Report: Canada must close its talent gap or risk falling behind in the AI race

Almost half of Canadian orgs feel their staff are not prepared to use AI.

Even as public- and private-sector organizations in Canada are turning their attention to artificial intelligence (AI), almost half feel their staff are not adequately prepared to use it, according to a new report from Deloitte Canada’s Future of Canada Centre.

The data from a survey of over 800 managers and executives at both public and private sector organizations across the country. In total, 48 percent of respondents said they feel their employees are not prepared or barely prepared to use AI, while only five percent say their workers are “very prepared.”

“What our research and experiences are telling us is that even though there are a lot of positives when it comes to the research that is happening in academia [in Canada] when it comes to AI, when you actually have to apply that in the context of industry, there is a gap,” Jas Jaaj, managing partner of AI and data at Deloitte Canada, told BetaKit. 

“The primary driver, when it comes to this gap, is boiling down to talent,” he added.

Keeping skilled talent at home

Deloitte Canada’s data indicates that a strong majority of respondents consider adapting to technological change a moderate to high priority. Yet 56 percent said they don’t yet use AI, though nearly 20 percent said they plan to adopt it in the next few years. 

Separate data released by NOVIPRO this week indicates that 40 percent of Canadian companies plan to invest in AI or advanced data analytics in the next two years, yet 20 percent do not believe that, or do not know if, AI will transform their business.

“Canada, in general, has a risk-averse culture.”

The report pointed to several obstacles impeding Canadian companies from attracting skilled AI talent. One such challenge is that nearly half of business leaders struggle to hire and retain digitally skilled workers.

Jaaj said there are two factors motivating this issue. He noted while Canada does have one of the most highly educated workforces of G7 nations, the country isn’t necessarily using investment to both provide skills training to workers and retain them in the country.

While other nations have introduced rules on inbound foreign direct investment (FDI) to protect their intellectual property (IP), the report said Canada’s policies often prioritize funding incentives for large, multinational enterprises.

Deloitte Canada’s report outlines several recommendations for addressing this problem, one of them being to “invest differently in the growth and success of Canadian startups and scale-ups,” to allow them to attract top talent. This includes experimenting with policies such as patent boxes and IP rules. Canada is currently exploring the suitability of a patent box regime through its long-awaited review of the Scientific Research and Experimental Development tax incentive program.

“Cultivating an ecosystem that nurtures the growth of AI innovation in Canada will allow organizations here to offer the type of highly sought-after positions that top AI talent is looking for,” the report added.

Upskilling demands that Canadian businesses embrace risk

Upskilling, or reskilling Canada’s existing workforce was identified as a key area where Canada could improve in bridging the AI talent gap. The report noted that in 2021, Canada ranked 25th out of 29 countries in terms of businesses offering training to develop tech skills for non-tech specialists. 

“If you’re not empowered with the right education, the knowledge, the skills, everything else goes to the wayside,” Jaaj added.

Deloitte Canada’s survey also found that only 31 percent of organizations see themselves as “highly effective” in providing professional development opportunities, and Jaaj believes this is, in part, a culture problem. 

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“We do feel there is an element of this across the board,” he noted. “Canada, in general, has a risk-averse culture.”

The report outlines several recommendations for Canadian organizations looking to upskill their teams. These included disaggregating jobs into tasks and skills; assessing the existing skills across an organization; and adopting AI-driven adaptive learning, which uses continuous assessments and algorithmic adjustments to tailor the learning process to each employee’s needs and learning speeds.

The risk of falling behind

While AI poses certain risks, and its adoption requires businesses to prepare for them, the report also emphasizes the perils should Canada fall behind in preparing its workforce for AI.

“Right now, there isn’t a country out there that is not doubling down on their AI strategy, making significant investments, and moving down the path of execution,” Jaaj added.

Canada is already facing productivity challenges. Economic productivity, which measures the gross domestic product by hours worked across the country, has been declining for years, and Canada now ranks far from the top in productivity compared to other countries in the Organisation for Economic Co-operation and Development. Some stakeholders have posited that AI, if harnessed properly, could be the answer to the country’s long standing productivity problem.

“Now is a golden opportunity for us to use our strengths in AI to double down, invest, educate, build literacy, and then close this productivity gap that we have been dealing with for many years,” Jaaj added.

Feature image courtesy of Unsplash. Photo by Jefferson Santos.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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