Connectivity
Key Messages
- Canada’s performance is near the bottom of the 16-country comparator group.
- Connectivity is critical to innovation, given the role the Internet plays in all aspects of business, government, science, academia, and social interaction.
- Numerous factors could explain Canada’s lagging score on this indicator, ranging from Internet pricing to socio-economic factors to the rural–urban divide.
Why is connectivity important to innovation?
The Internet has become a critical infrastructure for all areas of business, government, science, and academia, as well as social interaction. All entities in society now depend on the Internet to exchange and spread information, data, and knowledge. The four types of firm-level innovation identified by the OECD—product, process, marketing, and organizational innovation—all depend on the Internet.1 Innovation is, however, a much broader concept than innovation within firms—it covers the entire spectrum of participants and their activities, both in the public and private domain.2
Innovation is driven in many ways, including procurement by the public sector, public-private partnerships,3 and new forms of interaction between governments and citizens.4 To the extent that innovation involves the exchange and implementation of ideas and concepts, the Internet is a critical component of these processes.
How is connectivity defined in the report card?
The connectivity report card has two subcategories: fixed broadband and wireless broadband. Fixed broadband includes all subscriptions to digital subscriber lines (DSL) offering Internet connectivity, cable modem, fiber to the premises (e.g., house, apartment, business office), and fiber to the building (e.g., apartment local area network—LAN), and other broadband over power lines capable of download speeds of at least 256 kbit per second.5 Fixed broadband numbers include business and residential connections. Wireless broadband includes subscriptions with advertised download speeds of at least 256 kbit per second through satellites, terrestrial fixed wireless, and terrestrial mobile wireless (but excludes Wi-Fi, because the lines supporting Wi-Fi are already counted in the fixed-broadband subscriptions).6
How does Canada’s performance compare to its peers?
Canada gets a “D” and ranks 14th out of 16 peer countries on the connectivity indicator. Canada has 73 broadband subscriptions per 100 inhabitants, compared with 134 in the first-ranked country, Sweden.
Who are the leaders in the connectivity report card?
The leader in connectivity report card is Sweden, which earns an “A” grade. Four other countries—Denmark, Finland, Australia, and Norway—also earn “A”s.
Has Canada’s connectivity performance improved?
Data are available only as far back as 2010, but they show a dramatic improvement in connectivity for most countries. Broadband Internet subscriptions in Canada increased from 48 per 100 people in June 2010 to 73 in June 2012. Other countries with large increases were Finland, Australia, and Belgium.
Does Canada’s performance on fixed broadband subscriptions differ from that of wireless?
Yes. Canada’s fixed broadband subscription rate was about equal to that of the 16-country average. Canada fared worse on wireless broadband, however, reporting a subscription rate of 41 per 100 people compared with the 16-country average of 68.
However, the growth in Canada’s wireless broadband subscriptions has been much higher than the growth in fixed broadband subscriptions. Fixed subscriptions increased from 30 per 100 people in June 2010 to 32 in June 2012. Wireless subscriptions grew from 18 per 100 people to 41.
Do broadband prices and speed matter?
Canada’s median broadband purchase price of US$3.29 per Mbit per second was the 5th-highest price among 16-country peer group in September 2011. The 16-country average was US$2.73 per Mbit per second.
Canada’s median broadband download speed of 24,576 kbits per second puts Canada in 6th place among the 16 peer countries.
What about ultra-high-speed data networks?
Another measure of connectivity, albeit outside consumer use, is the ultra-high-speed data networks that cater to academia, hospitals, and government laboratories. These networks—which typically operate alongside commercial networks—carry massive data sets like climate models, satellite images, 3D models and simulations, and computational fluid models. They also provide digital R&D environments for product design, prototyping, validation, and demonstration.7
The role of these networks in routing data is critical for national and international research programs that fuel innovation. In the field of ultra-high-speed computer networks catering to the science and education communities, Canada’s CANARIE network has the second-highest usable capacity, behind the UK’s JANET network.
What can Canada do to improve its grade?
One first consideration is pricing. Of the four countries that have higher median prices for Internet (U.S., Switzerland, Ireland, and Germany), only one, the U.S., has a score of “B” or higher on the connectivity report card. Switzerland and Ireland score a “C”, and Germany’s “D” places it below Canada.
