Thank you very much. I'm very pleased to be here today.
Rather than reinforce some of the comments that have been made by the other panellists, I'd like to speak on behalf of Ryerson with respect to our view on innovation processes, on the role of universities in research and development as well as in developing digital skills. I will follow up with a brief; I'm afraid I wasn't able to have it ready for today's presentation.
When we think about innovation in Canada as a process, or entrepreneurship, there are essentially three levels. We've heard a lot about the importance of creating an environment that enables innovation and enables entrepreneurship. There are two other pieces that are equally important; that is, having entrepreneurial processes and understanding the processes of technology adoption, as well as having individuals with the appropriate entrepreneurial mindset. I think the universities play a particular role in those two levels, and that's what I'll focus on.
When we look at the adoption of e-commerce in Canada, I think it's important to differentiate between access to the Internet and the use of e-commerce. The data I've recently reviewed with my colleagues suggests that in fact the Canadian adoption of consumer-based e-commerce is far beneath what we see in the United States. Whereas about 8% of retail expenditures in the U.S. are e-commerce-based, in Canada it's only about 1%. There are numbers of reasons for that, but I think it's important that we actually consider where we are from a global perspective.
One of the reasons for that.... That's simply the consumer side, but if we look at the business side and B2B, which has already been mentioned, we see a tremendous variance between sectors and also within sectors. So when people comment on low rates of productivity and low rates of technology adoption, I think it's very important to understand that often the data reflects averages. Very often, what you have in a sector--for example, retail--is a very high investment with very high payoff and perhaps a low investment with no payoff, or a high investment with no payoff. It's critically important to disaggregate the data so that you have a really good picture of where the success stories are and where the failures are. I don't think we do that enough.
The other thing that I think is critically important to understand—and we did fairly extensive research with ITAC and CATA on this dimension—is that many of the barriers to adoption in the SME sector are not, strictly speaking, technology barriers. There is a lot of focus on technology, and clearly it's important. Clearly, infrastructure is important. But we also see that very often the skills needed to assess the links between technology and corporate objectives are simply missing. The business case for technology adoption is often missing. Many of the vendors exacerbate this problem by pushing the technology rather than looking carefully at market demand.
I won't talk about that in great detail, but there is very good evidence to suggest that if you want to accelerate the adoption of e-commerce, you have to ensure that the business case is well understood, because particularly for the S's among the SMEs, if they don't see an impact on the bottom line, they're not going to invest in the technology and they're certainly not going to invest in the people who are required to make the technology work.
When it comes to post-secondary institutions, then, there are really four levels at which they can contribute. One is in terms of digital skills, and I want to say a couple of words about that. The second is in terms of research. There, we're talking about the discovery-based kind of research that has helped Canada build its infrastructure, and also about market-driven research, which helps develop products and services as well as new processes. Universities play an important role in terms of innovation and commercialization processes, and they can also play a much more important role than they currently do as model users.
Just as government ought to be a model user when it comes to e-commerce—and Service Canada is a good example of how government has done that—universities are often lagging behind with respect to the adoption of technology.
When it comes to digital skills we hear a lot about STEM: science, technology, engineering, and mathematics. There is no question that STEM education is fundamental to creating a digital economy, but it's not sufficient. We would argue that an equal emphasis on things like entrepreneurship and management is important if we're actually going to get the promised benefits out of the technology as well as basic digital literacy. We need to ensure not only access to the tools, but also effective use of them.
At the high level, it isn't simply engineering and computer scientists that we need; we also need content creation. If you look at what will accelerate certain segments of the e-commerce market, it has more to do with content creation, effective narratives, and understanding consumers than it does with bits and bytes.
The focus of Ryerson's digital media research and work in e-commerce is very much driven by partnerships with industry. There are a number of federal government programs that are particularly valuable in promoting market-driven research.
We have a number of recommendations. To begin with, understanding the nature of innovation is critical. Second, we need to understand that digital skills are part of the human infrastructure, if we are to make use of e-commerce effectively. Third, we must unleash the talent of young people, something that we don't do enough of. Fourth, we should be making sure we have collaborative models to support research that brings industry together with the universities. Finally, we must ensure that we understand not just conventional academic measures for judging research, but also measures that reflect value for money and impact. There's a lot more that can be done in these areas.
Thank you.