Vision for a Digital Canada

Summary

As Canada moves forward in the digital world, we must take measures to ensure that current and future generations are able to compete, create and collaborate. Policy is driven by economy, culture and technology, and our citizens must be equipped with the skills and technologies to define the next stages of growth in Canada. With this in mind, the Mobile Experience Innovation Centre has defined a set of recommendations and objectives for the National Digital Economy Consultation Process. Addressing the themes defined by Industry Canada throughout the consultation process, MEIC's submission was developed alongside industry and academia.

Submission

Introduction

The global digital industry, like any new and disruptive megatrend, has drastically transformed much of our culture, business and technological innovation. Currently, wireless technologies are leading the next revolution. We are rapidly moving towards an era where everyone will be a mobile entity moving through a robust, interconnected landscape, with capacity for monetary transactions, services, content and communications. Mobile capacity is a key factor for growth across industries, being the technical, organizational and human thread that will link all activities in coming years. It is the platform of globalization — enabling new forms of business and experience.

As well, the global digital media sector is one of the fastest–growing industries in the knowledge economy, with a projected valuation of US $2.2 trillion in the next five years. Expected growth is targeted at 22% from 2008 to 2012. The commercialization of digital media research and the production of innovative entertainment content present significant market opportunities for Canada to gain a global leadership position. The recent Science and Technology Innovation Council 2008 State of the Nation report emphasizes the key role that information and cultural industries ($1.7 billion) and computer system design and related services ($1.2 billion) play in R&D. To achieve this, Canada urgently needs to take action in creating a homegrown digital economy built on our strong, technology driven foundation. Small firms and start–ups need bootstrapping. We need to build on existing capacity, capitalize this industry and provide the capacity to keep firms in Canada as they grow. Similarly, large organizations have to adapt in all sectors from the obvious high tech and communications industries to banking, transportation, etc. and including public sector and, particularly, government.

Innovation in this sector is fuelled by convergence across content, services and platforms, through the continuous upgrading of the devices connecting us to the digital world, and by entrepreneurs who identify consumer needs and develop products and services to meet those needs. It requires very fast market intelligence, strategic foresight, fast prototyping (agile development) and usability as well as an entity able to take risks in order to propel the consortium of companies forward. Development is no longer staged — testing of new products needs to happen IN the market place as others come on stream.

The following recommendations for Canada's National Digital Strategy were developed with the above themes in mind, and will focus on the four pillars of success in the new Digital Economy: Infrastructure, Imagination, Innovation and International.

Infrastructure

The support framework for facilitating and enabling all forms of new digital innovation increasingly resembles a form of lightweight architecture that combines a much needed regulatory environment with enough resilience to adapt to technological, cultural and economic changes. Infrastructure development is key, and for the National Digital Strategy the following points are recommended:

1. Increasingly, public access to high–speed broadband internet is a requirement for regional economic development and success. With Canada's large geographic area, ensuring consistent and quality connectivity has proved challenging. We propose that a Federal–Municipal Connectivity Matching Program be established to assist in the rural–urban divide, wherein an opt–in expense–sharing program for providing high–speed broadband is developed, so that installation costs may be shared equally between the federal government and the municipal region. Incentives and tax credits may be provided to the relevant regional ISPs to ensure subsidized and/or wholesale costing.
2. Future monies from all spectrum licensing auctions must be re–invested into the mobile and wireless industry to ensure continued innovation and growth. Any revenues from spectrum licensing auctions should be reinvested in sector–driven R&D clusters, digital literacy programs, next generation entertainment, professional development and infrastructure. Tax credits should be granted to wireless operators who purchase spectrum licenses and operate within Canada.
3. Over the past decade, global examples of R&D and sector–driven clusters have become the benchmark for applied innovation and commercialization, supporting major corporations, academic institutions and SMEs. Canada must develop a cohesive Innovation Cluster Strategy which draws upon existing regional strengths in research, economic development, talent and culture, and develops potential sectors for future growth. Working with Public–Private Partnership models, investing in agile pilot projects across regions, and encouraging cross–sector collaboration is critical to Canada's digital success. Successful networks such as CECR and NCE must be continued and extended support given to provide more opportunities for Canadian innovation growth.
4. Investment and support of high–bandwidth infrastructure for future university and training research should be at the forefront of the development of a Canadian digital talent pool. The existing networks, such as ORION and CANARIE, have been instrumental in connecting Canada's leading researchers and innovators, and this must have continued support for the next generation of R&D. Accessibility, equalized upload and download speeds, and encouragement of private sector participation should be priority items.
5. The current model of spectrum licensing and allocation draws upon a narrow band of what is available for communications technology. Based upon economics of scarcity, in which licenses are withheld and auctioned off on a biannual or tri–annual basis, we will soon experience a bottleneck effect. This bottleneck will not only effect consumer and business connectivity, but also prohibit new operators from providing real competition in the Canadian telecom sector. New approaches to spectrum licensing should be explored. Following the US model and FCC regulatory environment, other frequencies of spectrum, such as White Space, which was previously used by broadcasters for analog television signals, and Ultra WideBand, used for Personal Area Networks and Mesh Networks, should be opened up for service and product innovation. R&D must be funded through public and private sector initiatives to develop new forms of infrastructure, devices and content.
   