Another factor affecting connectivity may the socio-economic status of households. A study published in 2005 on Internet adoption concluded that, “in the simplest of terms, privileged Canadians are online, while their less-privileged compatriots are not.”8
A third factor may be the relatively slow adoption of using websites for sales by Canadian businesses.9
A final factor could be the digital divide between urban and rural Canadians, although this last factor may be less important in light of new technologies.10
Progress in all of these factors could result in a higher uptake of broadband Internet subscriptions, and therefore higher Canadian connectivity.
Footnotes
1 OECD, Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd Edition. (Paris: OECD, 2005).
2 Knut Blind, “The Internet as Enabler for New Forms of Innovation: New Challenges for Research.” Paper prepared for the 1st Berlin Symposium on Internet and Society, October 25–27, 2011, 5.
3 Ibid.
4 Governments use the Internet to improve interaction with citizens, such as obtaining information, filling out forms, or filing taxes. Also, consultations on certain government initiatives (e.g., new policy directions on energy conservation) can be provided directly online, making physical interaction unnecessary. As well, citizen input during policy development may be solicited directly online.
5 OECD, OECD, Science, Technology, and Industry Outlook 2012 (Paris: OECD, 2012), 419.
6 Ibid., 420.
7 CANARIE, Canada’s Advanced Research and Innovation Network. (Ottawa: CANARIE, 2011).
8 C.A. Middleton and Christine Sorensen, “How Connected Are Canadians? Inequities in Canadian Households’ Internet Access.” Canadian Journal of Communications 30 (2005), 463.
9 According to survey of over 2000 small and medium-sized business in Canada, while 93 per cent of Canadian small and medium-size enterprises have an Internet connection, only 74 per cent have a high-speed connection, 70 per cent have established a website, and 18 per cent make online sales. CEFRIO, Use of ICT by Canadian SMEs: A Survey of Over 2000 Companies (Montréal: CEFRIO, 2011).
10 Rita Trichur, “Satellite to Shatter Urban-Rural Digital Divide,” The Globe and Mail, July 5, 2012.
Innovation Indicators
Has Canada’s connectivity performance improved?
Data are available only as far back as 2010, but they show a dramatic improvement in connectivity for most countries. Broadband Internet subscriptions in Canada increased from 48 per 100 people in June 2010 to 73 in June 2012. Other countries with large increases were Finland, Australia, and Belgium.
Who are the leaders in the connectivity report card?
The leader in connectivity report card is Sweden, which earns an “A” grade. Four other countries—Denmark, Finland, Australia, and Norway—also earn “A”s.
How does Canada’s performance compare to its peers?
Canada gets a “D” and ranks 14th out of 16 peer countries on the connectivity indicator. Canada has 73 broadband subscriptions per 100 inhabitants, compared with 134 in the first-ranked country, Sweden.
How is connectivity defined in the report card?
The connectivity report card has two subcategories: fixed broadband and wireless broadband. Fixed broadband includes all subscriptions to digital subscriber lines (DSL) offering Internet connectivity, cable modem, fiber to the premises (e.g., house, apartment, business office), and fiber to the building (e.g., apartment local area network—LAN), and other broadband over power lines capable of download speeds of at least 256 kbit per second.5
Fixed broadband numbers include business and residential connections. Wireless broadband includes subscriptions with advertised download speeds of at least 256 kbit per second through satellites, terrestrial fixed wireless, and terrestrial mobile wireless (but excludes Wi-Fi, because the lines supporting Wi-Fi are already counted in the fixed-broadband subscriptions).6
Why is connectivity important to innovation?
The Internet has become a critical infrastructure for all areas of business, government, science, and academia, as well as social interaction. All entities in society now depend on the Internet to exchange and spread information, data, and knowledge. The four types of firm-level innovation identified by the OECD—product, process, marketing, and organizational innovation—all depend on the Internet.1
Innovation is, however, a much broader concept than innovation within firms—it covers the entire spectrum of participants and their activities, both in the public and private domain.2
Innovation is driven in many ways, including procurement by the public sector, public-private partnerships,3
and new forms of interaction between governments and citizens.4
To the extent that innovation involves the exchange and implementation of ideas and concepts, the Internet is a critical component of these processes.
