The ICT Industry in Canada - Term Paper Example

? The ICT Industry in Canada Task The Canadian government has presented a platform that supports the development of itspublic and private sector. In these sectors, there are internal operations that lead to the growth of the economy and the sustenance of economic progress. The Canadian Government (GC) invests an amount of $4.95B to support the ICT development. This strategy is applied to develop the industry for the accommodation of individuals within the sector to offer sustainability. Canada presents estimated 4200 companies offering IT services within its economies and research have shown that there is the need to employ more individuals who are qualified to occupy the increasing vacant positions. Canada’s Association of I.T. Professionals (CIPS) has also provided development in the ICT department supporting the program since 1958. This has been achieved through setting the desired standards to promote its development. The organization was established to support the development and provision of the necessary support. With a survey done to detect the shortage of ICT professionals in the next few years, efforts have been made to attempt to revive the industry through providing room for qualified professionals to be accommodated within the industry. Introduction The ICT industry within any societal setting is vital in ensuring progress to the economy to deliver an update on the necessary resources. The resources that are under consideration issue support to the political and economic sustenance. The desire to analyze the ICT provision of any company is attributed to the requirements presented in identifying the main contributions of the entity. The ICT industry has been a leading form of intellectual property in the modern century with a provision issued to mark the features that have contributed to its advancement. Canadian ICT sector has made leading developments in creating stability in the economy, while maintain a noticeable balance in the principles that are applied to create sustainability in the economy. The ICT industry in Canada has presented numerous developments in the generation of GDP, and measures to maintain its effectiveness need to be implemented to realize its contributions. Canada had established its economy as the leader of the information advances, and recent advancements have seen it fail to maintain its status among the developed powers that are capable of offering sustainability within the ICT sector (Toner, 2006). Policies to balance the ICT industry with the developmental inputs presented within its economy are the factors that might revive the industry. This paper analyzes the developments that have been presented in the Canadian industry’s ICT sector and the contribution that it has presented within its economy. ICTs Composition The major composer of the industry has been articulated to comprise minor companies. These are an estimated 33, 000 firms, 80% of the number specializing in software and computer development. The other numbers are concerned with wholesaling and manufacturing. On the other hand, companies with a large work force form the minority in the industry with an estimated 20% of firms that are engaged in ICT sector. The value of the ICT composition with the manufacturing and software development sector has been boosted by the need to provide investment of qualified professionals, who are capable of delivering the developments to achieve the economic progress desired. However, the large companies with an employee turnover of 500 professionals support the sector with the need to provide regulation of the needed gadgets. In 2010, leading companies owned the number that constituted the manufacturing segment of the ICT area. These companies held a minimal employee capacity with the number of employees estimated to be 50 per firm, and the record revealed that this number in the total ICT share occupied 3.7%. Contribution to the economy Research conducted revealed that the ICT sector had increased its total revenue between 2009 and 2010 by a recorded 0.7%. This growth had been inputted by the efforts that were developed by the wholesaling companies that had witnessed a 14.3% growth (Industry Canada, 2010). On calculation, the figure that the wholesaling sector made to the development of the revenue generated had amounted to 59% contribution. The service sector witnessed a 3.3% growth boosted by the advancements made to its development by the developed designs in computer software. The ICT sector contributed to a generation of a revenue figure that increased by $33 billion in a span of 8 years up to 2010; this figure recorded to constitute a 25% increase (Industry Canada, 2010). The revenues presented within the manufacturing division have declined by 15% while the service sector that led to the majority of revenue generation increased by 49%. These figures articulated the growth in Canadian industry to develop the measure that had contributed significantly to the improvement in the industry. ICT Contribution to Canadian GDP A total revenue generation of $60 billion had been generated in the year 2010 depicting a 5% increase from the subsequent years from 2002. The year 2009 had been the worst hit by a poor revenue generation and he recovery witnessed immense changes to offer a 3.0% rise. The growth and the returns from the sector had been slow, and minimal returns were realized, as it did not reflect on the growth of the economy that had been witnessed. However, the contribution by the wholesale sub-sector and communications sub-sector provided a 4% growth by 2010. This growth had been double the recorded growth of the economy, which witnessed a 2% growth by the same year. The resulting growth presented an implication to the economy to aid the maturity of the Canadian GDP by 9.5% by the year 2002. The recorded growth by 2010 had been boosted by the development of the wholesale sub-sector that