Volume 44 Issue S1, November 2018, pp. Siii-Six

This article provides a conceptual framework for discussing information and communication technology (ICT) skills shortages in a context in which having a sufficient supply of skilled ICT workers—both inside the ICT sector and more broadly—is critical to the performance of the Canadian economy. We start with an outline of a simple model of how ICT skills shortages might be manifested in labour market signals, such as rising wages, and then how, in response to these signals, workers already in the labour market should adjust, whereas young people making schooling and career decisions would be expected to skew toward ICT areas. We then discuss some of the reasons these dynamics might not follow this model, and therefore how ICT skill shortages could potentially endure over time. The article sets the stage for the other articles in this special issue, which address these and other issues related to ICT skills from a mix of traditional academic and industry perspectives.

Les auteurs proposent un cadre conceptuel d’analyse des pénuries de compétences en technologies de l’information et de la communication (TIC), dans le contexte où l’accès à un bassin suffisant de travailleurs qualifiés dans ce domaine — tant dans le secteur même des TIC que plus généralement — est indispensable à la performance de l’économie canadienne. Les auteurs établissent d’abord un modèle simple décrivant les indicateurs de pénuries de compétences en TIC pouvant être observés sur le marché du travail, comme la hausse des salaires. Ils expliquent ensuite comment l’observation de ces indicateurs devrait inciter les travailleurs déjà présents sur le marché du travail à s’adapter et, censément, amener par ailleurs les jeunes appelés à faire des choix d’études et de carrière à opter pour les TIC. Les auteurs traitent ensuite de certaines des raisons pour lesquelles cette dynamique pourrait s’écarter du modèle proposé, les pénuries de compétences en TIC risquant ainsi de persister dans le temps. L’étude ouvre la voie aux autres articles du présent numéro spécial consacré à cette question et à plusieurs autres sujets liés aux compétences en TIC, dans la perspective traditionnelle du milieu universitaire conjuguée à celle de l’industrie.

The digital economy is a driving force of the Canadian economy (as in other advanced economies), and it relies on having a sufficient supply of workers with strong information and communication technology (ICT) skills. Canada’s Information and Communication Technology Council (ICTC) regularly publishes forecasts regarding the number of workers with ICT skills that will be required down the road. Although these forecasts are sometimes greeted with skepticism, there is little doubt that employment in this sector has increased in recent years and is likely to continue to do so.

The skills sets that those in non-technology sectors are expected to need are also increasingly technology based. ICT skills are categorized by the OECD (2017) as (a) specialist or advanced, (b) generic, and (c) complementary. Those with specialist skills (e.g., computer programmers or website developers) produce ICT products and service those products. Workers with generic ICT skills use ICT products and technologies in their jobs (e.g., accountants who use spreadsheets and occupation-specific software). Finally, in the context of ICT-rich workplaces, complementary skills permit workers to improve their productivity in the execution of a variety of tasks (e.g., warehouse workers interacting with computerized inventory systems).

Being able to adapt to and use these technologies—even at a rudimentary level—is today as important as reading, writing, and arithmetic were to previous generations. Although we recognize this spectrum of ICT skills, most (although not all) of the focus of this special issue is on the specialist or advanced category.

In a context in which it is often claimed that Canada faces a shortage of specialist ICT talent, one key issue for those seeking to understand and evaluate these assertions is how to identify ICT skills shortages. According to standard economic models, a signal of any such shortage would be expected to be provided through increased wages and other indications of excess demand for ICT workers in ICT industries or occupations.

Subsequent to any such signal of shortages, individuals who already have ICT skills and have the ability to further develop those skills, or who otherwise have the opportunity to adapt would, in a well-functioning market, be expected to move into the specialist ICT occupations and sectors where the skill shortages exist if the jobs were sufficiently attractive. The post-secondary education (PSE) choices of younger people making schooling and career decisions would also be expected to skew toward ICT disciplines and other kinds of schooling opportunities that would allow them to move into ICT jobs, and ICT sectors, where demand is strong. On the supply side of this skills development dynamic, colleges and universities would be expected to make ICT-related training spaces available by, for example, expanding programs in electrical engineering, computer science, related areas of math and statistics, and other relevant areas of study.

