Skilled Labor Shortage Called Canada's Biggest Challenge

By O'Brien, Larry | Canadian Speeches, October 1997 | Go to article overview

Skilled Labor Shortage Called Canada's Biggest Challenge


O'Brien, Larry, Canadian Speeches


This afternoon I will be addressing the problem that many of us working in the new economy believe to be the next major challenge Canada must face in order to ensure long-term prosperity for our nation and jobs for our youth.

I want to talk about the shortage of skilled labor to fuel the growth of our economy.

I want to talk about a shortage that, according to Harris Miller, head of the Information Technology Association of America (ITAA), is nothing short of critical and is the economic equivalent of running out of iron ore during the start of the second industrial revolution.

I also want to suggest some action items for the prime minister of our country while he contemplates [former New Bruswick Premier] Frank McKenna's call for vision and leadership of our economy.

Canada, along with much of the world, is facing a huge shortage of skilled labor. We have a very real and a very significant problem.

I am reminded of the story about the army major who was briefing a group of captains on turning tactical problems into opportunities. The theme of the lecture was that in almost every tactical situation, no matter how bad, there was in fact a real opportunity to win -- if one thought through the options and acted boldly.

The lecture went well, and several weeks later during some war games he received the following radio message from one of the men who sat in on the lecture. "Sir, my situation looks bad, I am out of munitions and I am badly outnumbered. In fact, sir, I am surrounded by an insurmountable opportunity."

The "opportunity" our nation faces today is our skills shortage and this in turn relates to unemployment issues for our youth.

I am talking to you today as a member of the Prime Minister's Advisory Council on Science and Technology, where I am chair of the Human Resources sub-committee. I am also chair of a Sector Advisory Group on International Trade, focusing on Information Technology and Telecommunications; and past chair of the Canadian Advanced Technology Association.

I would like to give you some overview information to put the problem into perspective.

In 1995, the IT&T industry generated $73 billion in financial activity and employed approximately 400,000 people of whom 300,000 were direct technical staff. This represented about 3% of the estimated $1.9 trillion world market for IT&T in 1995.

Over the past five years this industry has grown globally at about 11.4% per year. Not a bad growth curve, but let's look ahead and do some forecasting, and see where we may or may not be in the year 2010. Who says economists have all the fun?

Assuming 10% annual growth, by 2010 the world market for IT&T will grow from $1.9 trillion Canadian to more than $10 trillion. And if we also assume that market share at the sector level is the clearest of competitive indicators, and we maintain our 3% share, then Canada would have, by definition, a $300 billion IT&T industry by the year 2010.

Now here is where it gets interesting. By 2010 this industry has the potential to employ about 1.5 million knowledge workers. That's 1.5 million people paying taxes, buying homes and cars, and feeding our economy. And that's only the jobs directly related to the industry.

According to the latest economic profile done by OCEDCO, the NCR's 41,000 high tech workers create approximately 95,000 indirect jobs. That is at least two indirect jobs created for every knowledge worker employed. Now we have a potential--and I stress potential -- to create a total of 4.5 million jobs by the year 2010.

And these jobs are for everyone, but most importantly they are for our youth. The youth of our country that have the agile minds and thirst for knowledge that makes them the ideal candidates to fill the demand for skilled workers. This sounds good, but here's where we have a problem.

We are currently adding only between 20,000 and 25,000 knowledge workers to our employment roles per year--and that's from all three possible sources of human capital: education, training and re-training; and immigration. …

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