Solving the Puzzle

Summary

As we recover from a world–wide recession, one that has dramatically impacted all dimensions of the global economy, Governments are searching for a means to accelerate the recovery, and to position their economies for growth.

In addition to acting as a key contributor to the improved competitiveness of businesses world–wide, the Information and Communication Technology (ICT) sector is also one of Canada's and the world's fastest growing. The ICT sector world–wide was estimated at USD $3.7 Trillion in 2007 and GDP for the Canadian ICT sector grew at double the rate of the Canadian economy as a whole (28.2% vs. 14.2%) between 2002 and 2007.¹ Over the same period of time, Atlantic Canada's growth has been less than half the Canadian average (12.5%² ) and ranks last in the country. Our 2006 — 2007 ICT GDP Growth slipped further, to 1/3^rd the average for the rest of Canada (1.3% vs. 3.9%³).

The New Brunswick Information Technology Council was formed to help New Brunswickers better understand how Information and Communication Technologies (ICT) fit into the prosperity puzzle, and to work with users of Information and Communication Technology (ICT) products and services, government, and other stakeholders to shape and implement the changes which help enable that prosperity. The purpose of this document is to respond to a request for input on Canada's digital future from the Government of Canada.

The winners in the digital economy are those who create more of the innovative products and services the rest of the world wants to buy. At the heart of that is our ability to:

• Grow our supply of skilled researchers, developers and knowledge workers
• Attract investment in the digital economy to Canada
• Become known one of the leading places in the world where innovation happens
• Develop the next generation of global entrepreneurs
• Provide the requisite leadership

Canada needs to become one of the best places in the world to start and grow a technology company. The NBITC would like to help make that happen. The ideas represented in this document are intended to be the starting point of a dialogue about how that can be accomplished. We look forward to a fruitful and mutually beneficial relationship with the government of the Canada as we work together to make the vision of a prosperous Canada, and a self–sufficient New Brunswick, a reality.

Submission

Capacity to Innovate Using Digital Technologies

• Should Canada focus on increasing innovation in some key sectors or focus on providing the foundation for innovation across the economy?
  • Focusing on increasing innovation in key sectors suggests we are prescient, in other words, have the ability to pick the winners. As this would represent a substantial challenge to any organization, the NBITC's opinion is Government would serve the country better by developing and implementing programs which enable innovation across all economic sectors and would mitigate the risk associated with picking winners and losers. That being said, the government should pay particular attention to programs that would drive innovation in areas that are important to the well–being of all Canadians, namely education, health and energy, as well as making government more effective, responsive and accessible.

• Which conditions best incent and promote adoption of ICT by Canadian businesses and public sectors?
  • Before any organization can become incented to adopt ICT, they must first clearly understand how ICT can be effectively utilized to help them achieve the outcomes that are meaningful to them. Accordingly, any program expecting to increase the use of ICT must first ensure the participants "get it" — that they see how ICT can be utilized to improve performance, and understand the fundamentals of the underlying business case for the investment. In the short term, we must help potential users of technology better appreciate how it can be leveraged to their benefit through programs targeted at increasing awareness and understanding. When coupled with programs which provide financial incentives for ICT investment, this will help reverse Canada's declining global position. Longer term, we need to ensure Canadian society is amongst the most digitally literate in the world — that we become the digiterati. This will require increased use and teaching of technology throughout our education systems, as well as a pedagogical shift towards skills that are more relevant to living in a digital world.

• What would a successful digital strategy look like for your firm or sector? What are the barriers to implementation?
  • A successful digital strategy for Canada would be one which resulted in the Country becoming one of the leading exporters of technology enabled innovation. Canada would be not only have a positive ICT balance of trade, but would be seen as a thought–leader, and a leader in converting ideas into products and services that the rest of the world wants to buy. We would become the global benchmark for how to make technology relevant and accessible to all dimensions of society. We start by creating a culture that values creative thinking and entrepreneurial endeavours. This begins with changing how we educate and teach our young, and manifests itself not just in how we leverage our own ideas, but also in our ability to develop and commercialize innovative thinking regardless of where it occurs.
  • Barriers to implementation include the relatively low numbers of Canadian youth who are choosing careers in ICT and the sciences, the pace of change occurring in the sector, the lack of a level playing field when it comes to market access, and Canada's low levels of Business Expenditures in R&D, a principal source of innovation.