Of course, ICT training, especially in a PSE context, normally takes an appreciable amount of time (i.e., the time for students to complete their studies and obtain a formal credential), which results in a lag from the time market signals are sent (e.g., increases in wages that should occur when ICT skills are in excess demand) to when these skills are available to the market.

If, however, the market signals are not responded to in the ways just described (i.e., students’ choices or institutions’ related responses in adjusting their program offerings), then the needed skills may not be developed. One reason for this lack of response in the development of ICT skills in PSE is that the market signals may not actually exist, or they may be weak or not evident to students (a labour market information problem). Also, students may not respond to those signals in the expected way for a range of other reasons (e.g., the costs of moving into ICT areas of study might be quite high; the domestic ICT employment package—wages, hours, location, etc.—may not be appealing relative to other opportunities; women may feel that they will be discriminated against in relevant classrooms or workplaces; or students may be concerned about the prospect of another dot-com bust). If one reason for the lack of responsiveness to the labour market signal involves not having the appropriate preparation in secondary school, then this would result in further lags or enduring impediments related to entering ICT programs in PSE.

What is deemed to be an insufficient increase in the training of ICT workers is one reason for calls to better prepare students for ICT by, for example, improving the teaching of math starting as early as primary school. Similarly, we observe strong pushes to get female students interested in ICT-related areas of study early on, especially because women are so underrepresented in ICT areas of study in PSE (as they are in ICT occupations). This female underrepresentation is particularly problematic in a context in which women make up the clear majority of university students and thus represent a potentially rich pool of ICT talent going forward.

On the supply side of PSE, institutions are not necessarily responsive to labour market signals and face their own constraints and incentives to adjusting the number of spaces available. A particular issue is that some ICT-focused programs, such as those in engineering, can be expensive to operate, and some provincial government funding models do not provide adequate support or incentives for such programs relative to, say, lower cost programs in the humanities and social sciences.

A further PSE challenge is to adapt the specific skill mix that students are expected to develop over the course of their PSE studies to reflect the skills being sought as the ICT world evolves—including soft skills such as being able to work in a multidisciplinary team setting, strong communications skills, and so on. ICT workers need—and their skill development should involve—much more than coding.

Stepping away from the domestic supply of ICT skills, immigration can also play an important role in meeting the demand for ICT skills. Although immigrants have historically been an important source of labour in the Canadian economy, the ability of immigrants to provide the right type of labour—including ICT skills—is an increasingly important issue. The relevance of foreign training in Canada, domestic recognition of foreign credentials, language barriers, and other issues mean that immigrants may not be able to seamlessly integrate into the Canadian labour market and help ease skills shortages, but the role immigration plays in providing workers with advanced ICT remains important.

The labour market in general, and the ICT labour market in particular, is extremely complex, and breaking any link in the skills development chain as described here can result in acute or chronic skills shortages (or surpluses—recall the dot-com bust of the early 2000s). Adding to the complexity of ICT skills issues is that high-skilled ICT wages and product prices tend to be set in international markets, and highly skilled workers are internationally mobile. This limits the scope for both domestic skills and immigration policy, and it also constrains domestic ICT firms.

For policy-makers to make informed decisions and, potentially, implement effective policies, an understanding of these and perhaps other issues is required. On the specialist ICT side, key issues include, first, the state of the specialist ICT labour market and whether a skills shortage actually exists—and if a shortage exists, whether it represents either the unwillingness or the inability of firms to offer better compensation or a situation in which demand is outstripping supply because of, for example, pre-labour market educational and training constraints. A second related issue is whether students are responding to any market signals of specialist ICT skills shortages and entering ICT areas of study in the numbers required to eliminate any shortage. More broadly, for specialist as well as generic and complementary ICT skills, additional issues include (a) whether Canada’s universities and colleges (as well as employers) are providing the appropriate training and adapting this training to the rapid changes in technology and the ICT needs of the Canadian economy and (b) the role immigration plays in terms of ICT skills and skills gaps.

