Thank you, Mr. Chair, and members of the committee.
On behalf of my colleagues at IBM Canada, we are pleased to have the opportunity to provide input on your consideration of the e-commerce marketplace in Canada. With a view to being brief, there are really three key points that I want to put forward today—and I'm sure we could follow up on them in answering questions.
The first is that our understanding of electronic commerce needs to evolve beyond the notion of transactions, given the sheer transformation of the Internet and the means by which businesses, consumers, and government interact over it. Indeed, at IBM we increasingly talk about and see an Internet of things, in which anything—any device, physical or natural; system; or ecosystem—can communicate with another and create the basis for a new economic or public policy strategy.
The second point is that this transformation is spawning the evolution of what we believe is smarter commerce, rather than electronic commerce, the former broadly defined as the capacity to translate immense flows of data into intelligence, and intelligence into new economic value.
The third, and here I am getting to the public policy level, is that Canada's comparative advantage in the digital economy, we think, will be contingent upon the ability of our businesses and governments to create value and advantage out of superior intelligence and insight.
Jumping ahead just a bit, Mr. Chair, we would suggest that our thinking on electronic commerce and the government's consideration of it should really give way to the idea of a smarter commerce agenda. At the core of this agenda is the intelligent enterprise. While these enterprises are doing many things, we find that there are two core building blocks they are leveraging in becoming intelligent enterprises. The first is their ability to leverage an increasing array of software and related technologies to turn instinct and intuition into insight and intelligence. IBM refers to these tools—and frankly we're not alone—and technologies as analytics, or the use of information to find patterns, create scenarios, make predictions, and to identify new possibilities.
The second is the adoption of emerging services-oriented models for accessing necessary technology, be it networking, infrastructure storage, applications, and business processes. The most prominent and compelling model to emerge is cloud computing. In very simple terms, cloud computing is a new model for accessing and delivering information technology and business services. Its relevance to policy is its potential to reduce the opportunity cost of investing in technology. Cloud computing helps to reduce costs, complexity, and management resources—several of the conventional barriers to IT adoption and use by SMEs.
These options are increasingly available to businesses in Canada to help them become intelligent enterprises and leaders in smarter commerce. Government can take several positive steps to facilitate and advance this agenda. I highlight some of the following.
One, we believe that public support to stimulate business investment in information and communications technologies needs to be flexible and focused on innovation outcomes as opposed to specific technology inputs. Support should facilitate innovative and, most likely, services-oriented approaches to developing an increased capacity for business intelligence.
Two, government should develop an intelligent infrastructure road map for Canada that is premised on a comprehensive vision for digital advantage—instrumented, interconnected, and intelligent. Investments in digital infrastructure create multiplier effects as good as or better than investments in bricks and mortar. Thus, investments in smarter energy grids, intelligent transportation systems, and smarter health systems, among others, are investments in innovation platforms for SMEs to build on.
Three, a research, innovation, and collaboration strategy should be pursued that will position Canada as a global leader in the development and export of intelligent technologies and solutions. We have a significant opportunity in this space, and with the right partnership we can export the technology that governments and industries around the world will need to make their businesses and infrastructure intelligent and innovative.
Four, just as the foundation for smarter commerce is an intelligent enterprise, the foundation for a smarter and more competitive Canada could be considered intelligent government. Without minimizing the scope of the challenge, clearly there are opportunities for federal and provincial governments to consider smarter spending and deficit reductions strategies.
As I wrap up, Mr. Chair, I would like to highlight IBM Canada's shared interest and sense of common cause in this discussion. IBM began operations in Canada in 1917. We have been in Canada for almost all of the 100 years that we have been a company. Our roots in Canada are as deep as our investment is extensive. Our continued ability to attract, retain, and grow our substantial R and D investment in Canada is directly linked to our combined capacity for innovation.
This discussion is an integral part of that broader effort. On behalf of my colleagues, we appreciate the opportunity to comment.