Steve Jobs once said: “Innovation distinguishes between a leader and a follower.”
An increasing number of economists have concluded that innovation – the creation, adoption and commercialization of new products, services and business models – is the key to improved standards of living. Others emphasize productivity as a key indicator of prosperity. Productivity is the result of effective use of innovation and resources to increase the value-added content of products and services.
Whether it’s innovation that wags productivity or vice versa, the important consideration is that both are derived from two essential catalysts: human capital and technology. While investment and infrastructure are also prerequisites for success, history indicates that it is not always a recipe for innovation. IBM research funding in the early 1980s was many times that of Apple’s, yet the personal computer story unfolded somewhat differently.
In the new Internet economy, barriers to entry are minimal, infrastructure needs are small and talent is key. Small- and medium-sized enterprises (SMEs) play a major role in innovation and our economy’s productivity growth. The Information and Communications Technology Council’s (ICTC) recent research exploring the “Apps Economy in Canada,” which is made up predominantly of SMEs, showcases a growth industry that currently employs 49,500 workers. Employment is expected to grow by another 27,000 over the short- to mid-term.
Pervasive trends in cloud services, in the mobile arena, as well as in apps and services are set to affect in an important way many sectors of the economy in the next three to five years. Industries such as the financial sector, health, manufacturing, renewable energy, life sciences and oil and gas will increasingly rely on technology to increase output and be more productive.
Observers, though, have noted with alarm that Canadian productivity growth has been much slower than for many other developed countries. Over a period of decades, Canada’s level of productivity has slipped among OECD nations, from third in 1960, to 11th in 1990, to 17th in 2010.
So, why is our productivity lead shrinking?
The need for digital up-skilling: Information and communications technologies (ICTs) are increasingly prevalent in every service line of our industry, from the way organizations manage their finances, provide efficient supply logistics, to how they deal with their own staff and clients. An industry’s capacity to innovate and compete greatly depends on the ability of its workforce – including non-IT workers and business leaders – to partake in strategic discourse with ICTs as its focus. In the course of their career, few workers have the chance to stay abreast of new technologies and their role in creating a strategic business advantage. The industry’s ability to digitally up-skill its workforce will be vital if Canada is to continue to lead in this global economy.
The right talent supply: Our growth will be constrained if we do not emphasize meeting the continuing strong demand for the right talent. Increasing post-secondary enrolment in generic programs will not cure the talent shortage. The combination of skills that is in greatest demand across the country consists of technical knowledge, business acumen and interpersonal abilities. Post-secondary institutions need real-time information about current and future demand to produce professionals with the right skills for employers. Immigration can also be more responsive to directly match the need of the industry with global talent and ensure employability.
A responsive labour market information system: Finally, the impetus for change starts with a better appreciation of how the labour market is evolving. In Canada, there is a gap in mechanisms to nationally share, align and publish regional labour market research. This gap needs to be filled with collection and dissemination of data on changing trends, needs and potential shortages on a regional or even municipal basis. Employers, policymakers and academia need robust up-to-date information on the real talent demand of evolving skills to help them optimize investments. A tracking mechanism should be responsive to providing real time feedback for decision-making and evaluating choices made and resources allocated. It should be able to make Canadians more aware of employment opportunities throughout the country, facilitate increased labour mobility between provinces, and prepare Canada’s industries for productivity and growth.
Namir Anani is president and CEO of the Information and Communications Technology Council (ICTC). Previously, he led policy development and research at the Canadian Radio-television and Telecommunications Commission.
On November 6, ICTC will present a GTEC session to explore the public policy implications of fast-changing technology, with an emphasis on the inter-linkages between skills, productivity, innovation and public policy.