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SME Financing in Canada, 2002 — Appendix A

Definition of Knowledge-based Industries

In 1996, based on research undertaken by Industry Canada and the Business Development Bank of Canada, a definition of knowledge-based industries (KBIs) was developed using the Standard Industrial Classification (SIC). This has since been converted to the North American Industrial Classification System (NAICS). Since there was no single definition of a KBI, Industry Canada proposed the use of a two-tiered categorization of industries that would be appropriate for identifying industries as knowledge based:

  • Tier I – a narrow band of science and technology-based firms composed of knowledge producers; and
  • Tier II – a broad band of «high knowledge» firms that, based on measures of research and development and knowledge worker inputs, could be considered to be business innovators and high-knowledge users.

Examples of industries in the Tier I group are listed below.

Aerospace products and parts

Audio and video equipment

Cable and other program distribution

Computer and peripheral equipment

Computer systems design and related services

Data-processing services

Engineering and life sciences

Environmental consulting services

Motion picture and video production

Navigational and guidance instruments

Pay and specialty television

Pharmaceutical and medicine

Post-production and other motion picture and video industries

Radio

Research and development in the physical sciences

Satellite communications

Semi-conductor and other electronic components

Software publishers

Telecommunications resellers

Telephone apparatus

Television broadcasting

Wireless communications

Examples of industries in the Tier II group are listed below.

Adhesives

Alkali and chlorine

Architectural services

Basic inorganic chemicals

Chemical fertilizer (except potash)

Custom compounding of purchased resins

Electric power distribution

Engineering services and drafting services

Explosives

Fossil-fuel electric power generation

Heating equipment and commercial refrigeration equipment

Hydro-electric power generation

Industrial and commercial fan and blower and air purification equipment

Industrial gas

Material handling equipment

Mining and oil and gas field machinery

Mixed fertilizer

Motors and generators

Motor vehicles and electronic equipment

Nuclear power generation

Paper industry machinery

Pesticide and agricultural chemical

Petrochemical

Petroleum and coal products

Petroleum refineries

Pipeline transportation of crude oil

Pipeline transportation of natural gas

Pipeline transportation of refined petroleum products

Power distribution and specialty transformers

Printing ink

Pumps and compressors

Relay and industrial control apparatus

Resin and synthetic rubber

Rubber and plastics industry machinery

Sawmill and woodworking machinery

Switchgear and switchboard

Synthetic dye and pigment

Turbines and turbine generator units