Blogs & Comment

Canadians aren't generating enough Internet money

A new report suggests we're bad at starting online businesses and deriving value from e-commerce.

(Photo:  Richard Drury/Getty)

Yeah, baby! Canadians are the most awesome YouTube watchers and Facebook photo uploaders in the world. Woohoo!

But deriving actual value from the Internet, as in jobs and money savings—you know, the kind of usage that actually matters—well, not so much.

That’s the conclusion reached by a new report released Monday by the Boston Consulting Group, which looked at the economic impact the internet has had on G20 countries. The Internet accounted for about $49 billion or 3% of the Canada’s gross domestic product in 2010. That ranks ninth in the G20 and below the group’s average of 4.1%.

Moreover, the Internet’s contribution to Canada’s GDP is expected to grow to 3.6% by 2016, at which point the country will be even further behind the expected average of 5.3%, sliding to 12th.

A few weeks ago, some observers celebrated the fact that Canadians are prodigious users of things like Facebook and YouTube as proof that the country is somehow on the digital vanguard. As I countered at the time, it’s one thing to consume the Internet and another to actually use it in a meaningful way.

The new survey backs that up, suggesting that Canadians just aren’t as good at starting online businesses, deriving value from e-commerce and creating Internet-related jobs.

“Our economic prosperity as a country will be increasingly tied to the ability of both government and industry to harness this enormous economic opportunity,” said BCG partner Tawfik Hammoud in a release. “Our data points to the fact that, across every sector, we could and should be doing more.”

The study was sponsored by Google, so it’s a good idea to take it with a grain of salt. Google, after all, has a vested interest in driving policies that will allow it to drum up more advertising dollars from Canadian businesses. Suggesting that things are not well here is, of course, a good way to spur such governmental action.

Still, where there’s smoke there’s usually fire. As luck would have it, a similar study from BMO Bank of Montreal, also released on Monday, found that only 29% Canadian businesses are successfully using social media. That’s a poor showing compared to the 43% of businesses in the United States who reported using it last year (the number has probably grown since then).

When taken in aggregate with other related findings by the World Economic Forum, the Canadian Advanced Technology Alliance and others, it’s hard to deny that Canada has some serious digital problems.