Use vouchers to stimulate ICT adoption: ITAC study

Canada should follow the lead of many European countries and introduce a voucher program and other direct grant-based measures to entice small and medium businesses to adopt information and communications technologies (ICT), states a new report from the Information Technology Association of Canada (ITAC).

The 31-page paper, Leveraging ICT Adoption: What Can Work for Business, is the latest in a long line of advisory reports stressing the need for government incentives to accelerate ICT adoption to stimulate Canada's lagging productivity.

Tax incentives, including accelerated depreciation for ICT capital assets, have their benefit, notes ITAC, but other policy instruments are needed as well.

"There is a strong feeling in the industry that a different policy mix of the incentives is required to markedly improve the adoption and use of ICTs," particularly for SMEs, states the report, authored by Jacek Warda, managing principal, JPW Innovation Associates Inc.

One such incentive is innovation or technology voucher programs, like those used in Austria, Belgium, the UK, Denmark and Finland. Warda says voucher programs were "designed with administrative simplicity in mind" — averaging about 30 minutes of paperwork for recipients. Awards are generally small, between $770 and $11,550 and used to purchase technologies as well as services to help companies assimilate new technologies, including education and training of employees and developing technology adoption plans.

"The most promising programs with respect to ICT adoption are based on offering firms an access to new technology and related expertise by providing low cost subsidies or vouchers by government for purchasing such technology," he states.

The report details what other OECD countries are doing to encourage business investment in ICT, including tax incentives, ICT grants and subsidies, technology vouchers and special ICT-boosting infrastructure programs.

The paper also stresses the importance of public procurement. "Government can be an influential customer and partner for the private sector through its contracting out of research and procuring innovative products and services from business."

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