• Once anti–spam legislation, and privacy and copyright amendments are in place, are there new legislative or policy changes needed to deal with emerging technologies and new threats to the online marketplace?
  • Over–all, our fundamental strategy should be one of creating a legislative framework that enables Canadian businesses to be ultra–competitive by minimizing the burden that is imposed by legislation in terms of time and cost. Allow Canadian firms to move faster by keeping legislative requirements to a minimum. Legislature that is put in place needs to help ensure that Canadian businesses are competing on an equal basis with those from other jurisdictions.
  • One of the trends with newer technologies is dramatic increase in bandwidth requirements. Government needs to anticipate bandwidth becoming a constraint and begin to develop measures which will minimize or mitigate the risk associated with individual, public and commercial users competing for the resource.

• How can Canada use its regulatory and policy regime to promote Canada as a favourable environment for e–commerce?
  • Canada should focus on:
    • Simplifying the regulatory regime
    • Levelling the regulatory playing field — i.e. ensure others need to play by the same rules we do
    • Identifying the elements that will differentiate Canada from the competition — for example, do we provide enhanced security and privacy, superior access to the U.S. or the E.U. …

Building a World–Class Digital Infrastructure

• What speeds and other service characteristics are needed by users (e.g., consumers, businesses, public sector bodies and communities) and how should Canada set goals for next generation networks?
  • The Government needs to look at Broadband access and speeds as they would highways in the traditional economy — i.e. absolutely essential to prosperity in the Digital Economy. As such, and given jurisdictions with superior access and speed will possess an enhanced potential to develop and bring to market innovative digital products and services with a concomitant impact on our digital balance of trade, the government needs to take a considered and strategic approach to addressing this need. In simple terms, there should be 2 dominant characteristics, ubiquity of access and availability of bandwidth that is at least an order of magnitude above the current definition of "broadband". In others words, rather than 1 mbps upload and 5 mbps download, the government should be seeking the means to deliver a minimum 10 mps up and 50mps down to the remotest locations in the country, and contemplating how to improve this by a factor of 10 yet again over the next decade.

• What steps must be taken to meet these goals? Are the current regulatory and legislative frameworks conducive to incenting investment and competition? What are the appropriate roles of stakeholders in the public and private sectors?
  • Canada must find ways to focus increasing amounts of both public and private investment into many dimensions of the digital economy, including broadband infrastructure and access. While the OECD has Canada ranking reasonable well in terms of broadband — ranking 9^th in terms growth of broadband between 2008 and 2009, and 11^th in terms of broadband access per 100 in population — the trend since 2003 is much more revealing and disturbing, as Canada has slipped from 2^nd to 11^th, and the leading nations have broadband penetrations that are 1/3^rd higher than our own. The fact that many of these same nations have private sector expenditures in R&D that are anywhere from 1.5 to 2.5 times higher than Canada's when expressed as a percentage of GDP is more than a little foreboding, as this strongly suggests they are well positioned to improve their relative advantage in terms of innovation, and that Canada's digital balance of trade will more than likely continue to deteriorate. This strongly suggests that Canada's current regulatory and legislative frameworks are failing in a spectacular fashion, and that the appropriate strategy needs to be revolutionary rather than evolutionary. While the Government has an obligation to consult, and should, this also suggests a protracted process of consultation is contra–indicated. Government should work quickly to identify a small group of informed and representative individuals, who can quickly help formulate and sell a strategy to regain Canada's leadership in this dimension of the digital economy.

