TORONTO– Although Canada ranks highly on most international measures of PC penetration and broadband connectivity, the nation’s lagging investments in information and communications technology (ICT) are dragging down its business productivity, increasingly hurting its global competitiveness and lowering its standard of living.
That consensus emerged from telecom industry execs, academics, government officials, and other speakers during a pair of afternoon panels at the Canadian Telecom Summit on Tuesday afternoon. Despite a wide range of different perspectives and proposed solutions, the panelists generally agreed that Canadian companies must boost their ICT spending substantially to make better use of broadband technology and close the nation’s yawning productivity gap with the U.S. and other developed Western countries.
But the two panels produced little consensus on how to solve the knotty ICT adoption and broadband usage problem. Instead, the sessions produced a lot of head-scratching about why more Canadian firms aren’t investing in broadband and other ICT upgrades and what it will take to induce them to do so.
“That’s the $64 million question,” said Dr. Leonard Waverman, dean of the University of Calgary’s Haskayne School of Business. “We simply don’t understand why businesses aren’t spending.”
Bernard Courtois, president and CEO of the Information Technology Association of Canada (and former Bell Canada exec), agreed. “The solutions aren’t obvious,” said Courtois, whose group studied the problem about a year and a half ago. “It’s not clear that a magic wand will solve it.”
On the first panel, “International perspectives on ICT Strategies,” Waverman presented the results of his latest Connectivity Scorecard. The annual scorecard, started two years ago, ranks countries on their digital literacy, business productivity, and economic growth. In the 2010 rankings, Canada finished a respectable ninth among the 25 developed Western nations, although down two slots from last year’s index and behind the U.S. and most Nordic countries.
Waverman said Canada scored well for its high PC and broadband penetration rates, as well as its strong human capital and fast average data download speeds. Canada fared less well in the rankings on online usage and digital skills. It also ranked relatively poorly for business investment in ICT equipment and software. But, Waverman stressed, that’s not the fault of the nation’s telecom sector.
“It’s not Canadian telecom firms that are lacking,” he said, noting that the sector “has one of the highest capital intensities in the developed world.” Instead, he said, ‘the problem is in the firms. Canadian businesses invest less in ICT hardware and software.”
Speaking on the same panel as Waverman, Courtois agreed that the big problem is the adoption and use of ICT by Canadian companies, particularly small and mid-sized firms. While Canadian firms that operate internationally hold their own in ICT spending, he noted, firms that operate strictly within the nation’s borders do not. “In many cases, mid-sized and small companies didn’t even know what they didn’t know,” he said.
Dr. Catherine Middleton, who holds the Canada Research Chair at Ryerson University’s Ted Rogers School of Management, said Canada should consider the lead taken by Australia in building a next-generation broadband infrastructure. Known as the Australian National Broadband Network, the $43 billion (Australian) project calls for the installation of a fiber-to-the-premises (FTTP) network serving 90% of the nation’s population with data transmission speeds of 100 Mbps. The project is scheduled to take eight years.
“This will be a single network that anybody can deliver service over,” said Middleton, who is studying the detailed project. “I think there is an awful lot to be learned from Australia. It’s a place worth looking at.”
But, while Middleton and a few other speakers urged that Canada ape Australia, France, New Zealand, Singapore, and other nations now investing heavily in building or subsidizing next-gen broadband networks, Waverman and several other panelists threw cold water over the idea. They argued that it would be a big mistake to sidestep the private market and sink massive government funding into one broadband technology.
“I believe in planning,” said David Gross, a partner in Wiley Rein who was the U.S. co-ordinator for international communications and information policy for seven years under former Pres. George W. Bush. “But if you plan too much, you’re likely to miss what you’re trying to achieve… I fear it’s a fool’s errand.”
Dr. Gerri Sinclair, executive director of the Centre for Digital Media, called on the federal government to convene a cross-jurisdictional digital literacy task force immediately to address the nation’s digital literacy gap. Speaking on the second panel, “Building Digital Canada,” she contended the country’s lack of a digital literacy policy is “really hampering us as individuals,” hurting the delivery of government services, and exacerbating the business productivity problem.
“We must go beyond being mere consumers of digital content and be able to create and communicate with it,’ she said. “Industry is not really stepping up to the plate. It’s more reactive.”
Peter Lyman, a senior partner at consulting and research firm Nordicity, said Canada should do more to foster its media and digital content industries and promote them abroad. Among other things, he urged the federal government to develop a DTV transition plan for next summer. “We haven’t even determined how we’ll implement that except for the CRTC setting the deadline,” he said.
But, even in the “Digital Canada” session, the debate kept turning back to the critical ICT issue. Most afternoon panelists pressed for new ways to spur broadband usage and encourage ICT adoption by businesses, not build next-gen networks.
“I fundamentally think the real issue is about ICT adoption and not just in the schools,” said Jonathan Daniels, vice president of regulatory law for Bell Canada. “Let’s look at why Canadian businesses aren’t adopting it. The infrastructure is there but they’re not using it and not creating with it.”
Alan Breznick is a Toronto-based senior analyst at Heavy Reading, part of the Light Reading Communications Network at TechWeb. He helped cover the 2010 Canadian Telecom Summit for Cartt.ca
