It would be an understatement to say that the world was a tough year. However, Canada’s innovation economy provided a silver lining to the black clouds that dominated 2020.
Faced with a pandemic and the worst economic conditions seen in a generation, the people and young companies that underlie the country’s technology sector managed very well and even prospered. The number of Canadian unicorn companies continues to grow. Eleven of us have manufactured Global Cleantech 100. The domestic biotechnology sector has been the best year of funding ever. There are always challenges, but this resilience is a good sign for the future of Canada’s economy after 2021.
To prepare for this future, DMZ, a tech startup accelerator at Ryerson University, has joined a coalition of innovation hubs, institutions, entrepreneurs, investors and business partners to shed light on key questions and trends. The result is a series of data-driven reports on the key issues facing the Canadian technology ecosystem.
For me, what stood out in these reports was the resilience of our ecosystem. Here are five key findings from the 2020 Canadian Technology Innovation Economy Council report:
Tech jobs are still growing
Despite the terrible economic sacrifice of pandemics throughout the economy, there are nearly 100,000 more jobs in the STEM field (science, technology, engineering, mathematics) than before COVID-19.
The rest of the economy has lost more than 400,000 jobs, leaving a big hole in Canada’s job market. But STEM workers, including many of our best and brightest, are not.
The employer soon turned to working from home, raised new capital, seized new opportunities … and continued to hire. This includes technology companies and start-ups involved in software development, artificial intelligence, clean technology, and digital distribution of products and services.
Technology growth outperforms other sectors
The technology sector is better than any other economy because it provides solutions to some of society’s biggest challenges, such as discovering new healthcare, slowing climate change, fighting cyber threats, and facilitating digital transformation. It creates a lot of jobs.
Companies involved in computer system design have added about 90,000 jobs since 2009. This is three times the overall automotive manufacturing and automotive parts sector. In Ontario, the fast-growing software industry’s GDP is growing six times faster than the economy as a whole.
The manufacturing business is on an evolutionary ladder
The false impression that Canadian manufacturing is dying is not. Technology is saving factories by allowing less skilled workers to produce more. As a result, advanced manufacturing clutches are contributing to factory job creation and a large share of economic growth.
These manufacturers are classified as advanced because they spend more on research and development and employ more highly skilled workers. In Ontario, advanced manufacturing has created half of the jobs in more than 45,000 factories created since 2010. And these workers earn 50% more than the national average.
Canada retains its unique position in talent racing
Believing that things have to be better somewhere else, especially the United States, is part of Canada’s spirit. People are sometimes under the false assumption that colleges are better, or have more opportunities to work there. So talented people leave.
However, that traditional brain drain has been significantly reversed, based on an IEC survey of the flow of people inside and outside the country. Talents flow in both directions, but data suggest that Canada is gaining more STEM talent than it is losing.
Thousands of Canadians continue to pursue careers and education in the United States, despite years of immigration rhetoric and stricter visa rules. According to an IEC survey, more than 10,000 Canadians traveled south in 2019 with US green cards and H-1B visas. This is a popular appetizer for skilled technicians. However, continuing the pattern of recent years, Canada has also attracted approximately 23,000 STEM workers from other countries through permanent residence and temporary foreign worker visas.
There are also signs that tens of thousands of the approximately 3 million Canadian expatriates living abroad returned home when the pandemic broke out. It helps fill Canada’s talent pool.
Students are adopting STEM
Young Canadians are receiving the message that their work outlook is better in the new economy. Canada’s registration in the STEM field is growing faster than all other post-secondary education programs.
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More than one in three high school students attending college choose the STEM program. Between 2014 and 2018, STEM enrollment increased by 16.4% and enrollment in mathematics and computer science increased by nearly 50%.
The labor force share of the knowledge sector was steadily rising before the pandemic. STEM and related science and technology work accounted for 34% of the workforce in 2018, up from 28% in 2000. And that trend has been going on for the past year.
All of this, albeit a good ride to the pain and suffering of 2020, is the cause of hope and optimism for Canada’s rapidly growing technology sector.
Five reasons for optimism from Canada’s resilient tech sector
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