The Canadian Economy in Transition Research Paper Series The Canadian Economy in Transition is a series of new analytical reports that investigate the dynamics of industrial change in the Canadian economy. [...] The level of uncertainty will depend on several factors: the nature of the functional form used in the multivariate analysis; the type of econometric technique employed; the appropriateness of the statistical assumptions embedded in the model or technique; the comprehensiveness of the variables included in the analysis; and the accuracy of the data that are utilized. [...] Applied research from these databases has investigated the importance of the entry and exit process, the extent of growth and decline in incumbent populations, the effect of mergers, and the impact of firm turnover on productivity.2 As revealing as these studies were, they left unanswered a number of questions about the nature of the firms that are contributing to these industrial transitions. [...] They investigated the extent to which improvements in the performance of any entry cohort are the result of a selection process that culls out the most inefficient entrants, or the result of a learning process that allows survivors to improve their performance relative to incumbent firms. [...] This reinforces the admonitions of those who have argued that a dynamic population of firms is the key to industrial success, and that performance should be measured in terms of progress— not in terms of the static concept of inter-industry profitability differentials.