Factors impacting innovative activity in western Canadian food processing firms

Abstract

The industrial restructuring and technological change in the agriculture industry has limited employment opportunities and income in some rural areas. Food processing is one of the ways proposed to add value to agricultural products and provide employment opportunities and economic growth in rural areas. Worldwide, the food processing has seen growth stagnate, and the Canadian food processing industry is no exception. For long term growth, food processing firms must adopt innovation.The development and implementation of innovation by food processing firms is influenced by six main factors. Access to product markets, labour availability and the network of a firm are some of the factors that influence innovation activity. The attributes of a firm, the competitive conditions a firm faces and the characteristics of the region where the firm locates also influence the innovation decisions of food processing firms. The innovation survey developed by the Canadian Agricultural Innovation Research Network, and distributed to 1,200 food processors in Western Canada links these factors and innovation activity.Access to a large population and household amenities, such as skilled labour and business services, increases the probability that food processors in Western Canada will participate in innovation activities. Newer, larger firms and firms that could access knowledge spillover from other firms and industries also had a greater probability of introducing innovation. Therefore food processing firms within 400 km of an urban center are more likely to participate in innovative activities then food processing firms in remote rural areas.