Over half the respondents felt that the quality of local suppliers was poor. (See Chart 9.) A subsidiary of a foreign-owned company usually relies on local suppliers for materials and services. They are part of the supply chain, and the weakest link in that chain can reduce the strategic advantage of the subsidiary.
This quality concern was also expressed in relation to local employees. More than 78 per cent of executives surveyed felt that the quality of Canadian employees was poor and had a negative to strongly negative impact on their foreign direct investment decisions. (See Chart 10.)
During the interviews, many executives of foreign multinationals complimented Canada on its highly skilled managers and professionals. They considered this country's skilled workforce to be at least as good as those found in other developed countries, including the United States. However, they expressed concern about the productivity of the rest of the workforce.
These concerns about the quality of local suppliers and employees are connected to the slow adoption and implementation of new technologies by Canadian companies. (See Chart 11.) About 66 per cent of survey respondents complained about this factor and stated that it adversely affects decisions on investing in Canada. The issue was further confirmed during the interviews, with some foreign business executives saying that Canadian businesses are slower to adopt new technologies than those in the United States and Europe.