Canada's management lags behind U.S., study says

Canada's economy is suffering because the country's managers do not stay in school long enough, said a new study on the country's competitiveness released Wednesday.

The Toronto-based Institute for Competitiveness and Prosperity said Canadian executives are not as well educated as their American counterparts.

As a result, the country's white-collar workers are not as innovative as they should be, according to a 58-page report published by the organization.

Researchers Michelle Alexopoulos and Trevor Tombre, of the University of Toronto, found that 39 per cent of Canadian managers had some post-secondary education compared to only 26 per cent of American executives.

But, more U.S. managers actually received a university degree, with 35 per cent securing a bachelor's degree and a further 18 per cent getting an advanced degree, such as an MBA.

The U.S. total — 53 per cent — was far in excess of the proportion of Canadian managers — 35 per cent — who held either a bachelor's or an advanced degree from a university or college.

That relative lack of education makes it harder for Canadian firms to remain competitive in the face of fierce competition from American companies and newly developed countries, like India and China, the report said.

"Below the CEO level, evidence is mounting that the economy is requiring greater numbers of sophisticated thinkers and those with the strong cognitive and people skills needed to lead innovation and upgrading," the report said.

Losing faith in management

To some extent, the Institute's mild censure of the ability of Canadian management fits with public perceptions regarding business on both sides of the border.

In December, for example, Americans were unenthusiastic about extending public money to the domestic automakers as fully three-quarters of survey respondents blamed management for the woes of car manufacturers.

In Canada, voters are more likely to focus on corporate greed than management practices in assigning blame for the recession.

But, the institute said, in the longer term, it is the ability of decision-makers to cope with an ever-changing economy that is more important to a country's growth than whether a chief executive officer received unwarranted bonuses.

"Management skills are critical to organizing R&D efforts, for setting priorities, developing strategies and acquiring resources," the authors said.

One culprit in the economic blame game could be Canadian universities as the country's post-secondary institutions graduate fewer degree holders than do American colleges and universities.

For example, U.S. colleges and universities graduate 1.54 business graduates for every 1,000 citizens versus Canada, which has less than one business degree holder for every 1,000 men and women in that country.

Overall, in 2005, Canada had 5.86 post-secondary degrees granted for every 1,000 people compared to 7.29 in the United States.