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Canada's digital foundations are solid but there's a spark missing to truly place it at the top of digital readiness. How does the country fare regarding infrastructure, economy and ICT skills?
Content:
Disclaimer: Usually, I will use the DESI report as a framework for my articles. Since Canada is not covered in the DESI index, this overview will be structured slightly different, however, I will try to include the general topics such as basic digital know-how, ICT workforce, infrastructure, business digitalization and digitalization the public sector.
The Strengths: ICT is crucial for the economy
Strong infrastructure
Overall, Canada offers Broadband at 50/10 Mbps for 89,50% and is especially successful with mobile LTE with an overall coverage of 99,50%, 97,40% in rural communities and 88,80% on major transport roads and highways (source: Government of Canada).
According to Data Reportal, the median mobile internet connection speed is 72,87 Mbps and the median fixed internet connection speed is 97,51 Mbps. Both variables have increased in 2022.
No lack of ICT employment opportunities
"Employment growth in the ICT sector has been outpacing the overall economy for many years"
(Source: ised-isde.canada.ca, PDF). Every second ICT employee has a university degree (roughly 15% more than in other Canadian industries).
Canada's ICT sector makes up 5,3% of the overall GDP. Furthermore, more than 20% of all service exports are from ICT services. The investment in ICT business has grown by 9,1% in 2021 and made up a whopping 44,1% of the economy. It's clear that Canada's economy sees the value and need to further invest in ICT sectors and develop their own digital business models.
According to Statistics Canada, one third of all Canadian businesses had at least some eCommerce sales in 2021 which is an increase of 8% from 2019. As is often the case, large companies are more likely to make eCommerce sales (38%) but medium (36%) and small businesses (32%) are close behind which is rather unusual on an international level as SME often trail behind the bigger companies when it comes to digital business models.
85% of enterprises use ICT and 53% use company-wide computer networks. The Internet of Things is being used by 22,2% which seems pretty high for a technology trend that is often planned but not implemented.
On top of that, 40% of all business with ICT specialists employed also provide ICT training for further development. Large companies are twice as likely to provide such trainings than small companies.
Increased use of digital public services
The pandemic caused more people to access public services via website (source: Government of Canada, Canada's Digital Ambition 2022). Compared to 2018, citizens contacted the government 16% more via website in 2020 with overall 44% using websites opposed to 28% using the phone and only 14% using offices or service encounters. Of course, with the survey being taken in the midst of the pandemic, it's obvious that few people would contact the government in person, it will be interesting to track this development in the following years to see numbers outside of the extremes.
The Weaknesses
Rural infrastructure is spotty
Even though the overall broadband coverage looks good, rural areas are far behind with only 53,40% coverage according to the Government of Canada. This means that people but also companies outside of bigger cities are less connected and have slower internet all in all.
Lack of ICT skills
Despite Canada's ICT economy being comparatively strong, only 3,8% of its workforce are ICT workers (source: ised-isde.canada.ca). As with many countries across the globe, Canada suffers from the skill-shortage in the IT sector. Employers see a lack in:
- basic digital skills (5%)
- computer science (16%)
- information technology (10%)
- data science and analytics (14%)
(Source: cdhowe.org)
Given that more than half of companies don't offer trainings (even less in medium-sized and small companies), this could partially be solved if companies and organizations offered more development options for their staff.
According to C.D. Howe, demand for digital skills in digital-oriented jobs grew by more than 80% from 2020 to 2021, implying heavily that the pandemic has pushed companies and organizations to transform and digitize.
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Businesses are slow to adopt digital technologies
Statistic Canada's report shows that despite being one of the most used ICTs, cloud computing is used by only 45,3% of surveyed businesses. Even more so, only 3,7% use software and hardware that leverages artificial intelligence. Despite the overall solid digital framework, most Canadian companies seem to be hesitant to adopt modern technologies. This could change however, since the adoption rate of AI grew by an impressive rate of 20% in 2021.
Digital public services need more user-friendly options
In the official government report, Canada states that its departments and systems need an update, since "many IT systems and infrastructure components are outdated, complex and costly to maintain". Furthermore, surveys found out that the public deems the offered services too time-consuming and tedious with 68% of all people surveyed citing one or more problems with digital services.
In an international survey, Canada's citizens used digital public services a lot less (30%) than the average (46%).
Summary: Canada needs to use the digital momentum
Looking at Canada's statistics and surveys, I am reminded of Germany: a comparatively solid infrastructure, a strong digital industry, not quite enough ICT workers and a big gap between requirements and realities of the digital public services. As such, Canada is well-equipped not to lag behind but still misses out on being truly leading in the field of digital transformation and innovation.
Especially the lack of cloud adoption in businesses paired with the low interest in innovative technologies is a potential hurdle for the digital future. Likewise, too few companies offer ICT training internally but complain that their employees lack digital know-how. One could assume that these two things are connected.
On a positive note, the use of eCommerce as well as the role of the ICT industry in the overall Canadian economy shows that the country is aware of how crucial digitalization is for a long-term business impact and has areas in which companies are much more advanced than in other countries. If especially SME will be as forward with other digital business models and solutions as they are with eCommerce, they might become standouts on a global level.
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