had advanced by 16.0%. ICTs manufacturing sub-sector had elevated by 8.8% and the leading provision in the sector had been the marketable and machinery department. The service section of the ICT department had been boosted to develop by a minimal figure of 0.9 % by 2010 attributed to the reduced developments realized in the communications sector. However, the service sub-sector has led to the growth in the ICT industry by contributing to a recorded growth of 72%. Employment and the Industry The ICT industry has emerged as a leading source of employment with the realization in a shortage of qualified professionals in developing the economy of the country. Employment in the ICT industry witnessed a growth of 2.7% by the fiscal year in 2010. The year witnessed an increase in the number of the employed to accommodate the ICT industry occupying a 4% number of those employed in Canada. The majority of the recruited workers were incorporated within the computer system design firms. This was due to the realization to generate a creative entity that offered greater significance to creativity development within the market. The industry witnessed a record increase in the number of those recruited to reach a 12,200 capacity, while those recruited within the entire ICT industry occupying a total 14, 600 capacities. The number of the employed within the ICT sector had grown by 16, 500 from 2002. The figure is not immense since the number of those in the manufacturing industry had been reduced by a record figure of 17,000. The manufacturing sector as compared to the service sector has noticed a reduction in the number recruited. The figure of those in the service sector had been increased by 4% between 2002 and 2010 (Industry Canada, 2010). Table retrieved from: R&D Expenditure The contributed figure had been noticed in the research and development sector (R&D) that had realized a reduction in the finances invested within the industry. The expenditure inputted within the ICT sector had dropped from $11 billion in 2002, to $5 billion in 2010. All the subsectors were affected with the manufacturing sub-sector witnessing a 15% drop in investment. The growth of the Industry up to 2010 had been attributed to the investment in the research department in the initial years to generate a realized growth. However, with the growth realized there was reduced investment in research industry. The ICT sector had realized the greatest investment within the Canadian industry with a 33.4% input in the investment of companies within the private sector. The largest decline in the R&D figure had been in the communications sub-sector and CS design industry having a 12% decrease. The R&D investment had decreased in the manufacturing sub-sector by a figure 33% while the service industry was boosted by an added 31%. The result led to expenditure of $2.2 billion of R&D funding within the service sector almost comparing to that within the manufacturing sub-sector. Workforce and Wages Presented To be qualified to gain admission within the ICT sector, an individual must present the highest qualification skills with a high education acquisition. The ICT employee niche is composed of a highly skilled labor with the highest intellectual capability. Research indicated that of the employed individuals into the ICT department; 44% had attained the university qualification. In the market, the top industries that offered the opportunity to these graduates are those that ventured in software development and offered computer related services. This figure was 52.5% of the total employees followed by those in communication equipment sub-sector and manufacturing having a 46% input. These qualified individuals are presented with a package that reflects on their scope of duty delegation with the sector keen to satisfy its employees. The employees are presented with an average pay package of $67, 225 figure reflected in 2010 that is more than the value reflected on the economy that offers an average $44, 366. Those that receive a higher package within the ICT Industry are those that are involved in the development of computer and software technology, with the modern century presenting challenges in offering an advanced technological package. The average earnings of these employees by 2010 had been $71,647, a figure that was higher than employees in the electronic composition industry were. Within the ICT industry, the lowest paid group earned an average income of $53, 900, a figure that was recorded to be higher than the national pay average. There is the need to invest more in the growing ICT industry that has presented innovations that are applied to generate economic stability and workforce that work towards the generation of more opportunity in opening the market to sustain development. Further Trends of the ICT Sector The industry has witnessed a growth that has contributed to the development of the GDP, contributing an estimated 4.8%. The average growth annually of the industry has been maintained at 4.7% from 2002. This development has seen a stable contribution towards sustaining the economy to produce the witnessed GDP growth. The strengths in the ICT industry are boosted by the stability maintained by the manufacturing and the service sub-sectors that have implemented strategies, to achieve a growth form that would support the desired results. Industrial Strength The Canadian industry has harbored ICT sectors that have been identified as the fastest growing industries within the North American Region. The Wireless advancement and application system is one of the sub-sectors in the ICT industry that have accommodated the leading performance industry to develop the economy. By 2007, Canadian equipment production industry had a composition of 400 firms, mostly consisting of SMEs, which had 21,000 employees generating revenue of $18 billion. Concurrently, a similar presentation saw Canadian cellular firms comprising 15 countrywide