• What steps should be taken to ensure there is sufficient radio spectrum available to support advanced infrastructure development?
  • As spectrum is a finite resource, all elements of society require access to it, and demand is exploding, Government must take steps to ensure the spectrum we have is effectively utilized and managed. This will require Canada take steps on a number of fronts, including improvements to the regimes which manage the allocation of spectrum, and provision of an open and transparent means of dynamically re–allocating available spectrum to effectively deal with spikes and peaks in demand. Government should also endeavour to turn the inevitable world–wide contention for spectrum into a strategic advantage for the country. Specifically we should identify the means to leverage our regulatory, legislative and investment frameworks to develop the systems, hardware and software which will minimize the spectrum foot–print required by individual devices, provide for a sophisticated and holistic means of dynamically managing spectrum, improve our ability to compress data being transmitted, and to do all of this in a digitally secure manner. In other words, make Canada a world leader in getting the most out of what is available. In parallel with this, we need to find ways to improve our ability to quickly and seamlessly hand portions of spectrum demand off to land–based systems as early as possible in order to keep more spectrum available to those who need it.

• How best can we ensure that rural and remote communities are not left behind in terms of access to advanced networks and what are the priority areas for attention in these regions?
  • Government needs to work in partnership with the private sector to quickly provide access to broadband satellite to even the remotest areas, and use the window this provides to develop and deliver more sophisticated and comprehensive programs. New Brunswick might prove a reasonable case study. As part of the longer–term strategy, Government should consider a public/private partnership to leverage its own requirement for Bandwidth in remote areas and act as an anchor client for basic infrastructure which could then be "built out" to provide capacity to local government, education and other institutional users. This would then provide the framework for non–satellite access to broadband in remote communities.

Growing the Information and Communications Technology Industry

• Do our current investments in R&D effectively lead to innovation, and the creation of new businesses, products and services? Would changes to existing programs better expand our innovation capacity?
  • As Canada runs a substantial ICT balance of trade deficit, it would appear our existing programs are either not resulting in sufficient numbers of quality ideas or the ideas with commercialization potential are not getting to market. If Canada was a global leader in innovation that would likely not be the case, however we have not been able to conduct a deep enough analysis to reach any conclusion regarding the state of R&D in Canada or the state of the Canadian innovation eco–system. Accordingly it would be premature to try and address remedies. That being said, Canadian businesses are investing approximately 1% of GDP in R&D, approximately ½ of that being invested by the U.S., and 40% of Global leaders such as Japan and Finland. Unless our innovation eco–system is performing that much better than that of the Global leaders in R&D, it would suggest we will likely have fewer innovative ideas getting to market. Steps must be taken to correct this imbalance in parallel with assessing the relative capability and through–put of our innovation eco–system.

• What is needed to innovate and grow the size of the ICT industry including the number of large ICT firms headquartered in Canada?
  • Fundamentally growth comes from being able to capture significant shares of growing markets, and our ability to that is primarily linked to our ability to bring innovative products and services to market. To grow ICT, we need to take steps to ensure we have more innovative products. The most promising area for investment is likely in helping researchers and entrepreneurs cross "the valley of death" — in other words the chasm between having a good idea and getting it into the market. Additionally and as indicated earlier, our relative levels of private sector R&D investment are low in comparison to world leaders, and immediate steps to address this should be undertaken.

• What would best position Canada as a destination of choice for venture capital and investments in global R&D and product mandates?
  • Canada would be a more attractive destination if we were demonstrably more capable at originating creative ideas, and converting those ideas into products and services with marketable value, while being competitive in regards to tax. That capability would be primarily articulated in the form of superior access to talent, and mechanisms that consistently are able to identify the opportunities to prospective investors.

• What efforts are needed to address the talent needs in the coming years?
  • Canada need to act in the short term to alter the misperceptions associated with careers in ICT and the Sciences, and in the long term to make students, parents and educators more aware of the depth and breadth of the career potential for ICT. Implementing a means to fast–track immigration of skilled individuals should also become a priority.

