Archived — Introduction

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In the March 3, 2010 — Speech from the Throne the Government of Canada committed to "launch a digital economy strategy to drive the adoption of new technology across the economy. To encourage new ideas and protect the rights of Canadians whose research, development and artistic creativity contribute to Canada's prosperity, our Government will also strengthen laws governing intellectual property and copyright". This commitment was reinforced in Budget 2010 where the Government of Canada committed to "develop a Digital Economy Strategy that will enable the ICT sector to create new products and services, accelerate the adoption of digital technologies, and contribute to improved cyber security practices by industry and consumers". The purpose of this paper is to seek advice that will shape a multi-year digital economy strategy for Canada. The world is going digital, and the evidence is all around us.

Digital technologies are ubiquitous, enabling all sectors across the economy to be innovative, productive and competitive. The Internet and the proliferation of digital information and communications technologies (ICT) have given rise to new products and services — changing the way we live. The way our children learn and study, how we communicate with each other, how medical professionals keep us healthy, how we conduct research and how we conduct business across all sectors — all have been fundamentally transformed by digital technologies.*

What is the Digital Economy?

The digital economy is the term used to describe the network of suppliers and users of digital content and technologies that enable everyday life. Digital content and technologies are ubiquitous and critical to almost every activity in our economy and society. These applications enable businesses to be innovative and productive; help governments to provide services; and allow citizens to interact, to transmit and to share information and knowledge.

The relentless pace of technology means that every day there is something newer, faster, better. To succeed in the global economy, Canada must keep step as the world races forward.

2010 Speech from the Throne

This digital revolution is not only coming from scientists, businesses and governments, it is also being driven by the users of these technologies, including the creators of digital content and consumers. Today's consumers — young and old — are demanding instantaneous information, products and services. This demand is growing, opening up new markets and creating tremendous opportunities for Canada.

Canada is responding to the opportunities presented by the digital economy. But so are other countries like Australia, the United Kingdom and the United States. Fortunately, Canada has a strong foundation from which to seize these new opportunities. We benefit from the presence of a number of established companies, excellent research institutions and an educated workforce. However, the evolution of the digital economy is relentless as digital innovations become embedded in our lives at a rapid pace — Facebook was made public in 2006 and the iPhone was launched in 2007. We must strengthen our focus to make Canada more competitive and prosperous, and ensure that Canadians can thrive in the future economy.

More and more each day, every sector of our economy and our society comes to rely on digital technologies. From the public and private sectors, to non-governmental organizations, academia and volunteer organizations, to students, consumers and citizens — we all have a vested interest in a dynamic and flourishing digital economy. A strong digital economy will be the backbone of Canada's future prosperity and success. Consequently, we all have a role to play in shaping the future of this key part of our economy and our lives.

Canada needs a strong, globally competitive ICT sector that supplies high value products and services, which increase productivity and competitiveness in every sector of the economy, and exports those products and services abroad. Canadian businesses, institutions and individuals must have the skills needed to adopt and apply digital technologies with confidence; and businesses and consumers must have trust in transactions that take place in the online marketplace. Canada needs a world-class digital infrastructure, on which Canadians will be able to locate, utilize and share Canadian digital content.

Government can support the provision of digital skills and tools needed to compete, thrive and innovate in the digital economy by developing sound economic framework policies, ensuring competitive corporate tax rates and creating a positive foreign investment and research and development (R&D) environment. Policies and programs must be adjusted, where appropriate, to maximize Canadian success in the digital economy. Governments and public sectors need to demonstrate by example as being model users of digital technologies.

Businesses will need to be attuned to global opportunities, continuing to adapt, to innovate and to compete to win. The private sector will be increasingly exposed to fierce global competition, and will need to take the lead role in driving the growth of Canada's digital economy.

Our goal for Canada is to have a world-leading digital economy; to be a nation that creates, uses and supplies advanced digital technologies and content to improve productivity across all sectors.