From a mix of traditional academic and industry perspectives, the papers in this special issue address ICT and related questions in relation to the Canadian labour market and education systems. They focus primarily on shortages of specialist ICT skills and, to a lesser degree, the development generic and complementary ICT skills.

The 13 articles that follow are thematically organized into four sections. The articles in the first section assess the current state of the Canadian specialist ICT labour market and how individuals have responded to the changing market conditions in the ICT sector. Those in the second section address the development of ICT skills in PSE, including student choices and institutional responses. The articles in the third section discuss the roles of women and immigrants in providing ICT talent to the Canadian economy. The final section provides a set of institutional–industry perspectives on current and future ICT talent issues.

ICT Labour Market: Evidence of ICT Talent Shortages and Responses

Labour shortages in ICT (or any other sector) are almost certainly accompanied by changes in wages and other forms of compensation, as well as longer hours worked and other adjustments at the margin. In the longer term, wages are first expected to rise, attracting individuals into this sector, and then stabilize as the supply of labour increases to meet the excess demand.

A first instinct of labour economists is to therefore look for evidence of these kind of changes in the data. Thomson, Veall, and Sweetman (2018) do just that. They use Labour Force Survey data from 1987 to 2016 to document the trends in employment, hours worked, weekly earnings, and job tenure for 15 ICT occupations listed in the 2011 National Occupation Classification and compare these with those for all non-ICT occupations in the Canadian labour market over the same period. (Separately, they also examine ICT industries.) Although growth in the number of ICT occupations workers has outpaced that of non-ICT workers, this alone is inconclusive evidence because the growth reflects supply adjustments as well as increasing demand. Shortages are normally accompanied by rising real wages, but the Labour Force Survey data show that real earnings in ICT did not increase appreciably over the past decade and that these increases observed were similar to those in non-ICT occupations. Also, actual hours worked and overtime hours do not differ between ICT and non-ICT occupations, at least in more recent years, unlike during the dot-com boom of the mid-1990s to early 2000s, when ICT workers tended to work comparatively more hours. Similarly, average job tenure and seniority—another indicator of a labour shortage—declined in the mid-1990s in ICT occupations but has since increased back to pre-tech boom levels and is trending similar to non-ICT occupations.

Part of the reason that there is little evidence of labour shortages in specialist ICT could be the result of the increase in the proportion of immigrants holding ICT positions. Although this phenomenon may alleviate shortages—as indeed the data presented imply—the result could be a damping effect on earnings, which would normally tend to entice entry into domestic ICT PSE programs and ultimately ICT occupations.

Trends in ICT earnings and corresponding trends in the number of ICT graduates are expanded on by Finnie, Pavlic, and Childs (2018), who track the labour market earnings of university graduates with bachelor’s degrees in ICT programs (mainly from selected engineering, computer science, and math programs) on a year-by-year basis after graduation. They do so using a unique dataset that links information on students from the University of Ottawa to tax records held at Statistics Canada. They track the earnings of each individual cohort of graduates from 1998 through 2010, thus covering the dot-com boom and subsequent bust in 2001.

By comparing ICT graduates with engineers in non-ICT fields as well as all other university graduates, Finnie et al. find that the relative earnings of ICT graduates were considerably higher than the earnings of others graduates (including those in other engineering fields) during the dot-com boom years. However, ICT graduates’ earnings fell dramatically after the dot-com bust, after which they partially recovered and then remained relatively stable at a level similar to the earnings of engineers in non-ICT fields. Likely in response to these changes in earnings levels and reflecting the time lag between program entry and graduation, the number of graduates in ICT programs first rose from 1998 through 2005 and then fell steeply through 2010. That enrollments increased while earnings in ICT fields were high and decreased when earnings declined suggests that young people do respond to earnings signals in the labour market when choosing their field of study, and that universities accommodate these changes to at least some degree. The pattern also illustrates, however, the challenges of matching new flows of ICT talent into the labour market to match current conditions—and the related current demand for ICT talent—precisely because of the lag between entering an ICT program and graduation.

