Measuring digital intensity in the Canadian economy / by Huju Liu and Julien McDonald-Guimond. : CS36-28-0001/2021-2-3E-PDF

"The objective of this paper is to develop a composite index to characterize the intensity of digitalization in Canadian industries. Because of the ubiquitous presence of digitalization and businesses’ and individuals’ increasing reliance on digital products and services, it is important to measure digitalization to better understand its impact on the Canadian economy. This paper first adopts multidimensional metrics to measure the extent to which firms use digital inputs to produce goods and services, using data on information and communications technology (ICT) capital, the use of intermediate ICT goods and services, the digital workforce, and robot adoption. A composite index is then constructed from these multidimensional metrics through a principal component analysis. The final index shows that digital intensity in production improved continuously from 2000 to 2015 in the Canadian economy. While almost all industries have become more digitally intensive over time, digitalization tends to be uneven across Canadian industries. The information services; telecommunications; professional, scientific and technical services; and machinery, computer, electronic product and transportation equipment manufacturing industries are among the leaders in digital intensity. Their intensities were high at the beginning of the sample period and increased significantly over time. Conversely, agriculture, mining, construction, and most manufacturing and transportation industries are among the least digitally intensive sectors, starting out low and increasing slightly over time"--Abstract, page 1.

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