How e-ready is Canada?

According to a global study, Canada has slipped from 9th to 13th place in e-readiness, or in having the collective resources to compete in the global information economy. The results aren’t a reflection that Canada is declining, but that the world is changing.

We’re inundated with studies these days, and many report on how Canada stacks up in comparison to other industrialized nations. These “report cards” often make headlines, prompting experts to comment on our economic performance, our environmental record, or the quality of our health care system. They also can create a lot of anxiety.

The Information and Computer Technology (ICT) field has a study too. The annual e-readiness rankings, co-published this spring by the U.K.-based Economist Intelligence Unit and the IBM Institute for Business Value, is an assessment of how nations compare in their overall ability to compete in the so-called e-economy. Of special interest this year is Canada’s fall from the top 10, declining from 9th to 13th place.

Study basics

The idea behind the study is that access to technology resources, just like access to water or electricity, enables companies to compete more effectively. “E-readiness is really a measure with respect to the variables that enable a society or a country to take advantage of the digital economy,” says Matthew Ivis, governmental programs executive for IBM Canada, and IBM Canada’s spokesperson for the study.

The variables are represented by respective sections in the study, each reflecting a different set of data. “In this particular survey,” says Ivis, “you have connectivity and infrastructure, business environment, social and cultural factors, legal environment, government policy, as well as the consumer and business adoption side.”

In the real world, these factors tend to be complementary. For example, if you are a global manufacturer of bicycle parts, you need a strong information network to reach your markets and your suppliers. This requires a favourable environment on a number of fronts. On the infrastructure side, it requires reliable telecommunications carriers to provide the physical network. A stable business environment is essential to allowing you to operate on a level playing field. You also need to be able to hire and retain technically-educated people. Then there’s the role of government, and the willingness of consumers and businesses to join the technology revolution.

Wireless lag

Technology, of course, is a moving target, and the editors responded this year to the growth of wireless technology by changing the rules. “There was a change in the methodology this year,” explains Ivis, “the elimination of fixed line telephony as an indicator, and the increased weight given to mobile telephony.”

This shift is one of the main reasons for Canada’s change in the rankings. According to Henry Kim, associate professor at York University’s Schulich School of Business, this needs to be seen in context. “Structurally, Canadians are behind the Europeans and the Asians in the use of wireless,” explains Kim, “but everybody would acknowledge that that’s because North Americans have good land line telecommunications. It’s easier for European countries and Asian countries that didn’t have a straight infrastructure to get on with wireless. Canadians already have a good thing going with land lines.”

Therefore, much of the progress in other countries in the wireless field is actually backfilling a deficit that hasn’t existed in this country. At the same time, Europe and Asia are pulling ahead in areas such as the provision of wireless hotspots. This will make it easier for companies in these countries to implement, say, a sales automation system.

Latent talent

Another interesting point is that Canada lags behind the U.S. in the category of “social and cultural environment,” largely due to its low (4 out of 10) score on “innovation,” the sub-category that measures the number of patents registered on a per capita basis.

According to Kim, this isn’t a reflection on the average Canadian. “I think we need to keep in mind that it’s unfair to compare Canada to the U.S.,” explains Kim. “Across the population, I guarantee Canadians are more e-literate. Canadians are better educated across the board.” The U.S., on the other hand, has a much higher concentration of development facilities, and an ultra-educated elite. “In that sense,” explains Kim, “a few people in the States, or a few groups, can achieve a lot that a very prosperous nation with 10 times the population of Canada can do.”

While we’re blessed with IT talent, we may not be taking full advantage of it. “We do need to leverage the fact that a lot of bright people from all over the world come here,” says Kim. “I could make a call to small and medium-sized enterprises to take a really good look at the available workforce. If you’re in Toronto, take a really good look at ESL (English as a second language) applicants. Take a really good look at what is available and who is available. There is a lot of underused talent.”

One common mistake is underestimating the training that people receive abroad. “They come here, and people don’t understand their particular degree,” explains Kim. “Somebody might say, ‘I know that U of T is a good school, but frankly I don’t know what Fudan University in China is.’ And yet it’s much more difficult to get into Fudan University, on a per capita basis, than U of T.”

Leveraging fundamentals

Canada has many other strengths. One frequently mentioned is that Canada leads the G7 Industrialized Nations in broadband connectivity, meaning that Canadian institutions and businesses are most likely to have high speed internet access.

“We were ranked first in business climate, ranked fifth in legal environment, and outside of this mobile telephony and wireless internet hotspot issue, we really ranked well in infrastructure too,” says IBM’s Ivis.

“We’ve got really strong fundamentals,” continues Ivis, “and what we need to do is leverage those fundamentals. What I mean by that is leverage or apply technology to try to solve some of our most pressing social and economic challenges. Healthcare is one. Energy, environment, government services in the public sector, these are areas that are important to Canada.”

Kim believes companies need to look to IT not only to deal with today’s challenges, but tomorrow’s. For example, Kim has spoken with an Ontario-based auto parts manufacturer who, facing a downturn in Detroit, was able to diversify into other lines of business. The diversification was possible because they had strong IT capabilities.

The hard part, of course, is that nobody can read the future. Kim recalls how businesses first reacted to the web. “Twelve years ago, you’d tell businesses, ‘You should get a website,’ and they’d ask you ‘Why? First of all, a good chunk of my clients don’t go on the web. And even if they did, why would we? We’re not going to sell online.’ It’s not really that someone who would have said that didn’t have vision. It’s very difficult to conceive how the world would have progressed from then on.”

The bottom line is that organizations themselves have to be e-ready. “It’s conceivable that a means for you to diversify, a means to maintain your business as compelling to your customers, may involve IT,” says Kim. “So it’s good to have people around, it’s never good to be behind the ball, because they you might get blindsided.”