Role of Post-Secondary Education: Student Choices and Institutional Responses

Being employed in ICT occupations implies that one has the appropriate education. Ding and Lehrer (2018) ask the simple—but highly relevant—question, “Why do so few women take PSE programs in engineering and computer science?” These authors provide Organisation for Economic Co-operation and Development (OECD) data to show that Canada is behind the OECD average in producing graduates in these two fields. At the same time, women’s enrollments in other formerly male-dominated fields have risen dramatically such that women outnumber men by (sometimes) wide margins. This contribution assesses the existing experimental and behavioural economics literature on how people choose fields of study. Ding and Lehrer argue that the times at which individuals make career choices must be understood for appropriate policy to be implemented and that policies aimed at students at the secondary level of schooling may offer higher returns than those aimed at those in PSE, even though the effects of these policies will take longer to manifest. Policies can be implemented to increase students in ICT fields of study, but policy-makers are advised to fully understand the complex processes of schooling and career choices as well as the trade-offs involved in implementing various policies.

In related work, Finnie and Childs (2018) directly address the factors related to access to PSE in science, technology, engineering, and mathematics, also known as the STEM fields and certainly related to many ICT occupations. Using the Youth in Transition Survey, Cohort A (YITS–A), they follow Canadians who were aged 15 years in 1999 through the period in which PSE decisions are normally made. They find that young women enter these STEM fields at a much lower rate than young men, whereas visible minorities—especially those who are first-generation immigrants—participate at much higher rates, with many of these immigrants originating from Asian countries. Thus, consistent with the conclusions of Thomson et al., these results suggest that immigrants are an important source of ICT talent, in this case across generations.

Although attracting talented young Canadians into ICT-related PSE fields is obviously important, the knowledge taught, retained, and applied by graduates is equally as important. Frank et al. (2018) discuss the mounting pressure on post-secondary institutions to provide students—especially those in professional programs such as ICT—with the skills necessary to the modern workforce. Although this seems obvious in theory, in practice it requires identifying necessary competencies (in this case, ICT), developing and teaching these competencies, and then measuring and evaluating the outcomes. Frank et al.’s article focuses on the continuous improvement model for curriculum design and delivery guided by international evidence, using examples from the engineering and ICT literature and the Faculty of Engineering and Applied Science at Queen’s University. Essentially, this model is a feedback loop in which competencies are established by professional societies, accreditation bodies and educational institutions; appropriate curriculums are designed by a collaborative team to teach these competencies with expectations communicated to students; and data on outcomes are collected and analyzed, and competencies and programs are adjusted accordingly.

Tapping Alternative Sources of Information and Communication Technology Talent: The Role of Women and Immigrants

In this volume, Thomson et al. document the increase in those employed in ICT occupations; however, this increase has not been evenly divided between the genders, with men outnumbering women in ICT occupations by about three to one. Related to this, Finnie and Childs and Ding and Lehrer both discuss the relative dearth of women in ICT. Consequently, any talk of increasing the number of ICT workers inevitably includes a discussion of the causes for the underrepresentation of women.

One offensive explanation—famously brought to the attention of the public by a (now) former Google engineer in August 2017—is that women may simply lack the ability of their male colleagues, resulting in an unequal representation of the genders in ICT occupations. Mueller, Truong, and Smoke (2018) define this “right stuff” as basic ICT scores as measured by Statistics Canada’s 2012 Survey of Adult Skills, a special survey which is part of the better-known OECD Programme for the International Assessment of Adult Competencies. After controlling for a number of covariates, the authors find that women outperform men on basic ICT skills. But even women with scores comparable to those of their male counterparts are less likely to be employed in ICT occupations. Wages also tend to be lower for women than for men in ICT occupations, but no relatively lower than in other occupations. Thus, neither lack of ability nor lower relative earnings appear to be the cause of women’s low representation in ICT. Other reasons ranging from a lack of interest in pursuing ICT careers to outright hostility toward women in the workplace should be further investigated and appropriate policies implemented if this largely untapped pool of talent is to be employed in ICT.

