Trade, Competitiveness and Blockchain: Productivity, Innovation, and Product Differentiation
Increasingly, anti-trade sentiments, often fueled by the idea that trade has created more losers than winners, have become increasingly common in foreign policy. This is exemplified by Britain’s vote to exit the European Union (Brexit), opposition by the U.S. to the Trans-Pacific Partnership (TPP), and the ongoing renegotiation of the North-American Free Trade Agreement (NAFTA). Our project examines the competitiveness of Ontario and Canadian food manufacturing firms by adopting novel/disruptive technologies. We focus on the use of blockchain technology in creating transparency in the food supply chain and examine the competitiveness of Ontario and the Canadian agri-food supply chain. Specifically, we aim to examine: (1) the likelihood of adopting blockchain technology for transparency of transactions and traceability in the agri-food supply chain and identify the factor that influences the adoption decisions; (2) the feasibility of adopting a novel food supply chain management strategy (i.e., blockchain encryption technology) and how the technology would benefit exporters from Ontario (and Canada) by differentiating their products from global competitors; (3) the link between inventory, productivity and export market participation for small- and medium-sized food processing firms. We will draw policy recommendations for appropriate institutional mechanisms that will enhance the success of the technology.
Firm Level Innovation and Barriers to Productivity and Revenue Growth in Food Processing Industry
In a recent study funded by the University of Guelph and the OMAFRA partnership (this Theme), we found a decline in productivity growth both at the sector and firm level. We identified scale inefficiency, capacity underutilization, and lag in technological progress as the main contributors to productivity growth. In this sense, innovation (investment) in the process (e.g., equipment), product, business model, and human resources innovation may play a key role in enhancing technological progress. We will use data contained in the Longitudinal Research Database maintained by the Canadian Centre for Data Development and Economic Research (CDER) to examine factors that influence innovation in small to medium, and large food and beverage processing firms. To identify the type of investment and innovations undertaken by food manufacturing firms we use data from several Survey of Innovation and Business Strategy. This project will also allow us to provide key metrics for industry growth measurement and benchmark competitiveness in Ontario and answer questions such as: Are small/medium firms’ revenue growing faster than larger ones? What are the barriers to investment in innovation for small and medium firms? The finding of the study will be supplemented with case studies.
Understanding and Monitoring Investment, Competitiveness, Employment & Productivity in Ontario’s Food Manufacturing Sector
The ongoing changes in industrial structure and technologies, and more open global market call for continuous monitoring of the competitiveness of the food manufacturing firms and their investment and innovation decisions. The recent decision to relocate processing plants out of Ontario by multinational firms such as H.J. Heinz Co., Smucker’s, Kellogg, and Kraft Food Groups Inc., and the EU-Canada agreement to double the amount of European cheese allowed into Canada underscore the challenges facing some of Ontario’s food firms. The long-term competitiveness in food processing depends on the ability to have strong financial and economic performance, and these metrics are crucial in the development of strong public policies to support the growth of the industry. The current state of knowledge regarding key financial (e.g., investment efficiency) and economic performance (e.g., productivity) indicators for Ontario food manufacturers is limited. The purpose of this project is two-fold: 1) to develop longitudinal firm-level databases of financial, production, and innovation variables and 2) to analyze the dynamics and determinants of firm-level investment, innovation, and productivity of Ontario’s food processing industry by product type, firm size, location, organizational structure, and other characteristics.
Cost Competitiveness of Ontario Food Industries: Productivity and Capacity Utilization
The purposes of the project are: (1) to examine the link between capacity utilization and productivity; (2) to examine the relationship between the export orientation and productivity growth of the Canadian food manufacturing industry at the plant level; and (3) to examine the relationship between financial leverage and production efficiency. Access to financial capital to finance investment for growth is one of the challenges agricultural co-operatives face. The food manufacturing industry has proven to be very resilient and important for the country’s economy, in terms of employment and revenue, when compared to other manufacturing industries. The food manufacturing industry is very important for Canada. The food manufacturing industry processes 70% of the food Canadians buy. The agri-food sector is a major player in Ontario’s economy. The agri-food sector generates about $34 billion a year in GDP and sustains 740,000 jobs, which is about 1 in every 9 jobs in the province.