It's actually a pleasure to be able to come here the second time, because the first time we were at the other building, and for us it's always fun to be in one of these rooms, which really is something.
Good morning, Mr. Chair and members of the committee. Thank you for your invitation.
Thank you very much for the introductions.
We have prepared a deck, which I hope you all have. I'll just give you indications as to which slide I'm speaking to.
There are a lot of different ways to approach the subject of disruptive technology. As you begin on your study, I think it's probably useful for us to try to give you context on how we at Industry Canada approach the issue and look at the topic. My presentation will try to cover three main points.
First, new and disruptive technologies obviously create new challenges and opportunities for firms and for industries. Second, the pace of technological change is something that is increasing. It's driven by the pervasive penetration of information and communications technologies. Finally, in the industry portfolio as well as throughout the government, we have a lot of roles that are aimed at spurring technological growth and supporting the competitiveness of Canadian business.
For a staring point, we care about disruptive technologies because they transforms markets. They transform business models and change supply chains and entire industries. But what are disruptive technologies? There is really no single definition. We look sometimes to four key traits. They have speed. We're talking about rapid technological change. They have global reach. They have economic impacts that are significant and unexpected, and they have societal impacts that are often significant and unexpected.
Within these broad parameters, different analysts take very different views as to which technologies should be focused on. They all disagree, but what they don't disagree on is that disruptive technologies have huge economic impact. McKinsey and Company estimates that by 2025, the economic impact of the “Internet of Things” will be between $1.4 trillion and $6.2 trillion. That's a wide range, but both numbers are huge.
On slide three you'll see a selection of technologies as laid out by McKinsey, the World Economic Forum, MIT, and Gartner. The diversity of these things—additive manufacturing, brain mapping, advanced robotics, and agricultural drones—can really be difficult to structure one's thinking around.
Slide four gives you a sense of the lens we use at Industry Canada to try to do that. We find it useful to break disruptive technologies into three groups: platforms, processes, and products. I'll talk about each of these in the next couple of slides.
But first, around the outside of the frame you'll see references to a number of areas of government support and policy that are really important to the development and adoption of technologies. In the centre, we try to emphasize the importance of technological convergence, how technologies are interdependent. They bleed into one another and across traditional scientific disciplines and across different business applications.
Looking at slide five, I'll talk briefly about platform technologies.
Platform technologies, like nanotechnology, for example, are foundations for the development of commercial products and processes. These technologies are often very closely tied to, and supported by, major R and D investments in infrastructure.
Turning to slide 6, we have process technologies.
Process technologies, like additive manufacturing, which is essentially industrial 3-D printing, use technologies in new ways to change how a product is made.
On slide 7 is product technologies. Disruptive product technologies are things like the driverless car, which can redefine the customer experience and create entirely new markets. Disruptive products can quickly create new industry leaders and put others, including well-established incumbents, out of business.
I wanted to make the point that it's really the pervasive impact of information and communications technologies that's at the heart of technological convergence and this rapid pace of technological development that we're seeing today. A great example can be seen in the life sciences area. Bioinformatics is the use of computers to digitally process massive amounts of biological data to better understand biological systems. Bioinformatic modelling can produce insights that can lead to the development of new drugs, vaccines, and diagnostics. All of this in a computer.
It almost goes without saying that technologies have implications for competitiveness, but I said it anyway. Canada is considered an advanced economy in part on the basis of its capabilities in research and development and its successful track record of commercialization in many industries.
At the firm level, companies that thrive get ahead of trends and move away from incumbent technologies before they're overtaken. Kodak is probably the most commonly cited example of a company that didn't do this. It didn't see the advent of digital imaging and the decline of chemical- based photography. Its market cap in 1997 was $30 billion U.S., and it was completely wiped out by 2012.
On the other hand, IBM is probably the most frequently cited example of a company that's the model of reinvention. It sold off its PC and server hardware divisions to put its sole focus on cloud computing and big data analytics.
Reinvention happens at the firm level, but it also happens beyond the individual company. One thing about disruptive technology is that it has serious implications for the nature of work. Increasingly the pace of new technologies coming onto the market really does put the premium on flexibility as a core workforce competency, and it creates an advantage for workers who have a solid footing in the kinds of emerging skill sets that are required.
Finally at the broad social level, changing technology can also give rise to questions of social acceptance. These in turn can give governments reason to re-examine frameworks including norms, standards, and regulations.
What I find interesting is that when we think about the reach of disruptive technologies in the Canadian economy we're really talking about something that has the potential to touch communities and businesses across the country in very tangible ways. Disruptive technologies aren't just about the high-tech sectors like aerospace, ICT, or life sciences. They have the ability to transform business in any sector.
I'll use nanotechnology to illustrate the point.
Nanotechnology in Vancouver is helping reduce the amount of costly platinum that goes into making fuel cell stacks. Getting the cost down is one of the key measures along with infrastructure to deploying this kind of technology on a large scale. In Quebec, nanotechnology is helping develop new lightweight, stronger materials, going into things like spacesuits and making them flexible, more resistant to damage, and embedding them with sensors. Food processing, which people sometimes don't think about as advanced manufacturing, has a footprint across the country and nanotechnology is active there in areas like developing food packaging to kill bacteria and extend product life.
Industry Canada and our federal partners help disruptive technologies move to market through a variety of mechanisms, including scientific research; research labs and infrastructure; direct and indirect support to industry for R and D, commercialization and innovation; and specific partnerships targeting cutting-edge areas such as communication technologies and genomics. We engage with industry and other stakeholders on an ongoing basis across regions and sectors.
Finally, I thought it might be useful to give you a sense of the questions I think would be interesting to pose to witnesses and to consider in your study.
First, how do Canadian companies see disruptive technologies coming down the pike and impacting their business? Second, how have industry, governments, and academia been successfully partnering to advance innovation in disruptive technology? Third, where are Canada's technology development hotbeds? Fourth, what impacts will disruptive technologies have on jobs and work? Last, how do Canada's disruptive technology strengths line up against global trends and future commercialization opportunities?
With that, I'll end my remarks. Thank you very much.