Challenges and Opportunities in Canada’s Digital Economy
- Talent is what drives innovation and so reskilling and upskilling initiatives need to be prioritized to help Canada stay competitive in the digital economy.
- While Canada excels in research, taking the next step to commercialize research will truly help boost Canada’s position in the global digital economy.
- Canada can help its citizens navigate the increasingly complex landscape of privacy and security online by starting early with educational programs.
Technological adoption and the development of talent across the board will be key to helping Canada excel in its digital economy. Educational initiatives that educate the public on technology will help improve awareness and hence increase technological adoption.
How do you define the digital economy?
Technology is becoming prevalent in every sector of the Canadian economy. Any economic activity or sector that is deploying technology to advance its business objective or scale its scope whether on a national level or international level, and whether they are employing mobile devices, cloud technology or computerized systems or logistics to help their business increase productivity and scale, are part of the digital economy. This extends from the commerce business to banking, e-learning, digital health and more.
What are Canada’s advantages in the digital economy and what priorities should we focus on?
It is an interesting question, but to respond to it, we must first identify what the future economy holds for Canada in the next few years. It is safe to say that we live in an era of rapid disruption where global forces are demanding our full attention, from climate change to geopolitical afflictions, to trade dynamics and supply chain constraints, cyber threats, health risks and employment prospects for Canadians.
“The opportunities are tremendous for those who leverage the full potential of the digital economy.”
The complexity of technology is advancing innovation but at the same time disrupting industries faster than economies can adjust. This complex environment is shaping us. While the stakes are high in this environment of disruption, the opportunities are tremendous for those who leverage the full potential of the digital economy.
Canada has a tremendous opportunity and has excellent positioning around the world on three fronts. The first is the digital agenda. Talent is the essence of any high-performing economy and plays a strong role in the innovation capabilities of any business or industry. Canada is strongly positioned as we have a very strong base of talent that is supported by academic institutions. We are well renowned across the world in that space.
“We need to focus on the reskilling and upskilling of our current workforce because our economy is structurally transforming.“
We have done well in developing education from K-12 right to post-secondary education and we have also done well in linking them with industry. On top of that, we have been able to attract high skilled workers from around the world. In the next few years, we need to focus on the reskilling and upskilling of our current workforce because our economy is structurally transforming.
The second aspect Canada is strong in is in research, for artificial intelligence (AI), machine learning, life sciences and more. What is going to be important over the next few years is how we take that research to market and derive economic strength to grow the economy and the number of jobs. The commercialization of research is going to be critical in the next number of years and we need policies to help that shape up in Canada.
“Canada has to look into what incentives can attract foreign direct investment while still maintaining intellectual property and jobs in Canada.“
The third area that Canada is strong in is that while we have accumulated considerable debt as a result of the pandemic, comparatively we are still strongly positioned compared to other peer nations within the G7. In addition, we have maintained our AAA rating by Moody’s, which is important for private and institutional investors. We have to come up with an industrial strategy to help us figure out which companies we want to attract and build up in Canada, and how to reach new markets and fill the gaps in terms of business opportunities. Industries like the semiconductor industry, the autonomous vehicle industry and biotechnology all present opportunities that we should look into. Canada has to look into what incentives can attract foreign direct investment while still maintaining intellectual property and jobs in Canada.
There are three dimensions that Canada can compete in on a global scale: the talent agenda, which is the essence of any high performing economy; the research agenda and our ability for us to commercialize research; and attracting quality companies to Canada to support the development of the domestic market and help open up international channels for Canada’s economy.
Is the Canadian labour force ready for the challenges of reskilling and succeeding in a digital future economy?
According to many of the studies that we have done and the recent outlook report we commissioned, we identified that by 2025, Canada will require approximately 250,000 critical skills to be filled, with skills encompassing from computer systems occupations and computer system engineers to software development. Technology skills are going to be incredibly important.
Apart from the technical skills, what is becoming critical for today’s job market are soft skills, life skills or human skills, which range from critical thinking to emotional intelligence, collaboration and communication skills.
“The focus in the future should be on the skills that we develop now whether through reskilling or upskilling.”
The focus in the future should be on the skills that we develop now whether through reskilling or upskilling. Reskilling means helping individuals within the workforce acquire the competencies to be able to transition to another sector of the Canadian economy, specifically the growth sectors. Upskilling occurs within their industries and helps bring the innovation agenda forward for tomorrow’s economy.
Our focus should be on this middle aspect of the workforce that comes out of universities with a fresh set of skills. Given that our economy is structurally transforming, we need to look into how to make sure our workforce is continually upskilling. We know very well a person’s first degree is not going to carry them for the rest of their career. Here is where academic institutions can play a critical role, by providing finishing school capabilities and micro-credentials. We need to be able to provide skill acquisition on a continuous basis to the workforce, whether that talent is in an entrepreneurial startup company or within the workforce of the economy.
How should Canada balance the opportunities of technology with the risks involved with its use?
Cyber threats and other privacy matters are top of mind and demanding our full attention at the moment. We should keep in mind recent trends and the fact that our economy is structurally transforming quite rapidly. Alberta currently has 3,000 tech companies with tremendous growth opportunities that will spend almost $20 billion for digital transformations by 2024.
“The challenge is how to continually transition the workforce to meet the needs of tomorrow’s economy,”
One of the most critical things is the reskilling and upskilling of the workforce, how the average worker will be able to succeed in an environment of change and what the necessary skills are to make that happen. The challenge is how to continually transition the workforce to meet the needs of tomorrow’s economy, knowing that our economy is increasingly digitally-led.
We need to balance privacy and security with technology continually advancing. We are sequentially letting go of our privacy as we adopt more of these technologies. This trend will be heightened in the future as technologies and services become much more sophisticated.
We have to look at two fronts to help us with this agenda of protecting privacy. One is we must recognize that the increasing sophistication of technology calls for better critical thinking among users. We have to potentially start early in schooling and provide these concepts to our students from K-12 to post-secondary to help them learn how to decipher this environment and figure out what questions they should be asking to industries or companies providing these services.
The second aspect is that we have to instill within the industry the notion of transparency. Companies should be transparent about their services, about the use of our data and the reuse of this information on a continuous basis. Instill in them the notion of proactive disclosure whether through incentives or punitive measures. It will become more and more important in the future as industry becomes more cognizant of the fact that in a free-market economy, the more businesses provide information and transparency, the more consumer adoption increases in that space.
In the future, Canada should focus on developing foundational skills for Canadians to be able to navigate the complexity of technology and ask the right questions from the providers. At the same time, we must instill the notion of transparency and proactive disclosure in companies.
Who and what would you pitch to strengthen Canada’s digital economy?
I would pitch to all policymakers whether at the federal or provincial level, but also to industry at large because ultimately, Canada’s ability to adopt technology and innovate in the digital economy is going to be critical for our global competitive advantage. Our focus should be on continuing talent development and attracting the right investment into Canada to help the domestic market grow and open international channels. At the same time, we must take our research to market and commercialize it to open up new frontiers and start larger opportunities for the economy and the job market. The decisions and policies we make today will create opportunities for tomorrow’s economy so I would encourage the policymakers to reflect on that.