operators that employed workforce totaling 16, 000 employees generating estimated revenue of $10 billion that occupied 30% of the telecommunication market. According to the International Data Corporation (IDC), the wireless industry had developed a growth rate that tripled the figure presented by the other telecommunication networks (Industry Canada, 2010). The other strength by the ICT industry has been witnessed in their efforts to participate in the international market. Canadian Industries have been ranked at the top position for the leading exporter and developer of wireless devices. The technology within the market has generated development of advanced Wi-Fi and WiMAX, SDR, and other applications that are demanded by other nations. Its strategic positioning has led to the advancement of the Wi-Fi based system and the incorporation of the WiMAX system to be incorporated within the market (Benkler et al, 2010). Canada has presented competitors to develop the technology to offer it the opportunity to become a leading participant in the industry. Canada presets developments in cellular devices and satellite technology that is applied within the developing market to provide an opportunity, for market investors to engage their daily routine within the presented technology. Canadian companies have been earmarked as have developed advancement in the generation of digital media that have developed more revenue to the country amounting to $3.4 billion. Within the market, an identified number that amounts 2300 firms, which specialize in the digital media industry (Davis & Schaefer, 2003). This compose of firms that have been developed to specialize in the production of cartoons and development of video games, that have been the leading provisions for the majority of the population composed of the youth. This development has boosted the Canadian ICT center with its technology being applied to accommodate the film industry of an international market to generate an added profit. The investment in technology has seen Canada gain a ranking globally in the production of video games and significant effects after Japan and the USA. These developments are attributed to the contributions of firms in Ubisoft, Electronic Arts and BioWare that have participated in the development of outstanding games recognized in the North American region and globally. Further strengths are attributed to the development of the wireless technology that is applied in the majority of mobile handsets and computer programs. Canadian ICT has been expanded into the e-health technology that has boosted the health sector to reduce witnessed cases of accident, and help in administration of first hand medical care. Canadian IT has been applied in the security sector with a total revenue generation of $1.2 billion revenue. These forms of security have been extended to biometrics, encryption, cyber security and product authentication services (Davis & Sun, 2006). The population applies the provision to offer life coverage in their attempt to minimize the prevalence of life threatening situations. The strength applied for the ICT industry has been extended to accommodate the business sector and inclusion in completing the transaction. The need to offer security, convenience and a high entertainment level has been the provisions that have supported the ICT department. With increased intellectual capability, and a system that favors the work force behind the success of the industry, Canadian ICT industry has grown to be recognized globally as a measure to generate an impact required to boost development. Performance of the industry Data borrowed from Industry Canada has suggested that the ICT sector has grown as a dynamic and worldwide economic front experiencing consistent development since 2002. This figure is obtained from its influence on the GDP that has increased by 34% since 2002, growing annually at a 5% rate. A record had been established by 2008 when the output in the ICT sector had grown to outpace the growth of the entire Canadian economy (Organisation, . E. C.-D., 2000). The same year saw the Industry contribute $604 billion towards the development of the economy increasing by 3.3% from the previous year. The real ICT position elevated in late 2009 after the global economic crisis that had been realized during the third quarter in 2008 to the third quarter of 2009. The increase had been extended to the first quarter of 2010 suggesting an increase of 1.3%, a figure predicted to resemble the 1.5% margin that saw all outputs in the Canadian Industries. This is the evidence existing to suggest the recovery from of the ICT Industry. The Branham group had predicted the growth to extend to 2009 fiscal year with the top ICT firms totaling 250 generating a revenue of $71 billion, a 43% increase from the figure that had been recorded in 2003 (Anderson & O’Shea, 2010). In regional development analysis, Ontario decreased in the number of firms owning shares in the top 250 firms and had a number of 57% share in the total contribution to GDP. Quebec’s shares had elevated slightly, with B.C and Alberta showing no change. In the ICT sub-sectors, the regions that showed improvement included software, ICT hardware and services, infrastructure and the majority of the service delivery departments. The hardware and infrastructure sector had occupied a 25% share in the 250 industries at the top within the economy and these felt the most impact from the recession. The group had been singled as the department witnessing a decline in its revenue with a 21% recorded a decrease in value. The other firms in the top 250 that offered professional services had been positively affected with a similar percentage increase. Of all the sub-sectors, the service providers grew the most making a contribution of the 250 firms amounting to 39%. The mostly realized provision was a decrease in the R&D investment and marketing services as firms struggled to