The future is here, but is Canada ready to take advantage of it?

On Feb. 6, global internet giant Google announced it was tripling its workforce to almost 5,000 jobs across Canada. The week before, homegrown Canadian darling, Shopify, announced 1,000 new jobs in Vancouver. Microsoft, Facebook, and Amazon are all hiring. The digital economy generated more than $100-billion in growth last year. And 2019 was a record year for venture capital investment in Canada. Clearly, Canada’s innovation economy is having a moment. And, indeed, it should be. With a highly educated population, open borders, world-class universities, universal health care, and high quality of life, we have all the ingredients for success. But, with this success comes a new set of challenges—and a redefinition of some familiar ones. Are these investments by global technology giants creating new jobs—or just taking away talent from Canadian startups? Can our cities absorb the growth of the innovation economy without becoming unaffordable and congested? Can we maintain our sovereignty over things as disparate as tax policy and our arts and culture in a world increasingly dominated by global tech platforms? Most importantly, how can Canadians navigate the complexities and disruptions that are inherent in a rapidly changing, technology-driven world? Abandoning or ignoring the innovation economy is not an option. There is no turning back. Over the past two decades, technological-driven growth has become the dominant driver of new economic activity around the globe. In this new world, ideas, ingenuity, and talent are paramount. The companies—and countries—that understand how to create, protect, and commercialize these assets stand to reap tremendous gains. Conversely, failing to do so risks economic stagnation and decline. But how Canada responds to this challenge is a choice. Smart policy can unlock our country’s potential and ensure that we are poised to capture the highs, while mitigating the lows, of the innovation economy. To this end, here are four key policy challenges Canada must address to fully unlock the potential of the innovation economy: 1. Ensuring no Canadian gets left behind. While predictions of a jobless future remain overblown, many Canadian workers remain at risk from technological disruption, leading to anxiety, underemployment, and potential unemployment. In addition, even relatively diverse sectors like the tech sector still show large gaps in terms of pay and participation along gender, race, and ethnic lines. In a global competition for talent, it will be critical that Canada maximizes the potential of all its workers and ensures no one gets left behind. 2. Ensuring all parts of Canada can benefit. Around the world, the clustering effects of the knowledge economy have led to the rise of superstar cities and an increasing divide between urban and rural economies. Additionally, variations between regional economies and between more traditional and knowledge-based industries feed division, conflict, and economic alienation. Canada has the potential to shape an innovation-driven economy that includes all parts of the country, mitigating regional tensions and harnessing technology to create economic opportunities for all Canadians. 3. Creating the next generation of global champions. Recent studies have shown that a small number of highly successful, frontier firms are leading productivity growth across OECD countries. These firms are leaders in adopting technology and investing in human capital and research and development. With slowing productivity growth, Canada needs to foster our own frontier firms now more than ever. Productivity—an abstract, often slippery concept—is the single greatest driver of rising income levels and middle-class prosperity. 4. Decoupling economic growth from environmental impact. Addressing climate change is the most pressing challenge facing humanity today. But, while certainly linked, reducing carbon emissions need not come at the expense of sacrificing growth. The innovation economy—with less reliance on producing physical products or natural resources and a greater focus on digital, services, and creative industries—is a path to growth that involves much lower carbon intensity. The very interconnectedness of the innovation economy—global, instantaneous, highly networked—means these challenges intersect in complex and often confounding ways. But, while these challenges can seem daunting, they must be measured against Canada’s strengths. We have the tools, the knowledge, and the opportunities to confront these challenges and shape our own destiny. Canada’s future is the innovation economy. And it is a bright one indeed. Sean Mullin is an economist and the executive director of the Brookfield Institute for Innovation + Entrepreneurship at Ryerson University, Canada’s public policy think tank for the innovation economy. The Hill Times

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The future is here, but is Canada ready to take advantage of it?

Smart policy can unlock our country’s potential and ensure that we are poised to capture the highs, while mitigating the lows, of the innovation economy.

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