   Investment in publicly available (free or subsidized) wireless internet in civic–focused spaces must be further developed. Libraries, all government buildings, schools, community centres and other locations should be provided with subsidized services or matching funds to provide highspeed access to the public.
6. Participating in the digital ecosystem often translates into agile approaches and continually disrupted markets. As such, training is an ongoing endeavour. As well, digital and mobility are infused across every aspect of our daily lives, and will continue to transform our businesses, our content and our behavior. Skills development in the creation, service and application of digital technology and media is at the core of success and survival for any nation in the digital future. Knowledge–based economies require highly skilled technologists, designers, creators and entrepreneurs to generate value, benefit and prosperity. Emphasis must be placed on providing digital–focused educational initiatives in a lifelong basis, through formal education, professional development and just–in–time training. These initiatives and programs should be subsidized through tax credit programs and supported through job creation programs.
7. Government services, programs and communications should all be conducted digitally, as a cost–cutting measure as well as an efficient means for citizens to gather information, pay taxes, received services, submit applications, etc.
8. Foreign Investment regulations should be re–assessed to encourage larger capital pools for infrastructure builds over the next decade. The regulatory environment regarding ownership and control should be adapted to create balance in providing domestic needs (such as job creation, IP retention, regional economic development, etc) and investor returns.

Imagination

Canadians are renowned around the world as leaders in the creative cultural industries. This capability must be cultivated to produce more innovative, engaging and excellent digital content and media. Retaining Canadian identity and Made in Canada approaches to fostering an environment for creative growth can be supported in the following ways:

1. Canadian Crown copyright should become available under open copyright legislation. Open Data initiatives around the world, such as in the US, UK, New Zealand, Austria, Australia and various municipalities in Canada and abroad, have demonstrated that access to civic data correlates to increased civic participation and engagement, social benefit and value creation, business development and regional economic growth, such as citizens developing public sector information and service projects with publicly available data. The nature of the relationship between Crown copyright and public data must change.
2. Issues of Net Neutrality must be closely monitored to ensure fair and equitable access, service delivery, pricing schemes and copyright, for all aspects and stakeholders in the emerging digital ecosystem. A new branch of regulation should be created, engaging stakeholders from the CRTC, Industry Canada, DFAIT, Heritage Canada and the Canada Council for the Arts, among others, to ensure that the creative, commercial and civic interests of digital are balanced.
3. Current federal funding programs have made recent changes to ensure that digital and experimental media can be created alongside traditional media forms. However, new programs that specifically address the needs of a dynamic industry must be developed. The Canadian Media Fund's new structure still requires some changes to ensure balanced interests and innovation support, in that the funding allocation to the Experimental Stream should be increased to 30% to ensure wider distribution of funds across the digital media spectrum. Additionally, programs devoted specifically to creative and commercial innovation must be rolled out as technology changes over the next 10 years.
4. With the advent of rich content, interfaces and experiences enhancing the caliber and capability of digital technologies, design expertise will be the definitive quality upon which businesses will succeed or fail. Traditional design fields, such as industrial design, are transformed with the new characteristics and affordances of digital technology. As well, design practices, theory and methods provide value in different contexts, such as business strategy, health care and green technology. This value should be extended by supporting design leadership and literacy, design innovation and design–centred R&D. A national Design Strategy focusing on design's role in the future of content, culture, innovation and technology should be pursued to leverage Canada's strengths in arts, entertainment and design.
5. Digital Literacy is a required skill in the job markets of today and the future. Digital skills training should begin with K–12 where technology is incorporated into curriculum, used for content creation and research, and leveraged to facilitate local and international communications. A renewed focus on Science, Technology, Engineering and Mathematics (STEM) must urgently be put into place in order to repopulate the pipeline with competent citizens for this technological future. Post–secondary educational programs should also look to deliver all content digitally as well as engage with students on digital platforms.
6. In order to strike a balance between cultures of content consumption and content creation, certain measures must be explored to cultivate the latter. Ensuring accessible fast networks with equally fast upload/download speeds, showcase opportunities for content and supporting the framework for digital literacy and skills development are three high priority areas for empowering entrepreneurs and content creators in Canada.
7. Canada's future innovations will be generated in part through the academic environment, by researchers and faculty engaged in improving the human experience, generating prosperity and creating value. Continued investment and support of research, development and prototyping in Canada's colleges and universities is critical in providing opportunities for training, invention, innovation and entrepreneurialism, now and for future generations.