"Competition matters. It brings dynamism to our economy. It means good jobs for our citizens. It is not merely an economic concept. Being open to competition serves Canada's national interest".

Competition Policy Review Panel, 2008

Universities, colleges, research institutions and businesses will need to work more closely together to continue to conduct and commercialize research, moving ideas from university and college labs into the marketplace, where Canadians and the global economy can benefit from their discoveries. Recognizing this, Budget 2010 provided an additional $135 million for the National Research Council (NRC) Technology Cluster Initiatives program to develop networks of innovative businesses, NRCscientists and communities, levering Canada's investment in research into economic and social benefits for Canadians.

There is a general consensus as to the importance for Canada to improve its overall productivity in the face of increasing competition. Businesses must capitalize on the productivity-enhancing benefits of digital technologies and opportunities to create new products and services. Consumers and citizens must be able to obtain public services and to participate in online interactions while protecting their personal information.

In the last year, industry leaders, creators, businesses, academia and Canadians have gathered to discuss some of the key aspects of the digital economy such as digital media, copyright issues, and requirements to ensure a secure online marketplace. Discussions at these venues — in particular at the June 2009 Canada 3.0 Conference in Stratford and the Canada's Digital Economy: Moving Forward forum held in Ottawa — have underscored the crucial importance of a digital strategy for Canada's future. Stakeholders emphasized that action was essential from all stakeholders and that the Government of Canada must play a leadership role to galvanize all sectors of the economy in order to achieve the shared goal of making Canada a global leader in the digital economy.

The Government of Canada recognizes the importance for Canada to have a strong and sustainable economy. Advantage Canada: Building a Strong Economy for Canadians laid down a vision for a prosperous Canadian economy, today and in the future. Given the critical role that technology and innovation will play in our future prosperity and quality of life, the 2007 Science and Technology (S&T) Strategy — Mobilizing Science and Technology to Canada's Advantage (hereafter referred to as the S&TStrategy) invested over $7 billion in fostering innovation through research and identified the ICT sector as one of four priority areas.

But more needs to be done. The Government of Canada is building on the foundations of Advantage Canada and its S&T Strategy to develop the digital economy of the future. Budget 2009 provided funding to extend broadband access to rural and remote communities. The government is updating policy and legislative frameworks for e-commerce, most notably on copyright reform, anti-spam law and privacy amendments.

Provincial and territorial governments have also responded with actions that range from the formation of new provincial departments focused specifically on innovation, R&D and advanced technologies, to increasing broadband access and upgrading network infrastructure. Some provinces have instituted tax credits for the ICT sector, while others have dedicated venture capital pools aimed at stimulating business innovation.

The private sector is also investing considerable sums in Canada's digital economy, notably in digital media, digital infrastructure and R&D. But more can be done to improve the sophistication, accessibility and affordability of Canada's digital infrastructure. More investments will be needed to provide online access to Canadian content, build next generation networks, and acquire the skills and capabilities that will sustain Canada's future prosperity, quality of life and competitiveness.

Key challenges that we face in moving forward include: the adoption of digital technologies in all parts of the economy; the competitiveness of Canada's digital industries; the state of our digital infrastructure; our ability to create Canadian content for a global marketplace; and ensuring that Canadians and businesses have the skills and knowledge to participate in Canada's economy of the future. These challenges must be addressed with coherent and collaborative action to help increase Canada's productivity and ensure our future prosperity.

Your Views

The Government of Canada invites your views on the goals of a Canadian digital economy strategy, the concrete steps needed to reach these goals and how governments, the private and not-for-profit sectors can best collaborate to create a strategy for future success.

This paper proposes a set of key challenges to meet, describes what has been done to date and poses questions on what needs to be done in the future.

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* Digital technologies is another name for ICT. For the purpose of this paper, digital technologies and ICT refer to the same set of technologies and will be used interchangeably. Examples of digital technologies used in our everyday lives include devices such as BlackBerry smartphones, global positioning systems (GPS), music and video playing systems, television-on-demand and e-book readers.


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