Can skills shortages (if they exist) in ICT be filled by immigrants? More generically, how skilled are those in various immigration classes in terms of ICT skills? And do immigrants receive similar economic returns for ICT skills as do Canadians by birth? These are the questions asked by Truong and Sweetman (2018). Although immigration is sometimes posited as a solution to labour shortages in Canada, including in ICT, immigrants often face problems with having the relevant skills recognized in Canada and being employed in their intended occupations, including occupations in ICT. Also, the specific skills that immigrants bring to Canada may differ from those of individuals who are Canadian educated, owing to different educational and professional norms in their source countries.

Using the direct measure of problem-solving skills in a technology-rich environment from Statistics Canada’s 2012 Survey of Adult Skills, Truong and Sweetman compare immigrant skills with those of people born in Canada and also address how these skills translate into labour market success as measured by earnings. They find that adult immigrants are, on average, less proficient in these basic ICT skills than those born in Canada. Even those who enter as points-based immigrants, who have among the highest measured skills among all immigrant classes, have lower average scores. In contrast, immigrants who arrive in Canada at a young age have ICT skills comparable to those of people born in Canada. Interestingly, the authors find—for both immigrants and Canadians at birth—an earnings premium to increasing ICT skills at all measured levels, but the premium is especially large at the bottom of the spectrum. The shift from no, or very minimal, ICT skills to a quite modest skill level is associated with an appreciable earnings increment. However, for each sex, the rates of return to the measured ICT skills are not statistically different across immigrant and Canadian-by-birth groups. The authors note that ICT skills development on landing, along with language training, may benefit adult immigrants.

Picot and Hou (2018) look at trends in the education–occupation match and earnings outcomes of immigrants and the Canadian-born educated in the STEM fields. Using census data from between 1985 and 2010, both of these measures deteriorated among immigrant STEM graduates while remaining fairly constant for their Canadian-born counterparts. Most of the decline among immigrants was for those who had arrived since 2000, a period that coincided with the dot-com bust. The decline in relative earnings among STEM immigrants is similar to that experienced by non-STEM immigrants, and the earnings gap between immigrant and Canadian-born STEM immigrants did not close quickly when controlling for the number of years in Canada.

Although relative employment and wage rates are two common metrics used to address the integration of ethnic and immigrant groups into the Canadian economy, they are not the only measures of economic output. Blit, Skuterud, and Zhang (2018) use patenting rates between 1986 and 2011 as an alternative measure of immigrant economic performance. Using inventor names to identify ethnicity and the census and National Household Survey to estimate ethnic population sizes, the authors find higher patenting rates for ethnic minorities, particularly those with Korean, Japanese, and Chinese ancestry. Immigrants accounted for about one-third of patents over this period despite having a population share of less than one-quarter. The share of the relevant group with a PhD and the shares educated and employed in the STEM fields account for most of this ethnic minority advantage, with immigrants educated abroad having a higher probability of holding a patent than immigrants educated in Canada.

This latter result is interesting, and largely unexpected, because immigrants with a non-Canadian education tend to perform relatively poorly in the Canadian labour market in terms of the traditional labour market measures of wages and employment rates. This contribution is at odds with the other articles in this volume (and elsewhere) that point to disappointing conclusions regarding the labour market performance of immigrants in technology, especially recent immigrants. This evidence does, however, suggest that alternative measures are important to examine. This is certainly worthy of future research.

Sectoral Perspectives: Preparing Information and Communication Technology Talent for the Future

That ICT industries should have the appropriate quantity and quality of labour resources is obvious, but that those industries also use these resources efficiently is as important. The final set of articles address how the Canadian ICT sector itself might best respond to the rapidly changing international technology landscape from various non-academic perspectives.

Deley and Mindel (2018) note that the workplace is indeed changing rapidly and argue that the traditional top-down model of project management in large enterprises—in which the engineer’s role is to ensure that the “thing is built right” and the designer’s role is to “build the right thing” may be antiquated. This plan–drive model succeeds (or fails) on the ability to properly define what is right in both contexts. Today this traditional model may not be as nimble as is necessary to compete in a rapidly changing business environment in which speed is of paramount importance. Other, more agile approaches are aimed at reducing the time to market and letting consumers define what right means. The relevant question then becomes, “Who is best suited to know what right means?” Those at the top of the corporate top-down model or those interacting with the technology? The ICT skills needed to address this question require a balance between speed and judgement.