generate the majority of the profits. The measures have been majorly applied in firms like Ottawa, Vancouver and Toronto that have set leading examples for the ICT performances (Lipsey, Nakamura & Canada, 2006). Output and Exports The output has grown in the manufacturing and service sub-sectors with the later holding a more growth realization that the latter. This growth has been boosted by the involvement of recruiting services over the recent ears with a shortage in the workforce to help develop the ICT sector. The GDP generation within the service industry had since realized a stable growth with a set figure contributing to the economy. The growth has been consistent through the recession period growing by 3% by 2008 to report a figure of $48 billion. Telecommunications sub-sector has contributed to a figure of 37% generation in revenue within the ICT industry and a 2% contribution to the Canadian GDP. The department had been the mostly realized contribution towards the GDP by 2008 reporting revenue of $620 million contribution. The department was followed by the CS design sub-sector that reported a $520 million increase in the same year The effect of the recession had affected the service sub-sector that had struggled to recover in the first quarter of 2010 with a minimum increase of 0.2% (Bramwell & Wolfe, 2010). The recession had affected other departments with the software sub-sector holding the majority of the decline with a 4.6 % figure. However, the decrease witnessed in the number of outputs within these departments has led to recovery that has stabilized the industry to gain its initial place within the economy (Industry Canada, 2010). Though there has been a witnessed increase in the outputs within the ICT sub-sectors by 2010, a significant drop in the exports has been recorded. The drop has been witnessed within the quarters and is expected to continue affecting the development of the economy to the lowest point. The drop is arbitrated to drop in the export of electronic products (7% decrease), instruments (5% decrease) and communication gadgets (4%). The exports to the US have fallen by 4.5%, and are expected to decline into the fourth quarter of 2010 (Industry Canada, 2011). The figure contrast the recorded value of exports to the Asia Pacific and the EU that saw Canada increase its exports by 2.6 % and 4.5% respectively. Revenue Recorded The revenue collected has been recorded to articulate the gains acquired between 2002 and 2008, and the figure had been recorded to rise from $130.8 up to $155.3 billion in 2008. Revenue recorded to rise had been found to reflect a figure of 19% increase. There had been a recorded increase of 3% by 2008, and a subsequent drop of 0.8%. The revenue included in the manufacturing sub-sector has been depicted to decline by 14% from the figure recorded in 2002. The 2008-2009 recessions saw a decrease in revenue by a 9.0% margin. The sub-sector that recorded the majority in the decline of total revenue was the computer equipment sector (30.7% decrease). Electronic components reduced by revenue of 23.6%, wired communication devices (14% decrease). Other sub-sectors had revenues that increased to accommodate development, and these included audio and video appliances to increase by 8% (Bramwell & Wolfe, 2010). Contrast to the recorded information, the ICT sector, has grown since 2002, recording a change of 43%, growing at an average rate of 5.3%. The remarkable figure has been included to highlight a 60% generation of the total ICT revenue collected. The 2008 -2009 recession failed to make an impact on the ICTs revenue generation as the growth had been consistent. In 2008, the services by the ICT sector had witnessed a growth of 33% with the majority of the contribution from CS design and communication services (Industry Canada, 2010). The most growth on the individual sector had been recorded by the wireless department that witnessed a 16.6% growth. The recorded figure in the industry had witnessed an increased figure in the revenue generated amounting to a 2.9% increase by 2008. The sub-sectors within the ICT industry had been increasing in revenue by figures that were recorded to vary from 2.5% to 4.0%, with the exception in the software industry that had recorded a decrease. The revenue generated in the ICT company had been recorded at a figure $92.8 billion, by the 2009 fiscal year (Bramwell & Wolfe, 2010). Strategy applied and Stakeholders Despite the strengths and dynamism of the industry, concerns have been put for the failure to compete with other developed economies. The stakeholders within the industry have been venture capitalists, the veterans to the Canadian industry and government officials who presents influences to the industry development. ITAC (Information technology association of Canada) has been established to represent an estimated 120 ICT companies involved in the health sector. The analysis of the statistical data has been boosted by the provision of the Branham group that presents the unbiased analysis of the available presentations. Another stakeholder in the CCICT (Canadian Coalition for Tomorrow’s ICT Skills) is a body that handles constraints presented within the labor shortage in the ICT industry. It is a coalition that has been composed of academic institutions, companies and other organizations that presents an interest I developing the ICT sector. The talent generation and identification within the sector is promoted by the Information Technology Council (ICTC) partnering with other stakeholders and the government to prepare a high skilled labor force. The policies applied by the government have been directed to harbor the economic growth and lead to sustainability within the economy as they seek to create a highly qualified group within the sector. The taxes imposed on the R&D sector have been significantly subsided to offer an environment that offers added innovative measures. These policies may be