological know-how and technological services into and out of a country as a share of GDP." Denmark and the Netherlands, which were part of the overall study, were not graded in this category due to a lack of recent data.

Canada was noted for having much of its economy based on the trade of commodities, with little value added before export. "Canada sells raw materials to be processed elsewhere," it said.

The report said countries scoring higher than Canada in innovation spend more on science and technology, and also have public policies that drive innovation supply and demand.

It also noted the most innovative countries tend to be leaders in one or more areas. It cited Switzerland's dominant position in the development of pharmaceuticals, Ireland's leadership in making technology a bigger part of its economy, and the U.S. for having top science and engineering facilities along with large capital markets.

The board said Canada was once at the leading edge of biotechnology but has fallen behind due to a complicated and slow regulatory process, and a reluctance of domestic companies to buy products developed in their home country.

Rheaume said it's a hurdle for a firm to sell a product internationally when it doesn't have a track record at home.

"When you're trying to sell a product abroad and you can't sell it at home, as a client, you'd start asking some questions," he said. "Is there something wrong with your product that even in your home base you can't sell it there?"

He called on government and major corporations here to be more active as early buyers of domestically-produced innovations.