Canada picks up pace in computer, tech spending
Canadian companies have been picking up their spending on computers, software and other technology, but they still lag the U.S., according to an annual study.
Businesses spending on information and communication and technology, called ICT for short, rose by 6.2 per cent in 2008, according to research by the Centre for the Study of Living Standards.
That outpaced the 4.4 per cent rate of growth in the U.S., which was much harder hit by the recession and unemployment that year.
On average, Canadian firms boosted their spending 16.8 per cent for communications equipment and 11.3 per cent for software.
In contrast, investment in computers fell by 10 per cent, though part of the decline can be attributed to a stronger Canadian currency and falling prices, the study said.
When inflation and currency fluctuations are taken into account, real investment in ICT went up 12.3 per cent in 2008, much higher than the 5.9 per cent growth in the U.S.
But the average U.S. worker is still much better equipped than the average Canadian when it comes to technology, the study found.
"Canada has long had a significant ICT investment gap with the United States and this gap has been identified as a key factor behind Canada’s lower level of labour productivity relative to the United States," the report noted.
Canada’s rate of technology investment per worker in 2008 was about two-thirds, or 62.1 per cent, of that of the U.S.
The gap has increased slightly from 2007’s 62.5 per cent, but is down significantly from 2000, when Canada’s tech spending was 49.7 per cent of U.S outlays.
The disparity, which has persisted for more than a decade, is what most concerns the Information Technology Association of Canada, which commissions the annual study.
"The world has turned into a global economy. The competition isn’t the person across the street from you anymore. It’s the company in India or China," said ITAC chair Tom Turchet.
"The companies and countries that understand this will compete better in the future. If you accept that better technology will help your organization compete and that innovation is important, then you will move forward successfully," said Turchet, who is also vice- president, software, general business, for IBM Corp.
The lobby group is calling for a national strategy to boost education and business spending on technology. The ICT sector employs 572,000 workers and generates annual revenues of $149.4 billion, ITAC said.
Filed under: online by Fred