Knowledge-intensive services industries are intensive users of high technology and/or have a highly skilled labour force necessary to use and exploit technological innovations. To identify knowledge-intensive services, the OECD analyzed each industry’s use of technology (based on input-output tables), each industry’s R&D intensity, and the workforce skills of each industry. Based on this analysis, the OECD defines three services industries as “knowledge-intensive”: post and telecommunications, finance and insurance, and business activities.
Canada gets a "C" grade on its share of knowledge-intensive services in GDP and ranks 10th out of 17 countries. It is important to look also at Canada’s ranking on the complementary indicator—the share of GDP generated by high- and medium-high-technology manufacturing. Switzerland is an “A” performer on both indicators. The U.S., the U.K., and Australia are strong on knowledge-intensive services but relatively weak on high-technology manufacturing, while the opposite is true for Germany. Canada's middle-of-the-pack ranking reflects its lack of specialization in either high-technology services or manufacturing.
Canada’s strength in post and telecommunications keep its grade from slipping down to a "D." Advanced business services, including marketing, logistics, and management consulting, are not areas of relative Canadian strength. Canada’s ranking on use of knowledge-intensive services drops even lower when business services are compared alone. Canada ranks last on business services.
Despite this, services are a large part of the Canadian economy—indeed, they have been, relative to other countries, throughout Canada’s history. Canada’s traditionally sparse settlement formed the foundations of some of the country’s best-known services, including transportation, project engineering, commodity shipment, civil aviation, remote sensing, and geomatics.
Yes. Between 1979 and 2005, Canada experienced a steady increase in the importance of knowledge-intensive services. Knowledge-intensive services now account for 17.7 per cent of GDP, up from 11.2 per cent in 1980. Knowledge-intensive services increased in importance in all peer countries.
Use the pull-down menu to compare the growth in Canada’s share of value added by knowledge-intensive services in GDP with that of its peers.
Canada’s market has become more open to limited competition within the financial and telecom sectors, and from private delivery services in the postal sector. Further economic integration with the U.S. has also enhanced the uptake of new technologies and applications in Canada by simultaneously increasing market size and competition.