Canadian IT channel driving GDP

The stereotypical depiction of Canadian workers paints them as toiling out in the woods, but a new study concludes that IT channel and service revenues are outpacing the contribution of the logging and forestry industry.

Canadian IT channel and service sector revenues are expected to reach $21.9 billion by 2000, making a considerable contribution to the Canadian economy, according to a study by International Data Corporation (IDC) Canada Ltd. Sponsored by Microsoft Canada Co. and Hewlett-Packard (Canada) Ltd., the study quantifies the impact of the IT channel and service sector on the Canadian economy, focusing on employment, economic contribution and expenditure. Findings were released in December.

“Perhaps the most compelling component of the entire study was the impact of IT channel and services activity on Canadian employment. In 1998, the study finds that just over 130,000 Canadians will be employed in IT channel and services firms in Canada,” said Michael O’Neil, country manager for IDC Canada.

A preliminary forecast found that the IT channel and services sector would be responsible for creating 14,600 new jobs in Canada in 1998, representing about 5.5 per cent of all new jobs created in the Canadian economy. The study also found that IT channel and services employees earn up to 29 per cent more than the average Canadian worker.

In fact, wages, salaries and benefits account for the lion’s share of the IT channel’s total business expenditures, adding up to an estimated $4.4 billion in 1998. Other expenditures, amounting to $11.1 billion last year, include advertising, travel and entertainment, corporate taxes and rent.

Combined, such expenses create a sizeable ripple effect throughout the economy and continue to make a large contribution to Canada’s Gross Domestic Product (GDP).

“In 1995, channel and service activity…accounted for about one per cent of Canada’s GDP,” O’Neil said. “By 1997, this figure leapt to 1.17 per cent, approximately the same magnitude as all Canadian rail and air transport combined and larger than the sum of Canadian legal and accounting services or printing and publishing, or logging and forestry.

“At the highest level, the important message from this study is that this sector creates good jobs in quantity,” O’Neil said. He credited Microsoft and HP for focusing on training and certification, enabling IT professionals to become more capable and confident while encouraging Canadian businesses to invest in the solutions delivered by the channel and services community.

Steve Major, manager of Microsoft Canada’s Windows platform team, called channel partners “the glue that connects Microsoft, as a software developer, with its customers” and emphasized the importance of technical support. “With more and more of our partners providing value added services, it is critical we keep up our end of the deal by providing the right level and type of support.”

In addition to running cross-country programs in combination with HP that provide training to SQL Server database administrators, Microsoft has two programs aimed at supporting channel partners, Major said. The Direct Access program offers support and training from Microsoft technicians while the Microsoft Certified Solution Provider program guides partners towards technology solutions.

This month, HP will be launching its Covision program, aimed at providing tools to help channel partners deliver e-business technologies, solutions and services, said Pierre Montmartin, senior vice-president and general manager of commercial channels for HP. “It is evident that the Canadian technology channel offers significant economic benefits by increasing the knowledge-based workforce.”

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Jim Love, Chief Content Officer, IT World Canada

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