Canada’s ICT sector falling behind: government report

Canada’s ICT sector is the smallest in the G7 and is continuing to fall behind other developed nations, according to a government report obtained by The Logic.

The report was prepared in advance of the Digital Industries Economic Strategy Table’s first meeting last Fall. That group, which includes Shopify CEO Tobias Lütke as the chair, was convened by the government to boost Canada’s tech sector.

In the source documents obtained by The Logic, some worrisome industry trends are identified:

  • Since 2011, Canada’s ICT sector has posted slightly weaker annual growth than the total economy;
  • The ICT sector is dominated by small firms (98.6 per cent);
  • Average R&D spending fell slightly in the ICT sector between 2008 to 2013 (-0.4 per cent) and 2014 to 2016 (-0.7 per cent);
  • Canada’s share of the global ICT market is shrinking as exports drop off (Canada ranked 16th out of OECD countries in 2016, down from 11th in 2014).

Other concerns outlined in the report include Canada’s frail infrastructure to help startups grow. Despite showing some promise in the AI sector, Canada is far behind other countries such as USA and China in terms of filing patents. Much of the R&D spending that is invested in the country is by foreign firms that extract the intellectual property to their home country.

Read the full report on The Logic, which requires a subscription.

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Jim Love, Chief Content Officer, IT World Canada

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