No one disputes the fact that there is skills shortage. The question is how big it is, and who has the biggest problem. CATAAlliance looks at the problem from the perspective of the high tech industry.
The Canadian Advanced Technology Alliance is a trade association which represents the Canadian high tech industry. We have 600 members, and a further 1500 companies belong to associations which are affiliated with CATAAlliance. Most of the companies are in the information and communications technology industries, but we also have members from the aerospace, biotech and advanced manufacturing industries. While the very largest companies, like Nortel, JDS Uniphase, Bombardier, Cognos and BCE Emergis are members, the vast majority are SME's. Similarly, while foreign multinationals like IBM, Cisco, Ericsson and Alcatel belong, most of the members are Canadian companies. The markets in which our members compete are global, not local, so almost every one of them exports. Product innovation is the critical factor in global success, so only a few members do not perform R&D.
It is not a secret that the new economy, the knowledge-based economy, the high tech economy, is where future economic prosperity for Canada will be found. Everyone knows that the only really important raw material of the new economy is human resources, people and their talents. The other raw material is money, but you can get that if you have the right people. ( It will be harder this year than last, but a good deal can always find financing.)
Last summer, the government reported that there were 50,000 vacant jobs in the high tech industry. The number is at least that high today, despite the slowdown in growth. The problem is aggravated by the fact that it is not confined to Canada, it is global. The shortage of information technology workers in the United States is estimated at 1.2 million. The gap between supply and demand is the same, 1.2 million, in Europe. Even India, which was famous for its strong supply of quality software developers, is now suffering shortages in the fastest growing specialties.
There are three sources of skills, the current work force, immigration, and Canadian schools. CATAAlliance's members have told us that personal income taxes are their number one government issue, because taxes are a critical matter for both their present employees and potential immigrants. For several years we have pressed the government hard to reduce income taxes to competitive levels, which will both reduce the brain drain and attract high tech immigrants. We finally succeeded with the October mini-budget, which took a major step in that direction. Business must continue to push for further reductions, however, because the target keeps shifting. President Bush is introducing legislation to reduce U.S. taxes by $1.6 trillion. That will put us back at a major disadvantage.
The source of greatest concern now is the Canadian education system. A study just released by Ipsos-Reid, in partnership with CATAAlliance, reports that a majority of Canadians recommend that high tech leaders put education first on their list of priority issues. Based on online interviews with over 1,000 Internet users, the issues of tax reform (46%), environmental impact of new industries (40%), and social accountability of businesses (39%) were all topped by education at 56%.
Education is by no means a new issue for CATAAlliance. In 1998 the association launched its "Double the Pipeline" initiative, urging governments to work with the industry and educational institutions to double enrolment in computer science and electrical engineering. Ontario responded immediately with its $223 million Access to Opportunities Program. Alberta launched a program like it that year, and Quebec has also established a similar initiative in partnership with industry. CATAAlliance and a group of partners are now preparing to launch "Double the BC Pipeline" to extend the program to the west coast.
Technological skills are not the only need. When Industry Canada first became interested in the software industry in 1987, it assumed that the industry's biggest problem was a lack of programmers. Software execs said that while it certainly was hard to find enough good ones, the real problem was finding sales and marketing people. When I put this question to the CEO's who serve on the CATAAlliance board today, I get the same answer, "Marketers are harder to find than engineers."
This explains the reaction from the high tech industry last year when Premier Harris made disparaging remarks about liberal arts education, and directed most of the SuperBuild Fund money to expanding high tech education while starving liberal arts. Twenty-seven of Canada's leading high tech executives immediately leapt to the defence of the liberal arts, issuing a statement pointing out that both disciplines are equally important in the digital economy.
The high tech industry is not the only one which suffers from a lack of educated employees. The problem is pervasive. The baby boomers are approaching retirement. Replacing them presents an enormous problem in many professions and skilled trades. Nurses, doctors, school teachers, university professors and many other professionals will be in short supply over the next five to ten years. There are already shortages of carpenters, masons and machinists. Steps must be taken now to expand enrolment in apprenticeships programs, colleges and universities to meet the need.
The federal government has committed funds to expanding university education through programs like the Canadian Foundation for Innovation and the 21st Century Research Chairs. Some of the provinces have committed to expanding education. Ontario has announced that it will spend $1.8 billion to create 73,000 new student spaces in colleges and universities by 2003. Other provinces need to follow this example, to meet the needs of their people.
The Canadian-Italian Business and Professional Association has established a scholarship fund to assist students to achieve their education goals. Everything possible must be done to help young people improve their skills. Your businesses can also create opportunities by opening your doors to coop students. Coop programs offer students real world experience and money to pay for their education. They offer business access to bright, creative young people, and an chance to recruit them for long-term employment.
Does education pay? It pays in many ways, but two are of critical importance. Its impact on jobs is enormous. In the 1990-1999 period, employment for Canadians with a post-secondary education rose 2.26 million. For those with only a high school education it rose a mere 139,000. It actually fell, by 947,000, for those who failed to finish high school. The situation is the same today. Layoffs in the high tech in Ottawa have received a lot of publicity lately. It was unskilled contract factory workers who were let go. The companies which announced the layoffs continue to recruit engineers and programmers wherever they can find them.
The educated also earn much more. According to the 1996 census, those with university degrees had an average employment income of $42,000. People with high school diplomas made only $22,000, and those who didn't get that far earned slightly less than $20,000. This split has almost certainly widened since.
It is clear that spending on education has a huge payoff, for people and governments. Everyone must continue to press governments to make the investments in education which are essential to boosting Canada's competitive stature in the new economy. Anything which your association can contribute to education will be both welcome and well rewarded
David Paterson, Executive Director, CATAAlliance
phone: (613) 236-6550