This document is a summary of the main findings of the Council's research on productivity, costs, innovation, and trade. It explores why Canadian industry has performed so poorly over the past 20 years. It compares that performance with those of other industrial and newly industrialized nations. It shows that Canada's situation has been slipping relative to that of its trading partners, and that this jeopardizes future living standards. It describes the feedback between the micro world of management and labour and the macro world of inflation and exchange rates.