| || ||Daniel Munro |
Principal Research Associate
The reality of Canada’s less-than-stellar innovation performance is well known. For nearly two decades, Canada has earned a grade of “D” on innovation, and it consistently ranks near the bottom of 16 countries assessed in The Conference Board of Canada’s How Canada Performs Report Card on Innovation. Until recently, moreover, Canada’s track record on the related productivity growth indicator has been dismal, achieving grades of “C” or “D” relative to international peers. Although we improved relative to peers in 2012, this had more to do with productivity declines in European countries than real improvement in Canada.
There are many reasons why Canada lags on innovation and productivity. One area that stands out is the poor performance of Canadian firms in adopting and implementing digital technologies that support higher productivity and innovation.1 Canadian firms’ investment in ICT is 17 per cent of non-residential gross fixed capital formation—lower than the average rate of 18.5 per cent among 15 peer countries, and well behind leaders such as the United States, Sweden, and Denmark, each of which invests 25 per cent or more. Canada achieves a grade of “D” and ranks 8th of 15 peer countries on ICT investment. Over time, this gap between Canada’s investment level and that of its peers can produce substantial differences in productivity.
Why do Canadian firms lag on ICT investment and what can be done to stimulate more?
Understanding Challenges and Exploring Solutions
To better understand the challenges, and to explore solutions, the Conference Board, in partnership with NRC-IRAP, convened a series of workshops with SMEs, and technology and change management experts. Held in Winnipeg, Edmonton, and Calgary during January 2015, each workshop brought together between 20 and 30 individuals to share their experiences with technology-driven change, including challenges and strategies to improve success.
Based on their contributions and additional research, the Conference Board is preparing a briefing that will characterize the opportunities and challenges, and offer strategies and solutions to assist SMEs in adopting and implementing ICTs and other technologies. While the briefing will provide greater detail, three prominent themes emerged in the discussions that could inform other firms’ thinking and planning around implementing technologies to enhance productivity.
- Clarity of Value and Vision. Many participants highlighted the need to have a clear sense of the value that specific technologies can bring to one’s business, and to ensure that a clear vision for change is articulated and communicated to all employees. Firms that lack understanding of the specific productivity enhancements and transformation benefits they hope to achieve may adopt irrelevant technologies and, in doing so, impair rather than improve overall performance. Additionally, change managers should clearly and frequently communicate value and vision to sustain focus and motivation.
- Enlisting Expertise. Access to change expertise was another theme. Recognizing that successfully implementing new technologies is as much a management challenge as a technical challenge, many participants remarked that it can be difficult to find people with the technical and management skills needed to facilitate change.2 Intermediary organizations, such as NRC-IRAP, The Business Development Bank of Canada (BDC), TEC Edmonton, Innovate Calgary, and others, provide excellent technical and management assistance that many firms have relied on to bridge gaps. But participants emphasized that change must be led by someone inside the firm, as only an insider will have a good understanding of the business and how change relates to the firms’ objectives.
- Resources and Returns. Not surprisingly, many participants noted that scarcity of time and money causes them to delay the adoption of digital technologies that could improve their businesses in the long term. However, no participant said that time and money constraints prevented them from pursuing technology change entirely. Many indicated that they simply had to reach a “pain point” before acting.
Rather than focusing on barriers to change, firms tended to be more concerned with implementation challenges—such as minimizing cost uncertainties, financing ICT investments, managing risks, and achieving a balance between day-to-day operations and change. In short, most firms recognize that implementing new technologies is an investment in the future of the business. As one participant remarked, firms need to realize that “the long-term costs of not implementing new technologies can far outweigh the short-term costs of making changes.”
While these observations alone do not provide detailed guidance to SMEs implementing new technologies, they do highlight considerations that can improve firms’ thinking and planning. The Conference Board’s briefing on effectively navigating and managing technology-driven change, which builds and expands on these insights, will be published in spring 2015. Two webinars to discuss the findings and provide guidance to SMEs are scheduled for February 25 (with Paul Preston, Associate Director, Technology and Innovation) and March 20 (with Daniel Munro, Principal Research Associate, Public Policy).
How to Effectively Navigate and Manage Technology-Driven Change
Live Webinar Daniel Munro on March 20, 2015 at 3:00 PM EDT