Digital trade walls could impact IT services, CBOC says

Without a revamped digital trade strategy, Canadian enterprises will find it difficult to compete in the global economy, according to a new Conference Board of Canada paper.

The board’s report, authored by Danielle Goldfarb, the associate director with the International Trade and Investment Centre, argues that the digitization of information has become crucial to international trade and investment. For government leaders, this means looking beyond traditional tariffs and policies that restrict data flow and services.

The paper cites trade in global IT services, which grew 150 per cent between 2000 and 2009, as an example of services that have recently become internationally tradable. Goldfarb said the ability to send information instantly around the world has made it much easier to coordinate regional and global value chains.

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“Businesses can break down jobs into more finely grained tasks, which wasn’t really the case in the past,” she said. This means that IT departments can break down their supply chain into smaller tasks and perform each in a location that can provide it most efficiently, Goldfarb added.

“In the digital world, when you stop the information flow, you’re limiting the potential for business,” she said, adding that Canada should also be working closely with its trading partners to better facilitate the free flow of information.

The ability for enterprises to do this will be restricted if the country does not improve broadband connectivity, lift restrictions on foreign investment in communications technologies and digital content, and scrap “buy local” requirements. The paper also advises the next Canadian government to put a priority on investing in digital infrastructure and tech-related education programs.

John Reid, president and CEO of the Canadian Advanced Technology Alliance (CATA Alliance), said the key to ensuring Canadian businesses can better compete in the global digital economy is all about branding. He said CATAAlliance will be pressuring the federal government to create a Chief Marketing Officer position, which will be tasked with encouraging businesses to adopt and leverage digital technologies.

“I predict a CMO for Canada will be adopted,” he said, adding that he would not be surprised to see the position created within the next 12 months.

A major role for a CMO would be to advocate the importance of broadband adoption and networking infrastructure in Canadian cities from coast to coast. Each city can build to its strengths and the CMO can amplify those strengths, Reid said.

For example, widespread and affordable access to high-speed Internet will allow small and large businesses to create their R&D teams by linking experts around the globe together through telepresence technologies.

“Just as other countries have copied our SR&ED tax credit system, we’re going to have to embrace what others are doing,” Reid said.

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