Responding to the Innovation Challenge An Atlantic Canadian Perspective on Achieving Excellence...

Responding to the Innovation Challenge

An Atlantic Canadian Perspective on

Achieving Excellence

August 2002

Aliant in Brief

•Leader in communications and information technology

•Focused on innovative capabilities to drive growth

•A TSX 100 company based in Atlantic Canada

•Market capitalization of approximately $4 billion

Aliant in Brief

• 3rd largest incumbent telecom in Canada

• 3rd largest Canadian-owned IT company: xwave

• Largest mobile satellite communications company in Canada: Stratos Global

• Significant role in commercially-based “R&D-type” development in Atlantic Canada: LivingLAB, Innovatia, TARA

The Aliant Family

Telecommunications6,400 employees

Information Technology2,500 employees

Remote Communications650 employees

Emerging Business900 employees

Aliant Inc.more than 10,000 employees

Aliant’s Role in Atlantic Canada

People• 9550 employees, 4,000 retirees

• Employees live and work in over 500 communities throughout Atlantic region

• Pre-eminent employer of business, engineering, computer sciences, IT, and technology program graduates

Investment• $438 million capital program 2001

• Major expansion of information technology services; broadband, high speed internet, and digital wireless networks

Atlantic Canada’s Economic Gaps

• Major economic gaps between Atlantic Canada and the rest of the country including:

– lower levels of productivity

– less investment in research and development

– lower levels of exports

– increasing elderly population

– outward migration of people

– limited in-migration especially among multi-ethnic population, who form backbone of SME market and new job creation

– limited in-migration of highly skilled foreign nationals to help in R&D

– higher levels of unemployment

Transformation to aKnowledge-based Economy

• Aim for Atlantic Canada:–shift from largely resource-dependent economy to

knowledge-intensive one

• Aliant’s aim is to help Atlantic Canadian businesses:–compete as e-businesses –enhance productivity–achieve competitive advantage

• Key ingredients which Aliant offers:–advanced telecom network–development of new technologies and applications

Aliant’s Investment in the Future

• Investing $300 million in Atlantic Canada with a network to deliver IP-based services

• Goal: broadband high-speed Internet service to 70% of households and businesses in region

• Network offers same access to technology as anybody in the world

• It’s up to us to take advantage of the opportunity

Innovation Action Plan

• Infrastructure Investment– - Broadband as the KBE highway

• Electronic Service Delivery–Government as model user

• Progressive regulatory policy and legislation

• R&D, Clusters and Commercialization

• Entrepreneuralism and Access to Capital

Infrastructure Investment

• Critical to Atlantic Canada’s economic development and quality of life

• Broader definition of “infrastructure” must include high-tech and broadband

• Key role of IT, Internet and e-business in business transformation and exports

• Aliant’s actions include:– funding high-tech facilities at universities–partnering with government on high-speed Internet

Infrastructure - Broadband

• Federal government should stimulate demand for broadband services in Atlantic Canada by:–launching pilot projects for Government Online in

Atlantic Canada

–striving for Atlantic Canada to be first and best in Canada in terms of delivery and range of online government services

–launching any new key portals or services in Atlantic Canada

Infrastructure - Broadband

• Governments should complement, not compete with, the private sector’s market-driven deployment plans

• In consultation with provincial governments in Atlantic Canada, the federal government must:–promote a provincially-driven approach to broadband

deployment in rural & remote areas–ensure access to every community via tenders to a

major provider in each province–ensure government funding does not lead to public

ownership of networks

Electronic Service Delivery

• Government should continue in the lead with electronic service delivery/ Government Online

• Encourages SMEs to go online for government services - shift to e-business

• Open, electronic tendering process drives innovation among SMEs and in the regions

• Atlantic Canada should be the test bed and launch pad for new initiatives - advantages for pilots

Progressive Regulatory Policyand Legislation

• Telecommunication regulation has a significant impact on innovation in Canada and warrants expert review

• Recent CRTC Decision on Price Cap Review endorses facilities-based competition but impedes innovation because it:

– introduces more regulation

– stifles the incentive for service innovation and new service introduction

– indicates an apparent shift away from a market-based pricing regime (in contrast to reducing contribution, for example)

– creates a CRTC-managed Deferral Account via transfers of telcos revenues - potential for uneconomic investments

Progressive Regulatory Policyand Legislation

• Tax treatment of e-commerce–make Canada a preferred location for electronic commerce

with specific, clear and easy-to-implement rules; do not wait for international rules

• Immigration policy:–need to address limited in-migration of highly skilled

foreign nationals to support R&D in Atlantic Canada

• Intellectual property:–government and universities need the same IP rules

R&D, Clusters and Commercialization

• Incubators:–offer real-time experimentation - e.g. Telecom Applications

Research Alliance (TARA) in Halifax

• Clusters:–must build on nascent expertise, pool of skilled talent and

collaborative spirit among players

• Commercialization of R&D:–speedier commercialization requires common intellectual

property policies across universities in the region–focus on commercialization and specialization (not re-inventing

the wheels)

Entrepreneuralism &Access to Capital

• Challenges in attracting investment, especially in start-ups, and financing growth and expansion

• Federal government should introduce measures to:• further encourage business transformation and adoption of e-business • improve access to venture capital in Canada, especially as committed

by Canadian pension funds

• ensure corporate income tax rates offer a competitive advantage as compared to the U.S.

What Atlantic Canada Needs Now

• Inter-provincial co-operation and standardization is imperative (across the four provinces)

• Atlantic Canada should be an incubator and testing ground for government initiatives

• Focus on key centres in the region to build up competitive capacity

• Accelerate the agenda; the region cannot afford to keep lagging behind

Focus on Key Issues

• Infrastructure - Broadband– traditional and high-tech/ broadband are the bedrock of

community economic and social development

• Electronic Service Delivery–make e-business and e-government part of everyday life

• Regulatory Reform–ensure telecom regulation encourages innovation

• R&D and Commercialization– learn from successes such as incubators; address

potential bottlenecks to commercialization

Aliant and the Government’s Innovation Strategy

• We support the government’s strategy

• In Atlantic Canada, we are seen as KBE leader

• We are committed to working with government and other leading firms in Atlantic Canada especially on:– increasing the number of firms that benefit from the commercial

application of knowledge, particularly among SMEs– attracting and retaining highly qualified people– ensuring Canada’s telecom regulatory regime is world-class– participating in a private-sector solution to deploying broadband in

rural and remote areas

What’s at Stake

• Atlantic Canada continues to lag in many key economic indicators

• Oil and gas developments will spur economic growth in coming years -- but the region must rely less on resources over longer term

• Migration trends must be reversed to avoid labour shortages and stem the “brain drain”

• Opportunity is here to focus on knowledge and innovation as path to future prosperity

Responding to the Innovation Challenge An Atlantic Canadian Perspective on Achieving Excellence...

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