THE “OTHER” DIGITAL DIVIDETHE “OTHER” DIGITAL DIVIDETHE “OTHER” DIGITAL DIVIDETHE “OTHER” DIGITAL DIVIDE

Presented by Beverley Mahony Industry Canada

OECD Digital Divide Workshop

December 7, 2000

500+ employees(0.2%)

<5 employees (78.4%)

50-499 employees(2.4%)

20-49 employees(4.0%)

5-19 employees (15.0%)

Total of 941,144 Businesses with paid employees

Source: Statistics Canada, Employment Dynamics (1998)

SMEs Play a Major Role in the Economy SMEs Play a Major Role in the Economy

1

15

Number of Employees

Percentage of Firms Using the Internet

SME Internet Use by Size of Business1997 to 1999

28.3

38.1

51.154.9

65.9

37.642.5

54.0

68.372.7

82.6

52.155.2

66.2

78.883.9

91.3

65.1

5–19 20–49 50–99 100–499 Total

1997 4th Quarter1998 4th Quarter1999 4th Quarter

Source: Canadian Federation of Independent Business, Our Members’ Opinions survey, #41 (July to December 1997), #43 (July to December 1998) and #45 (July to December 1999).

0–4

Excellent Growth in SME Internet Use Excellent Growth in SME Internet Use

2

32.8

60.663.7 63.0

40.5

65.9

89.1

52.8

95.4

5.7

27.631.7

26.1

16.0

27.2

61.7

21.7

69.2

0

10

20

30

40

50

60

70

80

90

100

Forestry,Logging &SupportActivities

Mining & Oil &Gas Extraction

Manufacturing WholesaleTrade

Retail Trade Finance &Insurance

ICTs Total for PrivateSector

Total for PublicSector

Percent

Using the InternetWeb Site

Source: Statistics Canada, Information and Communications Technologies and Electronic Commerce Survey, August 2000.

Canadian Businesses at E-Readiness Stage Canadian Businesses at E-Readiness Stage

Overall Internet connectivity is good but early days for e-commerce

3

Government

Business

Trade

Why Is It Important To Be On-line? Why Is It Important To Be On-line?

Transforming all areas of lifeTransforming all areas of life

Education

4

E-Com Radically Changes Traditional Supply ChainE-Com Radically Changes Traditional Supply Chain

Customer Distribution Marketing Manufacturing Suppliers

Customer

Distribution Marketing

Manufacturing

Suppliers

SMEs Need to Keep Pace to SurviveSMEs Need to Keep Pace to Survive 5

“Other” Kinds of Digital Divides: Location Gap: Being left behind because of where

located, e.g. small towns and rural areas Speed gap: Between large businesses with high-

speed access versus small and medium-sized firms with low speed access

Timing Gap: Individuals and businesses in rural and remote communities will be disadvantaged with expensive access, late access or no access

Evolving Concepts of Digital Divide Evolving Concepts of Digital Divide

“The high-speed, broadband networks of the 21st century are essential to attracting and retaining businesses,

providing state-of-the-art healthcare, and offering children the benefits of distance learning and the

Internet.”Center for the New West, September 1999

6

Businesses Gap growing between large businesses (on high-speed

on-ramps) and small and mid-sized firms (on electronic dirt roads), particularly in small towns & rural areas

Public Institutions High-speed critical to providing ALL government services

online: telehealth, e-learning, electronic government transactions, etc.

Households As volume increases, speed decreases using current

legacy infrastructure Utility of digital platform for commercial, social, civic and

learning activities will be greatly impaired or eliminated

Canada Established National Broadband Task Force Canada Established National Broadband Task Force

Limited Bandwidth = Lost OpportunitiesLimited Bandwidth = Lost Opportunities

7

Supportive policy & regulatory framework

Raising awareness /education on benefits

Leading by example / model user

Stimulating development of ICT and advanced

applications

Mobilizing resources, in partnership with private

sector, where required to address market failure

Benchmarking domestic performance and

sharing best practices

Government Roles in Fostering Access & Use Government Roles in Fostering Access & Use

8

1. Accelerate adoption and use among SMEs

2. New Business Models

3. High-Speed Broadband Access

Issues /Challenges Ahead Issues /Challenges Ahead

9