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Can the Canada-U.S. ICT Investment Gap be a Measurement Issue?

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  • Vikram Rai
  • Andrew Sharpe

Abstract

In 2011, business sector investment per worker in information and communications technology (ICT) in Canada was only 57.8 per cent of the U.S. level, indicating an ICT investment per worker gap of 42.2 percentage points. Numerous explanations have been advanced to explain this gap, one of which is the ICT investment data from Statistics Canada and the Bureau of Economic Analysis are not strictly comparable. We compare the methodology used to measure ICT investment in Canada and the United States and find that issues related to measurement account for approximately 4 percentage points (10 per cent) of the gap. The gap is concentrated in the software component of ICT investment (90 per cent) and in a small number of ICT-intensive industries, in particular information and cultural industries. The article concludes that the Canada- U.S. ICT investment per worker gap is largely the result of industry-specific factors that affect software investment.

Suggested Citation

  • Vikram Rai & Andrew Sharpe, 2013. "Can the Canada-U.S. ICT Investment Gap be a Measurement Issue?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 26, pages 63-85, Fall.
    • Handle: RePEc:sls:ipmsls:v:26:y:2013:4
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    File URL: http://www.csls.ca/ipm/26/IPM-26-Rai-Sharpe.pdf
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    References listed on IDEAS

    as
    1. Andrew Sharpe, 2006. "The Relationship between ICT Investment and Productivity in the Canadian Economy: A Review of the Evidence," CSLS Research Reports 2006-05, Centre for the Study of Living Standards.
    2. Andrew Sharpe & Jean-François Arsenault, 2008. "ICT Investment and Productivity: A Provincial Perspective," CSLS Research Reports 2008-06, Centre for the Study of Living Standards.
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    Cited by:

    1. Jasmin Thomas, 2016. "New Evidence on the Canada-U.S. ICT Investment Gap, 1976-2014 Selected OECD Countries, 1986-2013," CSLS Research Reports 2016-17, Centre for the Study of Living Standards.
    2. Don Drummond & Evan Capeluck & Matthew Calver, 2015. "The Key Challenge for Canadian Public Policy: Generating Inclusive and Sustainable Economic Growth," CSLS Research Reports 2015-11, Centre for the Study of Living Standards.
    3. Jasmin Thomas, 2016. "Explaining Industry Differences in IT Investment Per Worker Between Canada and the United States, 2002-2013," CSLS Research Reports 2016-01, Centre for the Study of Living Standards.

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