applied through the broadband infrastructure to sustain the human capital development. The governments have also applied the green ICT policies to benefit growth in the green growth. The Communications Research Center Canada (CRC) applied by the GC to offer R&D incentives in telecommunication sub-sector witnesses tremendous outputs. CANARIE inc runs Canada’s fast networks and presented as the singular fiber optics, satellite and network enhancing body, with Precarn supporting the sustenance of the R&D sector. The policy applied by the Industry by the government would be seen to target the incorporation of more qualified individuals within the industry. Through involving key stakeholders to issue initiatives to present the basis of knowledge transfer via developing leadership styles to present high skill generation within the industry. Furthermore, the SITT is expected to offer Canadian Industry with technical knowledge and special technological advances to bridge the gaps in ICT to aid technologies available into competitiveness. The intellectual property concept is applied through these sectors that provide ownership to the identified sub-sectors and act through the integration of policies applied by the industry. The government offers regulation as highlighted in this section to offer consulting services and desired financial provisions in supporting the sub-sectors through building a strong foundation in producing high skilled labor. Challenges in the Canadian ICT sector The industry has been a major contributor to the development of the economy in Canada and hence faces developments that have threatened its sustainability. Developments have been established to develop the Canadian digital input to maintain the contribution it presents on the GDP. The implication presented to boost the sector has been divided into four distinct entities. First, argument has been to elevate the performance of the managers within the manufacturing sub-sector to present a competition that would promote sustainability within the global scale. Secondly, the improvements made would realize sustenance to the features that it supports, with developmental sectors reliant on the ICT organization for development. Evidence has suggested that Canadian companies in the other industries have lagged in competition presented by the U.S companies, and other leading countries with the input presented by the ICT center. The lag enables the industries to seize in competing with other companies presented in the developing society. Third, the ICT sector has been highlighted as the industry capable of economic recovery, with evidence suggesting its turnover after the recession. It, therefore, presents an enourmous opportunity to the employment sector in harsh economic experiences (Mandel, 2010). Finally, technology and management capability are fundamental to the development of the industry similar to innovation and capital generation, but there is a shortage in the desired skills to deliver the result to establish the growth. Lack of enough Flagship industries The problem in the ICT small-scale firms industry has resulted in the lack of large firms, to deliver, the right work force in result completion. Small-scale firms that are the greater number of those involved in the production dominate the industry. Majority of the companies within the ICT sector are individually owned or rely on a small workers scale to offer services to their local clients. Reduced R&D involvement Canada has been characterized by low investment in the research department. However, there has been increased involvement by the ICT sector on other industries and, new innovative inputs, are desired. With reduced involvement in research, there may be low investment in the sector with a shortage of qualified professionals. Although it has found a generation of a 5% in total Canadian GDP, R&D spending has witnessed a larger share in the economy with a $6.2 billion figure in 2008. Funding The inability to achieve a stable development has been related to the poor funding that the sector has achieved. There is the need to gain interest in the technological advances presented in the market with the need to expand the service sub-sector. Main hindrance to the sector has been attributed to the tax treatment in the R&D department linked to the share gained in the poor local and international investment. Shortage of highly qualified staff The ICT industry contributes to the development of GDP in Canada. However, there is the need to maintain its stature within the economy to achieve a consistent figure in delivering economic growth. The industry has been highlighted to hold qualified personnel to aid in the innovative process that promotes development. The advantage that Canada has gained should be maintained to create the opportunity needed to develop and thrive in the economy. Conclusion The ICT industry in Canada has proven to be the leading sector that promotes development within the economy. The industry has witnessed a steady growth in the development sector since 2002 and is expected to yield results in the subsequent year. With challenges presented in the shortage of qualified and skilled workers, the industry is expected to offer more opportunities to graduates. The sector contains a class of graduates who have been trained to deliver results based on current economic trends. Canadian ICT sub-sectors have been pivotal in generating added revenue to the economy. References Benkler, Y., Faris, R., Gasser, U., Miyakawa, L., and Schultze, S. (2010). Next Generation Connectivity: A Review of Broadband Internet Transitions and Policy from Around the World. Berkman Center for Internet & Society, Harvard University. Cambridge, Mass. Bramwell, A. and Wolfe, D. (2010). Growing the ICT Industry in Canada: A Knowledge Synthesis Paper. Utorronto. Retrieved on 14 March 2012, from: Davis, C. and Schaefer, N.V. 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