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Byline: Daryl Van Moorsel, J.A.L. Cranfield, David Sparling Advancement in biotechnology requires continued innovative activity by firms. To grow, biotechnology firms must understand the factors affecting their innovative activity. Such understanding also informs policy makers, and supports the development of policies promoting one's biotechnology sector. This study explores factors, which determine innovative activity within the Canadian biotechnology industry. Innovative activity is measured as the natural log of the number of products/processes a firm has at different stages of the innovation spectrum. A model is developed to regress this measure on several determinants of innovation. Significant drivers of innovation include: collaborative arrangements, transfer of intellectual property, firm size and age, whether the firm was in the agricultural or human health biotechnology sectors and whether the firm focused on development or commercialisation. Generally speaking, these factors all contributed to firms having more products/processes either under development, undergoing clinical trials or regulatory approval, or on the market.