First, our companies are like professional service firms. We don't have inventory. Our assets are people whom we charge out. In a cost-competitive market, it's often difficult to do in-house research, because you can quickly become very un-cost-competitive. That's not to say it doesn't happen, but it is a challenge.
To be quite candid—I don't mean to sound glib—one of the biggest barriers to innovation, at least to a sector of our membership, is government procurement, largely because it's very price-focused, and even though Treasury Board directives say “value”, sometimes at the bureaucratic level it's much easier to defend an empirical decision than a value-based decision. As a result, often we see a lot of price pressure, meaning there's not a lot of incentive to grow the scope of the project or propose alternatives and still be cost-competitive.
Second, there's an enormous amount of risk transfer onto our members, particularly by government. Therefore, if they try anything new or unproven, they're asking for trouble.
Third, at the end of the day, if you accidentally invent something, most government contracts stipulate that the government owns all the intellectual property. That's not in every case, but in most government procurement and certainly in the standard stuff we do for Public Works and Government Services, Defence Construction Canada, Correctional Service of Canada, and others, it's a disincentive to doing anything new or creative.