Like the information and communication technologies (ICT) sector in every part of the world, the Canadian tech industry has gone through a dramatic boom-and-bust period over the last decade. And while economic output in that sector in Canada was flat or negative during the last few years, Statistics Canada reports today that there was still a great deal of activity in the sector, mostly in the form of new firms getting into the business.
“ICT firms continued to create new establishments at a rate that exceeded the rest of the business sector, the study shows,” Statscan said, in the study An Anatomy of Growth and Decline: High-tech Industries through the Boom and Bust Years, 1997 to 2003. “High rates of entry are indicative of a sector whose firms and their financial backers see opportunities to develop new products that, in the long run, may drive future growth.
Between 1998 and 2000, entry rates in the ICT sector were between 25 and 44 percentage points above the rest of the business sector. (An entry rate in a given year is defined as the proportion of employment in establishments that were new from the year before.)”
That said, Statscan notes that overall economic growth (the value of all goods and services produced by industries in the sector) in the tech universe in Canada declined or grew anemically between 2000 and 2003. Along with that lousy economic growth, the number of people employed by the sector also declined or grew anemically.