Paradigm

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For the exclusive use of Glen Hodgson, hodgson@conferenceboard.ca, The Conference Board of Canada. Canada’s New Trade and Technology <strong>Paradigm</strong> Finding the Right Policy Mix Executive Summary Canada faces a dramatically changed global economic and business context. The economy is now characterized by weak growth in Canada, a rebound in the United States, and more moderate yet still strong growth in emerging markets. At the same time, the global operating environment for business has been dominated by accelerating flows of data, people, services, and investment. The ability to digitize information and send data anywhere gives any individual or small business the potential to trade globally. The flipside is that competition has intensified. Digitization has also created new types of trade in digital products and services, and led to dramatic growth in traded services and Canada’s global sales of services as a result. Digitization is also permeating traditional trade in manufactures. In future, manufacturing and engineering companies will really be data companies with huge amounts of customer behaviour and logistics data. Those that can best leverage the acceleration of global data flows will be in the best position to take full advantage of global markets in the future. More disruptions are on their way, and Canada will need to position itself to leverage the benefits of new technological developments while mitigating any negative impacts. Potentially disruptive technologies include automated vehicles, intelligent software, cloud computing, Internet of Things sensors, and advanced robotics. Climate change and related climate policies are another factor that could affect Canada’s trade and supply chains. In addition to environmental impacts, climate change and anticipated policy changes present both risks and opportunities for Canadian businesses. Find Conference Board research at www.e-library.ca. 2
© The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. The Conference Board of Canada Future trade deals will need to go further to better advance and promote innovation. This dramatically changed global context raises new challenges for Canadian policy-makers. Canada will no longer be able to rely on high commodity prices driving Canadian exports and wealth. Canada’s future trade gains will not look the same as in the recent past, and we will need a new strategy to fully seize these gains. Strictly focusing on eliminating tariffs for Canada’s exports will be insufficient to position Canada effectively for this future. A foundational priority must be to develop ways to better measure and track changes in these newer types of trade. A focus on the U.S. and China will be critical to advancing Canada’s trade interests. Policy-makers will need to complete deals already in progress that start to address newer types of trade, and future deals will need to go further to better advance and promote innovation. Policies will need to place much more emphasis on the freer movement of data, people, services, and investment. Domestic policies need to invest in much-needed infrastructure, as well as the next generation of broadband and technological infrastructure. Policies should lay the foundation for all businesses to become tech companies and position themselves to leverage a data-driven future. Introduction The global economy has undergone rapid and dramatic changes in recent decades, which are poised to accelerate, raising new possibilities and challenges for Canadians and policy-makers. This briefing examines these changes and the forces behind them, and considers the policy response that would best position Canadian firms and the entire economy to take advantage of the opportunities presented. The Global Economic and Trade Context The commodity price supercycle, high-valued Canadian dollar, and booming growth in emerging market demand defined Canada’s global economic context in recent years. That context has now changed. Find Conference Board research at www.e-library.ca. 3
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Paradigm

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