Digital Media: Creating Canada's Digital Content Advantage

• What does creating Canada's digital content advantage mean to you?
  • Creating the advantage means establishing an environment which enables Canada to become a world leader in the creation and utilization of both digital content, and the infrastructure, applications, products, services and business models required to make use of it. It should be noted the term digital content can be very widely interpreted, to the point of including virtually the entire ICT sector, and a common understanding of what is, and is not, considered in scope is essential to any meaningful dialogue on the topic.

• What are the core elements in Canada's marketplace framework for digital media and content?
  • The core factors for digital content are not fundamentally different from those needed by ICT as a whole. While market participants create and develop digital content (and Government is a major creator and developer of content), government has a role in developing "enabling factors" for creation and use of digital content and content–related entrepreneurship. Government should promote investment in broadband infrastructure, content, R&D, innovation, education and skill development, while facilitating removal of regulatory barriers and other impediments to competition in network services. The 2008 OECD Policy Guidance for Digital Content suggests Government should focus on policies and initiatives that:
  • Encourage a creative environment that stimulates market and non–market digital content creation, dissemination, and preservation of all kinds.
  • Facilitate R&D and innovation in digital content creation, dissemination, and preservation, and digital content–related networks, software and hardware, open standards, and interoperability.
  • Ensure that capital markets (e.g. venture and risk capital) work competitively in funding innovation and digital content ventures.
  • Address shortages in skills, training, education and human resource development for the creation, distribution and use of innovative digital content.
  • Stimulate enhanced knowledge creation, dissemination, lawful use and preservation of different forms of digital content, (including access to information, research, data and publications), encourage investments in such creation, dissemination and preservation, and encourage global access to content regardless of language and origin.
  • Enhance access and more effective use of public sector information. Creating and ensuring an environment that promotes freedom of expression and access to information and ideas.
  • Improve regulatory parity and treatment across borders.

• What elements do you believe are necessary to encourage the creation of digital media and content in both official languages and to reflect our Aboriginal and ethnocultural communities?
  • No comment

• How do you see digital content contributing to Canada's prosperity in the digital economy?
  • Prosperity is in part related to growth, and the content side of the Digital economy is one of the fasted growing. If Canada wishes to leverage this growth to its advantage it will need to be a participant in the creation of the products and services associated with it.

• What kinds of 'hard' and/or 'soft' infrastructure investments do you foresee in the future? What kinds of infrastructure will you need in the future to be successful at home and abroad?
  • Investments around infrastructure will need to focus on two primary components: improving access to bandwidth (hard), and enhancing the market's ability to utilize that bandwidth (soft). To that end Government needs to develop policies that encourage investment in new network infrastructure, software, content and applications, with any eye towards interoperability should be considered. Specifically, Canada should create incentives that will result in the creation, dissemination, and preservation of digital content through the development of open innovation strategies, academic–private sector partnerships, and incentives for joint research. Soft investments targeted at strengthening information and content quality and accuracy such as the use of tools to help creators identify and disseminate their works, and users to identify and access specific information and works, should also be considered.
  • As discussed earlier, the objective with access should be ubiquity and Canada should consider investments that leverage the digital needs of our small population and vast area into leadership in accessibility of digital content regardless of location, so that all Canadians realize the benefits of the global digital economy. This would include applications for the delivery and use of digital content, including promoting effective management, preservation and dissemination tools that enhance access and use of different types of digital content.

• How can stakeholders encourage investment, particularly early stage investment, in the development of innovative digital media and content?
  • Before investment can occur, there must be ideas worthy of investment and those must be visible to those with an interest in investing. Accordingly, Canada should look to the means of increasing visibility into research already being conducted, while identify the means of increasing the level of related private and public sector R&D

• How can we ensure that all Canadians, including those with disabilities (learning, visual, auditory), will benefit from and participate in the Canadian digital economy?
  • In addition to those with physical disabilities, Canada needs to also consider the needs of other socio–economic groups, in particular the poor, the elderly, and those for whom English is not their first language when considering participation in the Canadian digital economy. With that in mind, the government should introduce programs that are intended to ensure these groups have the physical and financial means to access the internet, that there are things they can do on the internet that are meaningful to them, and the applications and means of accessing them address the obstacles unique to each of these group. A primary target should be the delivery of government and social programs, followed by training for groups for whom the use of technology is new or intimidating.

