The Canadian App Economy is Global and Diverse — But Can Improve

The Canadian App Economy is strong both in terms of app exports and compared to its industrialized peers.

By Elliott Long, Senior Economic Policy Analyst, Progressive Policy Institute

The Canadian App Economy has 262,000 App Economy workers as of November 2018, according to a recently released report by the Progressive Policy Institute (PPI). App Economy workers are those that develop, maintain, or support mobile applications. What’s more, Canada is outperforming many of its industrialized peers.

On Monday, PPI hosted a panel discussion at the MaRS Discovery District, North America’s largest incubator, to highlight and discuss the report.

PPI Chief Economic Strategist Michael Mandel opened the event by emphasizing the significant role of app exports in Canada’s App Economy. “We know this: export-based apps are a huge potential economic strength for Canada,” said Dr. Mandel.

Dr. Mandel was joined on the panel by:

• Matthias Oschinski, Director of Innovation Economics at the MaRS Discovery District;
• Mahshid Yassaei, Co-founder and CTO, Evenset Inc.;
• Viet Vu, Economist, Brookfield Institute; and
• Deepak Chopra, CEO and Co-Founder, Clearbridge Mobile

The key, noted Dr. Mandel, is that the next stage of the information revolution will focus on “physical” industries such as agriculture, manufacturing and healthcare — industries where Canada is strong. “When we joined the market, it was already past the leading edge of technology when. Users were very comfortable with apps, finding apps, and industries were looking for ways to redefine business on apps,” said Mahshid Yassaei of Evenset, whose company has developed health care apps to more accurately shade patient’s teeth, measure the wettability of the briefs, and remind patients to take, enter, and refill prescriptions.

This digitization requires a new type of mobile apps that are the key interface between workers and digital processes. These new apps have the potential of opening up new export markets for Canada.

What does an app economy export look like? It involves users around the world, cross-border flows of data, and flows of money that may or may not be picked up by the official statistics. Indeed, our analysis found Canada is leveraging app exports to grow its App Economy. One well-known Canadian app that has spread globally is the messaging mobile app Kik, which was created in 2009 by University of Waterloo students and has 300 million users around the world today. Dr. Mandel also cited other Canadian-based apps in manufacturing, agriculture, and healthcare that had the potential to go global, generating jobs and income at home.

Internationally, Canada’s App Economy is relatively small. But, when we adjusted for total employment, Canada is doing very well compared to its industrialized peers. App intensity represents the number of App Economy jobs as a share of total employment. As shown in the below table, Canada’s app intensity of 1.4 percent ranks ahead of the United States, the United Kingdom, Germany, and Japan — and only slightly behind Korea.

While the Canadian tech workforce is highly diverse in some areas, it has room to grow in others. “Tech workers in Canada are a success story when it comes to diversity. Almost one-third belong to a visible minority group. But in other respects, only 20 percent of tech workers in Canada are women — and only 1 percent are indigenous,” Viet Vu of the Brookfield Institute pointed out.

Another area the Canadian App Economy can improve in is closing its digital skills gap. According to the Information and Communications Technology Council’s latest ICT Labor Outlook, Canada will need an additional 216,000 ICT professionals by 2021. “We’re right in the center of the Canada App Economy, looking for talent, looking for diversity, and training,” said Deepak Chopra of Clearbridge Mobile.

“The education system has a role in giving people a foundation, however employers also need to do their fair share in training their employees,” said Matthias Oschinski of the MaRS Discovery District. Policymakers should design educational and workplace programs that incorporate and lower the cost of ICT skills development to help close this shortage.

The Canadian App Economy is strong both in terms of app exports and compared to its industrialized peers. While the Canadian tech workforce is diverse in terms of minority inclusion, it is lacking in female representation. And like many other countries, Canada is facing a digital skills gap in the near future. Policymakers should create programs that encourage and make it easier for women to seek careers in the technology sector, as well as incorporate and lower the cost of ICT skills development to help close the skills gap shortage.