The Innovation Imperative: Why Canada needs to bridge the digital divide to reach its innovation potential


In this series of columns, researchers from the Innovation Policy Lab at the Munk School of Global Affairs and Public Policy explore Canada’s key innovation challenges. This week, Dan Breznitz and Dan Munro on why investment in access and education are needed to avoid a generation of ‘lost Einsteins.’

Canada’s embrace of digital technologies has accelerated dramatically during this past year of COVID-19 economic and social disruption. Research, education, innovation, commerce and socializing increasingly rely on digital platforms and technologies and people with the skills to use them. Some are thriving in the new digital reality, and there is evidence that others are making investments that will equip them to participate and succeed. But there are persistent gaps in access and uptake that threaten innovation, prosperity and the well-being of people and communities across the country.

The quality, accessibility and affordability of digital infrastructure across Canada, as well as the state of digital skills and literacy, are well below what Canada needs to provide opportunity for all and maximize our collective economic and social potential. Millions of Canadians, including entire communities, are excluded from education, economic and social life, and risk falling so far behind that they will forever be marginalized. That is neither fair to them, nor good for Canada’s innovation economy.

Consider entrepreneurship. Before the pandemic, Canadian retail businesses were slow to develop e-commerce capabilities. As late as 2017, less than 20 per cent of Canadian firms were set up to take orders online — far behind firms in New Zealand (50 per cent), Australia (46 per cent) and other leading countries. However, by May 2020 — just a few months into COVID-related restrictions — e-commerce sales were up 111 per cent versus May 2019 — with almost all of the increase occurring in March and April.

While these results seem promising, businesses in rural areas with poor internet infrastructure are struggling to connect. In other cases, entrepreneurs operating in locations with decent internet infrastructure face costs that are too high to allow then to connect. Challenges with digital accessibility and affordability are leaving too many entrepreneurs behind and undermining the contributions they could make to employment and regional economic development. Canada is already an innovation laggard and we cannot afford to fall even further behind.

We face similar challenges educating young Canadians in the midst of a digital shift and pandemic. While the reading, math and science performance of Canadian 15-year-olds on international assessments is above the OECD average, and our post-secondary educational attainment continues to be among the highest in the world, there are long-standing disparities in achievement that track socio-economic, regional and racial dimensions. Many of these are exacerbated by the digital shift and pandemic. What’s more, Canadian students’ opportunities to develop the skills they need in the digital age — including technical skills, digital literacy and cyber safety and security — are insufficient and there are significant disparities in availability by region, income and other factors.

Access and affordability gaps in digital infrastructure and technologies are robbing many young people of a decent education and, with it, the foundation they need to lead good lives and contribute to Canada’s economic growth. Remote and virtual learning arrangements reflect and entrench a glaring digital divide. While nearly 85 per cent of Canadian households are equipped with internet speeds consistent with the minimum standard set by Canada’s Connectivity Strategy, just 37 per cent of rural households and 28 per cent on First Nations reserves have the infrastructure to meet this standard. Even where internet infrastructure is adequate, lower-income households struggle to afford broadband subscription and devices to connect. Faced with these barriers, many students are falling behind or logging off entirely.