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Business & Finance Jun 10, 2019 11:20 AM EST

The false dichotomy: old economy vs. new economy

There is no “old economy” or “new economy.” There is just the economy and it is constantly evolving based on new technologies, discoveries, and innovation.

The false dichotomy: old economy vs. new economy
Trevin Stratton Montreal, QC

This article was published more than 1 year ago, information might not be up to date.

There is no “old economy” or “new economy.” There is just the economy and it is constantly evolving based on new technologies, discoveries, and innovation.

Tech is not a sector, it is the application of scientific knowledge that, for practical purposes, is transforming all sectors. It is a horizontal that cuts across sector verticals. Artificial intelligence, for instance, will be ubiquitous, changing everything from telecommunications to health care to natural resources.

It is a mistake to assume that economic changes are leading to a shift from the legacy sectors that have historically driven growth in Canada – energy, mining, forestry, agriculture, and manufacturing – to new emerging sectors like quantum computing and big data. We need to recognize and capitalize on the incredible innovations taking place in the very sectors in which Canada has traditionally been competitive. Failing to do so will be a huge missed opportunity.

Canada’s economic strategy should leverage our top talent and high education levels to apply the power of technology regardless of sector. This should include leading the remarkable technological advances taking place in our legacy industries. The advanced manufacturing, oceans, and proteins superclusters are a good start, but there is much more work to be done.

Take precision agriculture for example. This established and enduring industry is leveraging new technologies to do everything from increasing crop yields to decreasing environmental risks and the footprint of farming. Drones and satellite imagery are being used to track nitrogen and moisture levels to determine varying conditions across a single field. Big data is being used on the farm to provide predictive planting advice, as well as providing real-time updates on air and soil conditions during the crop cycle. Applying more precise amounts of water, fertilizer, and pesticides not only improves productivity and maximizes yields, but is also a cornerstone of sustainable agriculture.

Or, for another example, take a look at the remarkable changes taking place in Canada’s mining and energy sectors. 3D visualization and imaging are being used to locate deposits far beneath the Earth’s surface and review safety alerts. Autonomous e-vehicles are making smart mining a reality, lowering emissions and costs while boosting productivity. And advanced sensor technology is enabling real-time monitoring of temperature, pressure and flow in pipelines and wells to automatically print replacement parts using 3D printers and deliver them to the site using delivery drones. Through these technologies, scientific discoveries like carbon scrubbing, and new financial models like cleantech funds, our natural resources industries are driving the innovation that will help us transition to a lower-carbon economy.

Canadian policy makers should approach the false dichotomy between a ‘new economy’ and an ‘old economy’ with reservations. Our legacy sectors will have an expanding role in the digital economy after the federal government’s recent Budget announcement to connect all of Canada to high-speed internet by 2030. Realizing the full potential of smart cities and towns will involve harnessing the power of 5G and the Internet of Things to connect—and collect data on—our natural environment. This is a growth area where Canada can be a global player and that can have significant positive impacts on our rural economies.

Geography has been one of our greatest economic advantages throughout Canadian history. Canada should strategically invest in applying new technologies to the areas where we have continuously been competitive to ensure we remain at the forefront of invention in our legacy sectors. We would be foolish to let this advantage fritter away by failing to recognize the opportunities for innovation sitting right under our noses.

Trevin Stratton is the Chief Economist at Canadian Chamber of Commerce.

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