OTTAWA – The Canadian Chamber of Commerce told a Parliamentary committee last week that the federal government needs to do more to help small and medium-sized enterprises (SMEs) get online and benefit from the digital economy.
Scott Smith, director of intellectual property and innovation policy at the Chamber, was before the House of Commons Standing Committee on Industry, Science and Technology on March 7 to kick off the committee’s study on Broadband and Internet Access Across Canada.
During his opening remarks, he noted that while Canadian consumers are benefitting from the broadband Internet, the country’s SMEs are missing a huge opportunity to participate in the global economy. Smith referenced a Boston Consulting Group study of G20 countries – the Internet Economy in the G20 – that showed Canadian businesses lag those in these other nations when it comes to the adoption of information and communications technologies.
“The study concludes that this gap will widen over the coming years, meaning that Canada will lag behind its global competitors even more. The $4.2 trillion opportunity represented by the Internet will pass Canada by,” he said.
In addition, the Connectivity Scorecard report, led by Leonard Waverman, dean of the School of Business at the University of Calgary, ranks Canada eighth in terms of useful connectivity. This means that Canadian businesses, while they may have broadband access, aren’t using it to increase productivity or improve operational efficiencies.
Canada will continue to fall behind unless the federal government steps up and offers incentives to encourage SMEs to do more with the broadband connectivity they have. Smith reiterated during his presentation that this isn’t about simple connectivity, it’s about the adoption and usage of information and communications technologies (ICTs).
“Across the economy as a large user of information technology, the government can play a significant role by mandating online interactions for its partners, for citizens and for suppliers,” he argued. “Like any large user by undertaking a commitment to online commerce and the related technology, governments can defray costs for suppliers and provide valuable incentive to adopt technology.”
Under questioning, Smith was able to qualify the degree to which SMEs are not taking advantage of the opportunities brought by the Internet. He noted in response to a question from Peter Braid, a Conservative MP from Kitchener-Waterloo, that of the approximately 2.2 million SMEs in Canada, 70% of them don’t even have a web site. “That’s a staggering number given today’s technology and the availability of that technology. And they’re not taking advantage of it,” he said.
Liberal MP and vice-chair of the committee Geoff Regan (Halifax West) lamented the fact that the long-promised digital economy strategy has yet to be released (something Industry Minister Christian Paradis recently commented on to Cartt.ca). “As you know the current government and the minister have been promising for years to develop a digital strategy and it’s clearly a promise that remains unkept. There are a number of programs but no cohesive strategy about how they should work,” he said before referencing a quote from Michael Geist, a University of Ottawa law professor and Canada Research Chair in Internet and e-commerce law. “He recently wrote that ‘if part of our economic strategy doesn’t include a digital economic strategy, then I’d say you don’t have an economic strategy.’”
While much of this inaugural meeting focused on exploring ways to help SMEs use the Internet to their advantage, some committee members raised the issue of connectivity in the North as well as in other rural and remote communities. Smith noted that in cases where communities still remain unconnected or under-connected, then public-private partnerships might be the best option. He pointed to NICSN – an indigenous community satellite network – as an example (However, it seems like the NICSN web site has not been updated since 2005, so on the surface of it, we wonder what progress has happened with NICSN in nearly eight years).
Suggestions were raised during the hearing that some of the revenue gained from the upcoming 700 MHz spectrum auction should be set aside for remote and northern connectivity efforts. There are provisions in the 700 MHz spectrum licensing policy that requires winners in the auction to roll out networks and services to rural and remote areas, so these areas will get some mobile broadband.
Smith suggested the government can do this both with financial and non-financial tools. “I think there needs to be some government involvement both financially and policy wise presenting those options to private companies that will build those networks,” he said, adding that private investors may have looked at the business case for investing in rural networks and decided it’s not worth it. “You need to give them enough of a market opportunity to warrant the investment.”
Dates and witnesses for future meetings with additional stakeholders are not yet posted on the committee’s website.
