Canadian Manufacturing

Deloitte: Canadian businesses woefully unprepared for pending technology wave

A new study says advances in disruptive technology like robotics and artificial intelligence will bury companies that are not ready to use them



TORONTO—Consulting firm Deloitte says it’s latest study shows most Canadian companies aren’t prepared for major advances in technology like robotics and artificial intelligence.

Deloitte says only 13 per cent of the 700 companies in its study scored well, while 87 per cent were partially or completely unprepared for the magnitude and speed of change that’s on the horizon.

The report, which also outlines steps companies and governments should take to improve their outlook, begins with a chilling caveat: “We feared that Canada’s businesses were ill-prepared for the disruption challenges to come. Unfortunately, we were right.”

Indeed, more than one-third of the companies scored poorly on each of four key measures, which include:

Awareness: understanding changing technologies, the accelerating pace of change, and the potential for technology-driven disruption in the firm’s industry and business environment.

Organizational culture: the extent to which a firm promotes, encourages and provides incentives for innovative behaviours and practices.

Organizational agility: the ability to rapidly redeploy systems, assets and people to address external opportunities or threats.

Effective resources: the technology, human capital and financial assets that firms can use to enable change.

Study co-author Terry Stuart says the findings are consistent with other Deloitte research on Canadian companies.

He says companies in Canada are generally adverse to risk and that shows up as a reluctance to invest the time and money needed to understand the next wave of technology.

Deloitte predicts the economy is about to be changed by new technology like industrial robots, 3D printers and sensor devices that are connected by networks and monitored by computing systems with artificial intelligence.

But the preparedness of Canadian companies to integrate these technologies falls woefully short.

  • 23% of firms were found to be to be “single-minded,” taking action in one area but were poorly prepared overall
  • 29% of firms were deemed “tentative,” organizations that aren’t wholly unprepared but are struggling in their efforts
  • 5% of firms—more than one in three—were “wholly unprepared” and struggling across all four areas of the study

All is not lost, However. Deloitte has some recommendations for companies to kick-start their tech policies.

The advisory says Canadian companies can take the following steps to dramatically improve their capacity to anticipate, respond to and capitalize on the disruptive forces heading our way.

Cultivate awareness: Fostering awareness of the forces that have the potential to disrupt a business or industry better positions a firm to take action today to prepare for disruption’s impact tomorrow.

Build the right culture for preparedness: Developing a resilient, innovative organizational culture can help companies withstand disruption in the future, and it also offers important benefits today.

Foster organizational agility: Embracing new ways of working and making decisions can help firms avoid becoming mired in the bureaucracy that can bring change to a screeching halt.

Develop effective resources: Investing in advanced technologies and using resources effectively can increase companies’ resilience in the face of change. Acquiring and deploying the best people, technology and financial resources can help firms become more competitive as they prepare for future disruption.

And government’s aren’t off the hook. While Deloitte acknowledges it’s difficult for governments and academic institutions to directly influence the actions taken by Canadian businesses, both can take steps to support the private sector:

Evolve education at all levels.
Governments must use their funding and regulatory levers to encourage a shift in how Canada’s students are educated at the elementary, secondary and postsecondary levels, embracing new education practices, models and partnerships.

Alter protectionist regulations in Canada’s visa regime.
The government must review its visa processes to ensure our companies can compete with their worldwide peers for the best global talent. Improving the speed and efficiency of the application process is a start, but governments must also resist the tendency to establish protectionist policies that make it more difficult to work in Canada than in many other countries.

Redesign post-secondary institutions into vibrant, diverse learning zones.
Canada’s post-secondary education system was built at a time when only a small proportion of people attended university. At that time, highly specialized learning, housed in silos and based on static curricula, proved a successful format for producing successful students. However, the past 50 years have seen unparalleled change, and our education system must adapt.

Invest strategically in building true business ecosystems.
Governments must work to deepen the impact of existing clusters of businesses and help them transform into full-fledged ecosystems that support and promote business. While having a cluster in every major Canadian city is an excellent goal, what’s needed now is a transition from clusters to world-class business ecosystems.

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