The Data-Driven Economy: Implications for Canada’s Economic Strategy

Abstract

Canada has good prospects in the data-driven economy and has an opportunity to capitalize on its assets by substantially expanding public sector investment. Prosperity in the knowledge-based and data-driven economy will be based on ownership of rent-generating assets. Data and data-driven IP retention policies are needed. Inward technology-seeking foreign direct investment (FDI) should be viewed through a different policy lens than traditional inward investment in the industrial sectors. A data governance regime is required to create competitive market conditions under technological conditions that drive the emergence of superstar firms and “winner take most” economics. Canada will need to develop its regime in the context of free trade agreement commitments to the free flow of data and data localization prohibitions.

Keywords: data-driven economy, knowledge-based economy, small open economy, Canada, economic policy

JEL Classification: L52, O25