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New Evidence on the Canada-U.S. ICT Investment Gap, 1976-2014 Selected OECD Countries, 1986-2013

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  • Jasmin Thomas

Abstract

Productivity growth results in part from investment in information and communications technologies (ICT). To better understand Canada’s poor productivity growth relative to the United States since 2000, this report provides a detailed examination of ICT investment trends in the two countries. The report finds that real ICT investment in the total economy in Canada has yet to recover from the 2008-2009 recession, while it has not suffered the same fate south of the border. Between 2008 and 2014 real ICT investment in Canada fell 1.0 per cent per year, compared to a 2.9 per cent per year increase in the United States. The gap was even greater for real ICT investment per job, down 1.8 per cent per year in Canada versus a 2.8 per cent annual increase in the United States. The weaker ICT investment growth in Canada resulted in a large increase in the Canada-US ICT investment gap from 31.6 percentage points to 43.7 points, as nominal ICT investment per job fell from 68.4 per cent of the US level in 2008, the highest value ever achieved, to 56.3 per cent in 2014.

Suggested Citation

  • 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.
    • Handle: RePEc:sls:resrep:1617
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    File URL: http://www.csls.ca/reports/csls2016-17.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Andrew Sharpe, 2014. "What Explains the Canada-U.S. Software Investment Intensity Gap?," CSLS Research Reports 2014-04, Centre for the Study of Living Standards.
    3. Nadim Ahmad & Paul Schreyer, 2016. "Are GDP and Productivity Up to the Challenges of the Digital Economy?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 30, pages 4-27, Spring.
    4. 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.
    5. Andrew Sharpe & Vikram Rai, 2013. "Can the Canada-U.S. ICT Gap be a Measurement Issue?," CSLS Research Reports 2013-03, Centre for the Study of Living Standards.
    6. 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.
    7. Jasmin Thomas, 2015. "An Analysis of the Canada-U.S. ICT Investment Gap: An Update to 2013," CSLS Research Reports 2015-01, Centre for the Study of Living Standards.
    8. 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.
    9. Andrew Sharpe, 2005. "What Explains the Canada-US ICT Investment Gap?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 11, pages 21-38, Fall.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Investment; Information and Communication Technology; Information Technology; ICT; IT; Productivity; Industries; Professional Services; Cultural Industries; Canada; U.S.;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L70 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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