Key Messages
- Canada’s performance is near the bottom of the 16-country comparator group.
- Connectivity is critical to innovation, given the role the Internet plays in all aspects of business, government, science, academia, and social interaction.
- Numerous factors could explain Canada’s lagging score on this indicator, ranging from Internet pricing to socio-economic factors to the rural–urban divide.
Does Canada’s performance on fixed broadband subscriptions differ from that of wireless?
Yes. Canada’s fixed broadband subscription rate was about equal to that of the 16-country average. Canada fared worse on wireless broadband, however, reporting a subscription rate of 41 per 100 people compared with the 16-country average of 68.
However, the growth in Canada’s wireless broadband subscriptions has been much higher than the growth in fixed broadband subscriptions. Fixed subscriptions increased from 30 per 100 people in June 2010 to 32 in June 2012. Wireless subscriptions grew from 18 per 100 people to 41.
Do broadband prices and speed matter?
Canada’s median broadband purchase price of US$3.29 per Mbit per second was the 5th-highest price among 16-country peer group in September 2011. The 16-country average was US$2.73 per Mbit per second.
Canada’s median broadband download speed of 24,576 kbits per second puts Canada in 6th place among the 16 peer countries.
What about ultra-high-speed data networks?
Another measure of connectivity, albeit outside consumer use, is the ultra-high-speed data networks that cater to academia, hospitals, and government laboratories. These networks—which typically operate alongside commercial networks—carry massive data sets like climate models, satellite images, 3D models and simulations, and computational fluid models. They also provide digital R&D environments for product design, prototyping, validation, and demonstration.7
The role of these networks in routing data is critical for national and international research programs that fuel innovation. In the field of ultra-high-speed computer networks catering to the science and education communities, Canada’s CANARIE network has the second-highest usable capacity, behind the UK’s JANET network.
What can Canada do to improve its grade?
One first consideration is pricing. Of the four countries that have higher median prices for Internet (U.S., Switzerland, Ireland, and Germany), only one, the U.S., has a score of “B” or higher on the connectivity report card. Switzerland and Ireland score a “C”, and Germany’s “D” places it below Canada.
Another factor affecting connectivity may the socio-economic status of households. A study published in 2005 on Internet adoption concluded that, “in the simplest of terms, privileged Canadians are online, while their less-privileged compatriots are not.”8
A third factor may be the relatively slow adoption of using websites for sales by Canadian businesses.9
A final factor could be the digital divide between urban and rural Canadians, although this last factor may be less important in light of new technologies.10
Progress in all of these factors could result in a higher uptake of broadband Internet subscriptions, and therefore higher Canadian connectivity.
Footnotes
1 OECD, Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd Edition. (Paris: OECD, 2005).
2 Knut Blind, “The Internet as Enabler for New Forms of Innovation: New Challenges for Research.” Paper prepared for the 1st Berlin Symposium on Internet and Society, October 25–27, 2011, 5.
3 Ibid.
4 Governments use the Internet to improve interaction with citizens, such as obtaining information, filling out forms, or filing taxes. Also, consultations on certain government initiatives (e.g., new policy directions on energy conservation) can be provided directly online, making physical interaction unnecessary. As well, citizen input during policy development may be solicited directly online.
5 OECD, OECD, Science, Technology, and Industry Outlook 2012 (Paris: OECD, 2012), 419.
6 Ibid., 420.
7 CANARIE, Canada’s Advanced Research and Innovation Network. (Ottawa: CANARIE, 2011).
8 C.A. Middleton and Christine Sorensen, “How Connected Are Canadians? Inequities in Canadian Households’ Internet Access.” Canadian Journal of Communications 30 (2005), 463.
9 According to survey of over 2000 small and medium-sized business in Canada, while 93 per cent of Canadian small and medium-size enterprises have an Internet connection, only 74 per cent have a high-speed connection, 70 per cent have established a website, and 18 per cent make online sales. CEFRIO, Use of ICT by Canadian SMEs: A Survey of Over 2000 Companies (Montréal: CEFRIO, 2011).
10 Rita Trichur, “Satellite to Shatter Urban-Rural Digital Divide,” The Globe and Mail, July 5, 2012.