Walker, Bowkett, and Duchaine (2018) discuss how to prepare Canadians with the skills necessary to function in the future digital economy. As the distinction between tech and traditional spheres in the economy narrows, there will be increased demand for talented individuals who are able to navigate the digital world. This does not mean, though, that Canada will only need a workforce made up of skilled coders. To the contrary, the workforce will need a balanced set of skills to fill both non-technical and technical occupations and occupations requiring combined skill sets. Not all Canadians will need to have specialized ICT or broader technical skills, but increasing numbers will need to be technologically literate and be able to understand, adopt and work with the new technologies.

Walker et al. also discuss work-integrated learning—a catch-all term for cooperative education, apprenticeships, internships, and so forth—as a way to both supplement and complement traditional PSE by bridging the gap between what is taught in the classroom and the skills required by employers. This type of learning is gaining ground in Canada, but it is a long-term project, and continued and expanded engagement by government, business, and post-secondary institutions is required to prepare individuals with the technological literacy and interpersonal skills to allow them—and the Canadian economy—to succeed in the future.

Turner (2018) offers an industry perspective on building new ICT-based companies. Similar to the supplemental and complementary training for PSE graduates discussed earlier, the Alacrity Program selects recent bachelor’s-level technology graduates to build a new company. New graduates are often very technically competent but usually lack the business experience necessary to turn ideas into marketable goods and services. Normally, growing these start-ups created by “garage technopreneurs” necessitates the hiring of individuals with the appropriate financial, marketing, and sales skills to complement the technical skills of the companies’ founders. The Alacrity Program follows a company-builder model in which these technically talented recent graduates are teamed with experienced management who then collectively focus on bringing new technological solutions to market before the competition. This program is really a series of programs that operate internationally, each of which works with local academic institutions, investors, and government partners to tailor the new business to the unique market and legal environments in which the companies operate, while sharing information and expertise between other international Alacrity project teams.

Another industry perspective is offered by Anani (2018), who addresses the future of labour in ICT by discussing the implications of the growth of new technologies (in ICT and beyond) as they continue to disrupt the economy, including the labour market. Anani argues that the rise of the sharing, gig, and crowd economies is resulting in jobs becoming more customized and on-demand and rendering the past norm of nine-to-five stable lifelong jobs obsolete. Moreover, the increased popularity of working remotely means that traditional physical work environments are also becoming passé. In this new world of work, educational and training institutions must also change to respond to this new reality so that Canada is able to build a skilled workforce that is able to compete in the global economy. Individuals too will be required to adapt to rapid changes in technology and the workforce, implying that traditional long-term education will be supplemented with work-integrated learning and short-term training.

It is our hope that the articles in this special issue enrich our understanding of the ICT labour market and related issues of ICT skills development among those in academia, industry, and policy circles and that future research will be conducted to further inform stakeholders and assist them in making the proper decisions to ensure that the Canadian ICT sector has the appropriate skills to remain competitive in this important, rapidly changing, and global marketplace.

Acknowledgements

This special issue of Canadian Public Policy/Analyse de politiques has its roots in a workshop held in March 2013 hosted by the Education Policy Research Initiative (https://www.epri.ca/, a national research organization based at the University of Ottawa and organized in collaboration with and supported by Industry Canada. Additional funding was provided by the Social Sciences and Humanities Research Council through a Connections Grant, Human Resources and Skills Development Canada, Statistics Canada, and the Department of Foreign Affairs and International Trade.

This Information and Communications Technology (ICT) Talent Workshop brought together academics, ICT industry representatives, policy-makers, senior officials from PSE institutions, PSE representative bodies, Statistics Canada, and other stakeholders to address skill or talent challenges facing the Canadian ICT sector—a sector that is widely understood to be critical to Canada’s economic performance.

Some of the articles included in this issue have their origins in the workshop, and others were added subsequently. They address a range of ICT skills and related labour market issues from a mix of perspectives, reflecting the diversity of the workshop participants, and they thus include a combination of traditional academic and industry perspectives.

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