Innovation

Innovation in Canada has typically lagged behind other countries in recent years particularly relative to investment in research which creates the opportunity for innovation. While there are many outstanding businesses that support and drive forward the spirit of entrepreneurialism, these must be cultivated across the digital ecosystem. The role of the National Digital Strategy in this capacity is to develop strong entrepreneurial support infrastructure and facilitate opportunities for growth in the following ways:

1. In Canada, SMEs deliver 60% of the overall economic output, generate 80% of national employment and 85% of new jobs. And increasingly SMEs are creating digital technology for services, media, content and applications. However, support for SMEs in digital technology must be improved to ensure a thriving culture of entrepreneurship. Subsidy programs and tax credits must be provided to aid in the development of basic and applied research, intellectual property development as well as the creation of new services and applications. Micro–financing grant programs must be provided to kickstart small, agile companies. Advisory and skills development networks must be developed to provide valuable connections and knowledge creation. Talent transfer must be supported through academic internships, research fellowships and work placements. Consequent to this, there must be acknowledgement that these investments carry some risk and that failures, while regrettable, are inevitable and are a sign of a healthy, aggressive approach to participating in the global economy.
2. Sector–Driven Clusters for Excellence must be developed to increase and enhance the relationships between industry and academia. The gap that currently exists between these stakeholders regarding R&D partnerships and transfers, talent scouting and support, incubation and strategic development can be closed by strategic investment in these Clusters. With collaboration, value creation and innovation at the core of these Clusters, the outcomes are win–win. Building upon the success of existing networks, more connections must be made to engage industry with academic and public–sector stakeholders to support innovation growth and commercialization at all stages.
3. Private Sector investment in Canada is currently lower than it's been in almost 2 decades. Incentives such as tax credits and other programs should be developed to encourage greater angel, VC and other private sector investment in technology and digital startups. Low interest loan programs should be further developed and provided to SMEs across the investment spectrum, from Early–Stage to Series C financing.
4. Organizational collaboration and partnership in the not–for–profit, trade and industry association sector should be incentivized at a federal level to encourage a value–add approach to resources, networks, programming and research. By linking together the Canadian industry support network, the fragmented and silo–ed organizations that serve regions and sectors will be able to provide shared and enhanced benefit to their constituencies.

International

International market development and export is at the core of digital innovation. Access to international markets, buyers, investors and technical developers is a key strategic component for business success, and while it has never been easier to access international markets there are specific policy initiatives and programs that need to be developed.

1. Domestic market assessment and statistics should be gathered and distributed throughout the Canadian Trade Commission network to provide Commissioners and staff with up–to–theminute information on Canadian businesses for partnership purposes.
2. Export Support Programs for entering new or emerging markets should be developed to increase awareness of market opportunities, connect Canadian entrepreneurs with international partners (distributors, developers, designers, etc), and increase facilitated matchmaking between Canadian and International businesses.
3. A Digital Showcase Model should be developed as part of a marketing superbrand which features and profiles leading Canadian content, businesses, innovation and design to international markets. Building on the Canadian Pavilion model, these showcases would provide a digital portal into Canada's growing digital ecosystem.

Conclusions

The elements for a successful digital nation do exist in Canada — past investment in Infrastructure, Imagination, Innovation and International pillars have enabled millions of entrepreneurs, technologists, designers, educators and citizens to further their quality of life, engage in new experiences, discover new forms of communications and build a healthy and robust economy. However a unified strategy that harnesses our capabilities, capacity and creativity must be developed to ensure that Canada is not left behind in the future of digital. MEIC looks forward to continuing the conversation and supporting Canadian innovation, now and in the future.

About MEIC

MEIC is a not–for–profit organization based in Toronto, Canada. Founded in 2007 by OCADU, MEIC supports design leadership and innovation in Canada's mobile industry. Through applied research and commercialization, SME advisory and services, conferences, workshops and international outreach, MEIC is recognized as a leading mobile organization across Canada.

Mobile Experience Innovation Centre (MEIC)
OCAD
100 McCaul Street
Toronto, Ontario

Mobile Experience Innovation Centre