Impediments to Advanced Technology Adoption for Canadian Manufacturers

Using survey data, this paper investigates problems that firms in the Canadian manufacturing sector face in their decision to adopt advanced technology. The data show that while the use of advanced technology is relatively important (users account for over 80% of all shipments), it is not widespread among firms (users represent only about one-third of all establishments). One explanation lies in the fact that while advanced technologies provide a wide range of benefits, firms also face a series of problems that impede them from adopting advanced technology. These impediments fall into five groups: cost-related, institution-related, labour-related, organization-related, and information-related.

While it might be expected that impediments would be higher for non-users than users of technologies, the opposite occurs. We posit that the reason for this is that innovation involves a learning process. Innovators and technology users face problems that they have to solve and the more innovative firms have greater problems. We test this by examining the factors that are related to whether a firm reports that it faced impediments. Our multivariate analysis reveals that impediments are reported more frequently among technology users than non-users; and more frequently among innovating firms than non-innovating ones. We conclude that the information on impediments in technology and other related surveys (innovation) should not be interpreted as impenetrable barriers that prevent technology adoption. Rather, these surveys indicate areas where successful firms face and solve problems.