5 steps to a stronger, better Canadian IT sector

Canada currently ranks sixth in the world in terms of IT industry competitiveness, according to a recent Business Software Alliance-sponsored study by the Economist Intelligence Unit. That does mean, however, that we’re still a half-dozen spots away from being the reigning IT superpower.

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Last year, Canada was ranked ninth in the world on the fledgling IT Competitiveness Index, meaning that the country moved up three spaces since 2007. The IT Competitiveness Index ranks 66 countries in skill supply, innovation-friendly culture, technology infrastructure, a legal environment that protects intellectual property, an open and competitive economy, and government leadership. (Canada comes in behind the United States, Taiwan, the United Kingdom, Sweden, and Denmark.) Canada’s IT industry associations weighed in on what Canada needs to do to pull ahead — and whether our IT staffers on the ground care enough to do so.

1. Keep IT spending strong

The country came in third in the IT communications and infrastructure category, due to widespread Internet adoption and strong enterprise and consumer spending (there are 87 computers per every 100 people).

IDC Canada senior vice-president Vito Mabrucco said, “We’re a developed economy, but next to the United States, we have to have that infrastructure just to keep up. To get ahead of them, we’re going to have to make even more strides.”

The government could be one of the factors holding Canada back when it comes to IT industry competitiveness, Information and Communications Technology Council president Paul Swinwood said. “When a small business needs that first customer, it’s not going to be the government. They need to take a chance on Canadian products.”

Said Canadian Advanced Technology Alliance president John Reid: “The government needs to act as a purchaser. We have to establish those public and private partnerships.”

There is a caveat there, however, said Jevon MacDonald, who runs the StartUpNorth blog and FireStoker.com. “For the average IT manager or CIO, it really is a global marketplace so the idea that, ‘just because it’s Canadian, it will benefit us,’ is a tough sell,” he said. “It’s not prudent to look at strictly Canadian solutions. The price certainty might be there, but you need the best product for your needs.”

2. Keep track of who’s trained

Canada comes in eighth in terms of human capital, ahead of Italy, France, and Germany (but behind the United Kingdom and Australia). This could, however, always be improved, said Mabrucco, as there is always more need for skills and trained professionals. He said, “To get technology graduates, we have to get youths to enter the field in the first place.” Another important way to ensure a continuity of employment is for an increase in internship programs within technology companies.

But, when it comes to human capital, Canada might not even be doing as well as the Index says, according to Canadian Information Processing Society chairman Greg Lane. He said that the study pulled its stats mainly from 2005 and 2006, and the university scene, making it a little optimistic for a country with declining science and technology enrollment and an upcoming shortage of 89,000 IT workers. “We’re not investing enough in human capital. They’re not actually measuring the most important thing, which is the number of trained technology people,” he said.

Swinwood said that skill-building isn’t just about straight-up tech knowledge, either. “They also need sales and marketing skills so they can commercialize their products. That way, they can work with people to bring those products to market successfully,” he said.

3. Keep the piracy at bay

The survey also noted a high rate of software piracy in the country, placing it thirteenth. Intellectual property concerns are ever-growing, Swinwood said, and putting developers at ease is one way to foster more innovation and boost Canada in the rankings. He said, “We need to create a common set of rules as more and more resources go online or are available, instead of ones that go province to province or instance to instance. Companies want to know that their stuff is safe.”

Canada has a long way to go, however, said BSA vice-president of external affairs Diane Smiroldo. Copyright law in the United States, for instance, can dole out fines of $200,000 for unlicensed software, while Canada only demands a $20,000 fine.

Said Information Technology Association of Canada president Bernard Courtois: “There’s no doubt that Canada is lagging behind in copyright laws — we haven’t updated for the Internet.” The upcoming Bill C-61 — which concerns copyright law and people’s digital ownership rights — could change this, and thus have an effect on future rankings, said Courtois.

Its dependence on the United States’ economy and high corporate tax rates means that Canada comes in 14th for overall business environment attractiveness, although its low-risk operating environment and open economy are appealing. Reid said, “Our tax policies aren’t as forward-looking, and that will affect our future position in the rankings.”

4. Keep R&D local

Canada’s research and development totals placed the country 18th; private sector spending on research and development seemed relatively low as well. One problem, said Mabrucco, is Canada’s research complacency. “We’ve become too dependent on other countries to develop the new technologies — it’s always been a challenge for Canada. We need to look east and west, not south,” he said. The country could up its innovation profile, according to Mabrucco, by focusing its research and development more carefully. “We have to go where the needs are, and see what needs we can meet, as opposed to just seeing to what the United States is buying. We have to start thinking about going globally,” he said.

5. Keep it real

But do the IT managers and staffers on the ground care at all about how the Canadian IT industry stacks up globally? According to Info-Tech Research lead analyst Andy Woyzbun, “It really starts with the employer. The individuals need to know that they can and should take the initiative, and that they should take additional training and get creative. Because no one cares within business if we’re #6 or #8. We have pride as Canadians, but it’s more about how these areas are impacting IT departments.”

Companies may not have scaling the IT Competitiveness Index as their goal, but the necessary actions could benefit everyone (Canada included!). Woyzbun said that IT departments can make the most difference when they’re thinking more specifically. He said, “If you’re going to make an investment of time, it’s more worth it if you have a target in mind.”

An example would be getting a telework project off the ground — it would make the company more innovative, but would also offer concrete goals for the IT department to achieve around home office implementation and integrating mobile devices with the office network.

“It would be good if people (wanted to work to improve Canada’s IT industry competitiveness), but it’s not like people are making decisions based on whether they’ll contribute to the national bottom line,” said MacDonald. “The best way to go about doing that is for employers to create an environment where people want to succeed, and for employees to embrace what they’re good at. In a free market, strong individuals

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Jim Love, Chief Content Officer, IT World Canada

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