Fact of the Week: The Gap in ICT Investment Between the United States and Canada Widened by 12 Percentage Points From 2008 to 2014

John Wu October 23, 2017
October 23, 2017

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Businesses invest in information and communication technologies (ICT) to raise productivity. By equipping workers and training them in technologies such as cloud computing platforms, personnel management systems, and best-of-breed software, companies become more efficient and increase their output. Aggregated across industries, these ICT-driven productivity gains drive national economic growth.

This is why Canadian policymakers should be concerned that their sluggish economic recovery after the Great Recession could be due in part to businesses there not investing enough in technology compared to their counterparts in the United States. While private investment in ICT per Canadian worker has been lower than U.S. levels since the 1980s, it has dropped to new lows in recent years. In 2008, the difference in private ICT investment per worker in Canada versus the United States was 32 percent, and the gap widened by 12 percentage points to 44 percent in 2014. Meanwhile, from 2008 to 2014, U.S. productivity increased by 8 percent while Canadian productivity increased by just 5 percent.