Despite valiant efforts of the business community and the public sector to enable the small and mid-sized business sector and modernize government, Canada has slipped to 13th position from ninth last year in the Economist Intelligence Unit/IBM 2007 global e-readiness rankings. Taking first place was Denmark, followed by the U.S. and Sweden, which were tied for second place.
Canada, the study says, didn’t do as well this year because of a slightly lower social and cultural environment score, and a lower score for government policy and vision than other developed-market peers.
And while the decline is also due to methodology changes this year, the introduction of new categories and gains by less advanced countries, Canada clearly needs to improve in the innovation arena, says Matthew Ivis, governmental programs executive at IBM Canada.
The country scored only four out of 10 on innovation. Although it got 8s and 9s on other metrics in the social and environmental category, the innovation ranking brought down the overall average for the social and cultural environment section to 7.2 out of 10.
Despite its low scores, the study predicted that Canada will have one of the most attractive business environments in the world within the next five years due to political stability and support for foreign investment, private enterprise and competition. Still, the country needs to leverage its strengths more by applying technology to the country’s most pressing social and economic problems, said Ivis.
“We need to focus on areas where we can and should be world leaders, such as healthcare,” he said.
There are also many opportunities related to the application of technology in the energy and environmental industries, as well as in government to continue modernization, he said. That’s where innovation comes in: it’s not so much the invention of new technology as the application of that technology in creative new ways to solve existing problems, he said.
Canada needs to focus more on developing a skilled, multi-disciplinary workforce that can apply this technology across different sectors, he said. “Most IT people aren’t in the IT sector, they’re in other sectors applying the technology to become more innovative and efficient and productive.”
Canada’s ranking was also affected by the study’s elimination of fixed-line telephones this year and a greater concentration on mobile penetration, said Ivis.
“That, in itself, would have hurt Canada’s ranking because we have a very high fixed line legacy and maybe a lower mobile penetration looking across a number of countries.”
Canada’s low mobile penetration rates were also cited in a recent SeaBoard Group study, which found the country’s wireless penetration to be the lowest in the industrialized world.
While the ranking might not be great news for Canada, it does indicate advances in developing countries. Countries such as Chile (30th) and Romania (45th), for example, were rewarded for tangible commitments in terms of national infrastructure initiatives and clear stimulus programs. Even Nigeria, which scored poorly in the overall policy and vision category, was commended for its digital development strategy.
One of the challenges Canada faces in improving its ranking, and thus long-term economic position, is the fact that most businesses in this country are small or mid-sized, a sector that has not yet adopted IT to the extent embraced by larger firms, said Ivis.
That’s changing, though, he added. “I think as in any area the benefits need to be proven out to demonstrate ROI. I think that’s increasingly being demonstrated and adoption rates are going up. It has been a perennial focus of government and the business community because it’s such a large group.”
To kickstart that change, Industry Canada named Todd Boyle Canada research chair in integrative information technology diffusion in small and medium-sized enterprises at St. Francis Xavier University Wednesday.
Boyle is one of 98 Canada Research chairs appointed yesterday as part of an investment of $83.7 million, including $10.4 million from the Canada Foundation for Innovation.
His research, he said, will look at the challenges SMEs face in adopting enterprise systems.
“One of the biggest ones is the lack of dedicated IT in-house,” he said. “I’ve been to companies where the person in charge of manufacturing is also the IT person who set up all the desktops as well. That’s one of the major challenges — adopting the strategic view of IT systems and technology versus (seeing it) more as a cost of doing business.”
Boyle said SMEs can improve their long-term prospects by taking advantage of best-of-breed practices.
“It helps them to identify waste in their processes and eliminate it,” he said. “What that means is they can essentially do more for less.”
That’s particularly important now with the high Canadian dollar and scarcity of raw materials, he said. But before buying anything, an SME needs to have a rock-solid business case, he warned.
“You just can’t adopt the latest and greatest technology; it has to be in line with the business goals,” he said. And make sure to have all ends covered, so to speak, he said.
“Say you’re a medium-sized company and you want to have an online presence. That’s fine, but you have to make sure you can process it and your backend systems can actually handle the change.”