Industry Canada pushes for ICT to become national priority; identifies $455M in spending

By Debbie Lawes

A more aggressive adoption of information and communications technologies (ICT) – fuelled by at least $455 million in new federal funding – could reverse Canada’s lagging productivity and competitiveness in world markets, according to Industry Canada. Assistant DM Michael Binder has been meeting with industry associations and other stakeholders to solicit feedback on a plan to return ICT to the top of Canada’s economic agenda, as it was in the late 1990s.

“We’re worried that many nations are overtaking us, particularly the US. We’re not investing as much as we should in the ICT sector — in R&D, network architecture or security,” says Binder, who heads the Spectrum, IT and Telecommunications bureau. “I don’t think there’s an appreciation of how important this sector is. People keep talking about biotech and nanotech as other important sectors, but they are emerging sectors… They’re not as enabling for the whole economy as ICT.”

In all, Industry Canada has identified six areas of the “network economy” that require funding over the next five years: CANARIE’s CA*net 4 research and education network ($100 million), ICT commercialization ($50 million), e-economy and sectoral e-business program ($40 million), government ICT research ($25 million) and participation in global supply chains by small- and medium-sized enterprises ($15 million). All funding would start flowing in 2006-07, except for CANARIE which is seeking renewal in 2007-08 when its current $100-million funding envelop expires.

The sixth area would put broadband connectivity back in the national spotlight. Industry Canada suggests the lion’s share of new investment – about $225 million – be used to improve access and adoption of high-speed Internet and e-business solutions. It says significant gains made over the past eight years have failed to close the connectivity gaps – 1,700 communities still don’t have broadband, and adoption is lagging among certain groups, including seniors as well as low income and less educated individuals.

Most of this $225 million would go to renew three programs that are set to expire in March 2006: SchoolNet, Community Access Program (CAP), and Broadband for Rural and Northern Development (BRAND).

Binder cautions that the proposed funding levels are tentative. “We are now doing some systematic review and analysis and surveying as to what our future community access and adoption program might look like. These are ballpark figures that we think are a minimum required to sustain those programs.”

Canada still scores high internationally when it comes to broadband connections, ranking second overall in 2004 on The Conference Board of Canada’s “Connectedness Index”. ICT also scores high on the productivity index, contributing to 62% of Canada’s productivity growth over the past five years. Likewise, ICT is still Canada’s top R&D driver, accounting for 40% of total private sector research, or just over $5 billion. The ICT sector also employs more than half of the country’s R&D scientists and engineers.

“I like to remind everybody that companies like Nortel, Research in Motion, Bell and Telus invest a huge amount in research and I’m always dismayed at the lack of recognition of the importance of those investments in our economy,” says Binder.

However, when it comes to exploiting the Internet and ICT to improve productivity, Canada falls to 11th spot. For example, Canada’s ICT sector, as a share of the total economy, is only half that of the US - 5.6% vs. 11.7% in 2003. Earlier this year, Bank of Canada governor David Dodge tied the country’s weak productivity to slow adoption of new technologies and business practices by the private and public sectors.

Binder has already met with representatives from the Canadian Chamber of Commerce and Cisco Systems, who co-chaired the Canadian e-Business Initiative last fall. He will also meet with the Information Technology Association of Canada, CATA Alliance and Canadian Manufacturers and Exporters, among others, to solicit their ideas on Industry Canada’s action plan.

Several other countries have recently announced national ICT strategies, including the European Union, the UK, Australia, South Korea and Finland and Industry Canada suggests this country do the same. It is calling for the creation of a national e-economy council, chaired by Industry minister David Emerson, which would engage all sectors in driving ICT adoption.

As part of this process, the department has developed a “must do” list to ensure Canada’s economy and society benefit from ICT. The action plan proposes new regulatory frameworks for ICT, more support for ICT businesses, more funding to accelerating ICT access and adoption and funding for ICT commercialization, CA*net 4 and government ICT research (see box).

“I’m advocating for us to do a national strategy, but don’t mistake this as a government policy,” says Binder. “It’s a work in progress. It’s something we’re internally developing. It may go. It may not go.”

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