IT Investment Gap Grows to 40.

5% between US and Canada

Canada’s long history of under investing in productivity-enhancing information and
communications technology tools reinforced

IT gap between Canadian and US firms continues to get bigger.

Canada, which has a long history of under investing in productivity-enhancing information and
communications technology tools and services, particularly in comparison with the United States,
showed no improvement in its performance in 2009.
The investment gap has grown from 37.2 percent to 40.5 percent. According to a new study by the
Centre for the Study of Living Standards (CSLS), Canada's rate of ICT investment per worker in 2009
was 59.5 percent of that of the United States. In 2008, it was 62.8 percent.
Improving Canadian business productivity is a central priority for the Information Technology
Association of Canada (ITAC), which commissions CSLS' annual studies of the ICT investment gap.
ITAC's community of companies accounts for more than 70 per cent of the 572,700 jobs, $155.3-billion
in revenue, $6.2-billion in R&D investment, $30.4-billion in exports and $11-billion in capital
expenditures that the ICT industry contributes annually to the Canadian economy.
"Our member companies have all seen the transformational impact of ICT tools and services at the
enterprise level," said ITAC President and CEO, Bernard Courtois.
"As an industry, we know that our relatively weak adoption of ICT is a major drag on Canada's
competitiveness and overall economic performance. As an association we have been trying to get the
word out about the benefits of stronger ICT adoption across the whole economy. The work of the
Centre for the Study of Living Standards provides us with a useful data point; I just wish the indicators
were showing signs of improvement and not the reverse.”
The CSLS has conducted groundbreaking research that directly links Canada's under adoption of
technology to the relatively poor productivity of our economy in comparison with competitor nations
such as the United States.
Many influential organizations concerned about Canada's capacity for innovation and competitiveness
have underscored the need to improve our performance in this important area.
In its April 2009 report on innovation, the Council of Canadian Academies noted that "Investment in
advanced machinery and equipment is a principal source of productivity growth, both through its direct
labor-augmenting effect and through its induced impact on innovation, including innovations in the
business reorganization required to fully exploit the new machinery and equipment."
The report from its Expert Panel on Business Innovation goes on to point out that "the ICT investment
picture is consistent with the view that Canadian businesses on the whole ... are technology followers,
not leaders and are reluctant to adopt new practices until they have been well proven south of the
border. In today's fast paced world that strategy is unlikely to work as a well as it once did."