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| E-economy Upswing |
November 10, 2005 |
By Trevor Marshall
ONE YEAR AGO INDUSTRY CANADA SET AN E-ECONOMY GOAL. OVERALL, THE NATION IS DOING WELL, BUT WHO’S OUT FRONT?
Ask Richard Simpson about Canada’s progress toward a technology-enabled economy and you get a mixed answer - great in some sectors, almost stagnant in others.
And it’s an important question to ask, because the director general of electronic commerce at Industry Canada is convinced - as are many in business, government and academia - that Canada’s future prosperity depends on evolving our economy toward one that’s fully enabled by information and communications technologies (ICT).
But one year after a major conference in Ottawa charted the course for this national evolution, there’s still much work to be done to convince the country’s small and medium-sized enterprises (SMEs) that their future survival and prosperity depends upon getting entire industry sectors to embrace the so-called e-economy.
An e-economy is defined as the use of the Internet and other computing technologies throughout Canada’s economic and social fabric.
Last year’s conference brought together more than 200 people from all sectors of the economy to discuss the opportunities and challenges presented by this evolution. Delegates concluded their two-day session by hammering out a policy agenda to guide Canada’s progress between now and 2010.
The agenda is a simple two-page document that sets out a well-defined goal: to build a fully ICT-enabled economy in Canada by 2010, a world-leading e-economy that fosters growth and wealth creation throughout the country.
“It’s pretty well the document we’re using now to sketch out our priorities, both within the government and with private- sector partners for Canada’s approach to the e-economy,” Simpson said. (The complete agenda is available at http://www.e-economy.ca.)
“The metrics since the conference show Canada is progressing well as an e-economy,” Simpson said, noting 2004 was the third straight year in which online sales in Canada grew by at least 50 per cent, and that two-thirds of Canadian households now report they use the Internet regularly. “We’re very happy about our overall progress last year in terms of what those statistics show us.”
Triumphs and trials
Last year’s conference demonstrated that some sectors - such as financial services - have done a very good job of embracing the e-economy. These bright lights have Internet-powered their e-commerce solutions and updated their back office, customer-facing and supply chain management applications, and other internal systems.
But Simpson said the picture is not all rosy. “There’s a lingering problem with the uptake of electronic commerce and the use of ICT across certain sectors of the economy,” he said. “Many sectors - especially those that have large numbers of SMEs - tend to lag behind (counterparts in) the U.S., specifically in terms of the use of ICTs for the transformation of business processes such as supply chain transformation and the use of online marketplaces.
“These are things that continue to gain the attention of our private sector partners as well as the government, and are areas where we’re looking at what the problem is, sector by sector,” Simpson said. “As the government’s economic strategy unfolds, we’re looking at putting an ICT or innovation component into that strategy and linking it with the kinds of private sector partnerships that we want to see emerge in the near future.”
Groceries lead
One collaboration between the private and public sectors that has already borne fruit - not to mention vegetables, dairy, meat and so on - occurred in the retail grocery sector. Simpson said a couple of years ago, the Electronic Commerce Council of Canada started working with major grocery store chains such as Loblaws and Sobeys, smaller independents and suppliers, and CANARIE, the not-for-profit advanced Internet organization funded by Industry Canada, to develop online trading platforms to move the sector’s supply chain online. “That network is now up and running with huge numbers of SMEs participating. Everybody from small jam manufacturers in Eastern Ontario to large beef producers in Alberta are part of this online supply chain,” Simpson said.
“This is the kind of thing that we’re finding lacking in many areas, including some retail sectors but also in the manufacturing and services sectors more generally,” he said. “It’s the kind of thing we want, with the private sector, to look at more closely over the next year or so to get a better fix on where we can step in and ensure these sector-wide initiatives are sparked and supported and implemented.”
Preaching e-economy
Canada’s manufacturing sector poses one of the biggest challenges to realizing an e-economy. Canadian Manufacturers & Exporters (CME) is Canada’s oldest business association. Its members are responsible for about 75 per cent of the goods manufactured in Canada and about 90 per cent of merchandise exports. And approximately 85 per cent of CME members are SMEs, making them difficult to reach.
The good news is CME’s president and CEO, Perrin Beatty, is a former federal communications minister who is passionate about getting the association’s membership to embrace technology. “The challenge, I think, for many companies is to move beyond the initial stage (of e-mail and a Web site),” he said. “(We have to make it clear) not that this is trendy, but that there is a bottom-line justification for doing this - that it will help their businesses be more successful.”
ICT-related issues are not the only challenges facing Canadian manufacturers but a CME report, Manufacturing 20/20, outlines the association’s vision of the future of manufacturing and highlights ICT struggles. (This report is available on the association’s Web site: http://www.cme-mec.ca.)
Beatty is convinced the CME can help its membership get plugged into the e-economy. “One of the real challenges for us, particularly with smaller companies, is to look at what are the tools that they can have that enable them to be more competitive, particularly in an environment where every day business is becoming more difficult.”
2004 was the third straight year in which online sales in Canada grew by at least 50 per cent, and two-thirds of Canadian households now report they use the Internet regularly. “We’re very happy about our overall progress last year in terms of what those statistics show us.”
- Richard Simpson, director general of electronic commerce, Industry Canada
Tools and training
One such tool is electronic procurement. The association has partnered with ecmarket, a Vancouver-based company, to make available to CME members a software solution that enables smaller companies to plug into the paperless supply chains that are becoming more commonplace at large organizations. “In many instances, we find very large companies are investing very heavily in this, and doing so successfully,” Beatty said. “But for smaller companies, they’re not quite sure where to start, and that really underscores the importance of going out and making people aware of what best practices there are and how they use these technologies to their advantage.”
Awareness of best practices is reinforced through seminars, CME conventions, and Innovation Insights, a program run jointly by CME and the federal government’s National Research Council through its Industrial Research Assistance Program (IRAP). “(Innovation Insights) is very helpful because it allows peer learning,” Beatty said. “It takes managers from a company in to see another company that is seen to be leading edge. People have the opportunity to take a look at their technology, take a look at how they organize themselves, and ask, ‘How could I use their approach in my company to advantage?’”
Simpson at Industry Canada said this is exactly the type of role the government wants to see industry associations and sector councils shouldering. “[CME] has really pinpointed the importance of innovation for its membership, in particular the ICT-enabling part of innovation.”
The bottom line
Overall, then, progress since last year’s conference has been good. Industry Canada is working with associations to identify the sectors that need help, and public-sector resources such as IRAP and CANARIE are being brought in as required to leverage their expertise.
Most importantly, perhaps, last year’s conference has been a call to arms for Canada’s all-important SMEs. “We recognize the fact that SMEs have been falling behind as the rest of the world has been plugging in,” Beatty said of 2004’s e-economy summit. “It has given us a sense of urgency.”
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