Building Digital Skills for Tomorrow

• What do you see as the most critical challenges in skills development for a digital economy?
  • Not enough Canadians are choosing careers in the Sciences and ICT, and our K–12 schools need to do a better job preparing our youth to live in and actively participate in the global economy.

• What is the best way to address these challenges?
  • Given the constraints of an educational model developed to address the needs of the industrial age, one whose traditions are rooted in memorization and rote learning, and the limits on the amount of time available in the class–room, the answer is not likely to teach more, but to teach differently. Digital citizens and knowledge workers need to know how to:

• Access information efficiently and effectively
• Evaluate information critically and competently
• Apply information accurately
• Understand the ethical, legal and moral issues concerning the access and use of information
• Assess the validity and accuracy of information
• Create meaning from data

And students and citizens of the Information age should be:

• Critical Thinkers
• Problem Solvers
• Innovators
• Effective Collaborators
• Self–directed Learners
• Information and Media Literate
• Globally Aware
• Civically Engaged

Our K–12 schools need to re–tool and focus on ensuring all students graduate with these skills. Government should also identify and address the root causes of low ICT and Science degree program enrolment, and given the strategic nature of these areas, consider a more direct incentive to high–school students to pursue careers in these fields.

• What can we do to ensure that labour market entrants have digital skills?
  • See above

• What is the best way to ensure the current workforce gets the continuous up–skilling required to remain competitive in the digital economy? Are different tactics required for SMEs versus large enterprises?
  • This begins with instilling a culture of life–long learning in our youth, in part by making the changes detailed above to our education system. In parallel, we need to take steps to re–skill and re–orient workers being displaced as increasing elements of the economy re–tool to digital, and provide a hand–up to those whose prior training and experience leaves them poorly suited to participate. SMEs typically have less flexibility than larger organizations, as the impact of staff participating in skill upgrading will often be more deeply felt, so delivery of programs through channels and media that allow the employee to fit the training around their work and home lives and to do so remotely, rather than requiring them to participate at specific places and times will likely increase the uptake.

• How will the digital economy impact the learning system in Canada? How we teach? How we learn?
  • The digital economy is already impacting the learning system in Canada. Government should be examining the means of accelerating this, while simultaneously ensuring this opportunity is available to all Canadians. Our schools and institutions will need support as the web's ability to provide access to information, simulations and collaboration drive fundamental changes to how learning is delivered and enhances the ability of individuals to learn at a tempo and in a manner that is more consistent with their own preferences and idiosyncrasies. Educators will also be impacted as the coaching and mentoring elements of their role expand and less emphasis is placed on the teacher as the expert. Increasing, learning will take place in locations other than the classroom.

• What strategies could be employed to address the digital divide?
  • To cross any divide, you need to understand the value to you and the cost of doing so. Those Canadians on the "wrong" side of the divide must first see why it is to their personal advantage to do so, and then be able to acquire the means. Canada should focus first on generating the necessary awareness, and helping its citizens understand why it is to their advantage to make the effort. In those instances where Canadians are willing, but unable, the Government should provide support. The shape and form of those programs is a subject for further discussion.

To prosper in the global digital economy, Canada must build on its many strengths and foundations to seize new opportunities and regain its digital leadership. Other countries have set clear targets and timelines for reaching these targets.

• Should we set targets for our made–in–Canada digital strategy? And if so, what should those targets be?
  • Yes — Canada should become a net–exporter of ICT products and services by 2014, and a world leader by 2018.

• What should the timelines be to reach these targets?
  • See above

¹ — Industry Canada, ICT Sector Gross Domestic Product, December 2008

² — Industry Canada, ICT Sector GDP Regional Report, GDP 1997 — 2007

³ — Industry Canada, ICT Sector GDP Regional Report, GDP 1997 — 2007