Google and NIESR Team Up on Digital Economy
THUNDER BAY – Editorial – Google is a digital economic giant. Moving forward into the next economy will take a combination of entrepreneurship, government encouragement, and the realization that the economy is taking new, and exciting steps forward. Cities, provinces, countries and states are going to all be competing to be a part of that growth. In Northwestern Ontario, and across Northern Canada there are tremendous opportunities in the coming years. Not only are their vast mineral resources, but there are also vast human resources. Google in Great Britain is pointing the way forward to the new digital economic opportunities.
[sws_pullquote_left]“This research demonstrates the need for a new way of understanding the economy, both for Government and for businesses. Rather than relying on outdated codes or static lists, our new technology and internet data reveals new opportunities and insights for growth.” [/sws_pullquote_left] It will however take what Hal Varian, Chief Economist, at Google, says are “Groundbreaking” efforts to move forward.
Moving into the Digital Economy Means New Opportunities
However the ground breaking is not all that traditional. It is not new mines, it is not new highways, it means moving forward into the new, and upcoming digital age.
In Britain, Google and the NIESR have teamed up. The result is a new report that Varian is excited about. “This is a groundbreaking and important report by NIESR not just because it shows that the spread of the digital economy into other sectors is driving growth and jobs throughout the UK but because – for the first time in 65 years – it presents us with a new way of measuring the economy.”
Dr. Max Nathan, senior research fellow at NIESR, states, “Policymakers have identified the digital economy as one of the UK’s key economic strengths. That means they need to be aware of the true numbers of digital businesses around the country. The old image of tech businesses as start-ups that make no money is out of date too: using big data we show a broad array of active businesses selling digital products and services.”
The Global Economy is Changing
Figuring out how to nurture growth in the new economy, while continuing to support and encourage traditional economic activity is going to be one of the greatest challenges facing nations, as well as cities. Recognition that the economy is shifting is a key to future success. Governments that recognize the coming trends are going to reap the greatest benefit, those which make other choices are going to struggle.
In our community, it could be argued that some have tried to maintain a focus on the economic giants of the past a little too long. In Great Britain, where the economy has been sluggish for a lot longer than it could the greatness of the once mighty British Empire has waned. Part of that could be related to a government which has lagged way too far behind the curve when it comes to recognizing the opportunities that the new digital economy can provide.
Internet giant Google has commissioned a report in Britain that reveals just how far traditional sectors, such as manufacturing, architecture and engineering, have embraced digital technology. The new report by the National Institute of Economic and Social Research, using new data from real-time business tracker Growth Intelligence, draws a map of jobs and growth across the whole of the UK.
The report shows:
● there are at least 270,000 companies that form the digital economy – far more than any Government estimate
● the revenue reported by digital companies is growing 25 per cent faster than that reported by non-digital companies
● on average digital employers hire three more people – 15 per cent more – than those employers who are not digital
● how companies in traditional sectors, from architecture to manufacturing, are using and relying on technology to run their businesses: digital technology is no longer the sole preserve of start-ups and software companies
● the areas with the highest concentration of digital companies are outside London and spread right across the country, in places like Aberdeen, Middlesbrough and Manchester
Post World War Two Model Not Working
What the report found was that the British Government was lagging behind. The government was continuing to use the same classification system for business created just after the Second World War.
That 65 year-old Government classification system, using what are known as SIC codes, is unable to track new innovation.
Tracking new innovation and new opportunities is critical for long-term prosperity.
The new Google supported report uses new data provided by Growth Intelligence, a fast-growing London-based sales software company, to measure the business environment by tracking digital footprints left by companies online. Official definitions only use basic sector information. Growth Intelligence classifies companies in terms of products, activities and sectors. This provides a much more detailed view of companies in the UK economy and allows us to spot digital companies working in ‘traditional’ sectors, such as software companies in architecture, publishing and engineering.
Britain’s out-dated business classification system meant that hundreds of thousands of these kinds of digital companies are incorrectly identified by Government and financial institutions. With politicians, banks and insurers basing policy decision on SIC codes, it means that thousands of firms could be missing vital support.
Economy is Stable Today?
In Canada, there has been a lot of solid growth and stability in our economy. The federal government has maintained that a stable economy is critical, and that is something that people want. However it is also a responsibility for government not to just focus on the election cycle, but to make brave and bold moves forward into the future.
[sws_pullquote_left]It will take a great deal of courage and the willingness by governments to look very long term. [/sws_pullquote_left] In Ontario, there is enormous excitement over the mining potential in Northwestern Ontario. The Ring of Fire is on everyone’s economic radar. However the brutal truth is in a generation or two the mining efforts will have exhausted the supply of chromite. The key to long term success is using the resources and the revenues to position Ontario on a solid footing for the future.
The results of today’s actions by governments may not be seen during the term of any of the current governments. However is setting a course to the future, the economic future of Canada, Ontario, and Thunder Bay will be realized.
It will take a great deal of courage and the willingness by governments to look very long term. The efforts and energies however will generate economic prosperity for the great, great grandchildren in our region.
Tom Gatten, chief executive of Growth Intelligence comments, “This research demonstrates the need for a new way of understanding the economy, both for Government and for businesses. Rather than relying on outdated codes or static lists, our new technology and internet data reveals new opportunities and insights for growth.”
Canada is a country founded on bold dreams.
Our goals in Ontario, and across Canada must be to get ahead of the curve, and be where the economy will be. That is a real challenge.
Are we up to it? The answer will likely be seen fifty to one hundred years from now, but the actions of the next five years will set that course.