Canada seeks India's partnership in IT sector

By R. Gopalakrishnan

CHENNAI, NOV. 4. World leadership in telecommunications, a highly developed information technology (IT) sector, low business costs and barrier-free access to the U.S. (besides Mexico) market under the North American Free Trade Agreement (NAFTA) make Canada a promising partner in the IT sector for Indian professionals and firms, according to officials of the Canadian High Commission.

Software firms in Canada earn 73 per cent of their revenue and IT services firms 20 per cent from exports. Vertical niche orientation, particularly in the case of small and medium enterprises (SMEs), in the IT sector, and strategic alliances to enhance the businesses' competitive position mark the IT scenario in Canada, where Infosys and Tata Consultancy Services have set up software development centres, the officials said.

Making presentations on "Canada's Information and Communications Technology (ICT)" sector at a meeting organised by the Canadian High Commission here last week, the officials also emphasised that the perceived high income tax rate in Canada vis-v-vis the U.S. was a misconception, considering that in Canada, unlike in the U.S., social security costs of individuals, education costs including at the university level and health care costs were borne by the state and assessees were free from expenditure on these heads. On an overall basis, the tax element in Canada was lower than in the U.S., while, according to a KPMG study in 1999, advanced software firms located in Canada enjoyed a 14.5 per cent cost advantage over similar firms located in the U.S.

Thanks to its continental dimensions and long distances separating population centres, Canada had been the birthplace of innovations like telephone, satellite, fibre optics and public radio stations which accounted for its leadership in telecommunications and wireless technology.

This also helped boost Canadian leadership in GIS (geographical information systems) and geomatics in the IT sector and rural public and school access to telecommunications and the Internet, the presentation emphasised.

Canada's own world class companies in the IT sector included GEAC Computer Corporation, Cognos, Hummingbird Communications and the CGI Group Inc, a consultancy. Among foreign companies, IBM Canada with one of the IBM's biggest software laboratories with global mandate for many products and employing 17,600 people, EDS Canada and DMR Consulting had Canadian operations. Canadian IT sector did not concentrate on back office operations but focussed on specialised areas like graphics and special effects (accounting for 80 per cent of the world's animation and special effects software), e-commerce network applications, business intelligence, customer relations management and supply chain management and industry-specific software like telecommunications, petroleum and healthcare/telemedicine.

Besides better known centres like Toronto, Montreal and Ottawa, locations of specialised IT firms included clusters like Edmonton-Calgary, Winnipeg, Saskatoon, Kitchener-Waterloo, Vancouver and the Atlantic regions.

Canadian companies such as Nortel, Teleglobe, Eicon, Entrust, Alcatel Canada, Isopia, WiLan and Psion Teklogix Systems had built up marketing and distributor arrangements in India. "But we also encourage Indian companies to come to Canada to see first hand the scope of expertise and the many small-to-medium-sized firms - including many Indo-Canadians active in the IT sector - working in niche areas which may match well with Indian interests", the officials said.

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Section  : Business
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