3, January 2024
Does Canada have enough STEM and IT talent?
Having a skilled workforce is widely regarded as a key to economic growth and productivity. This is becoming increasingly important with the rise of the knowledge economy and technologies such as artificial intelligence and synthetic biology. How is Canada doing?
According to the OECD, Canada has the highest proportion of the 25-64 age group with a college or university credential in the G7, at 57.5%. The proportion having a university degree has also been rising quite steeply.
However not all groups in Canada are doing so well. In 2021 just more than 50% of First Nations people, Métis and Inuit had completed high school. This is an untapped resource.
While university and college enrollment has been going up in Canada, enrollment in the US – our major trading partner – has been declining. This is an ominous sign for Canada as it might increase the brain drain as US firms seek skilled people elsewhere.
Undergraduate enrollment US colleges and universities
No one seems to have a definitive answer as to why enrolment in the US is declining, but student debt is mentioned frequently. There is still a substantial salary benefit to getting more education in the US. (Ref 1).
STEM (Science, Technology Engineering and Mathematics)
In a period when technology and digitalization is becoming more important, STEM skills will be critical for ensuring economic growth and productivity. It is encouraging to see that the number of STEM students has been rising much faster than students in other subjects.
However, there is a serious gender imbalance. According to Statistics Canada, women make up less than 25% of people employed in STEM careers. This is similar to the US but far less than Europe where women make up 43% of the STEM workforce. This situation is slowly improving. 8.3% of male high school graduates completed a bachelor’s degree STEM program, compared with 6.5% of their female counterparts. This gender gap of 1.9 percentage points represents a difference of 22.2%.
The Next Generation.
Students currently in high school will be entering the workforce in the not too distant future. How skilled are they likely to be? One source of information is the PISA, the Programme for International Student Assessment, carried out by the OECD every three years. This tests 15-year-olds in mathematics, reading and science. Canada’s PISA scores have been declining since 2000, as have those of almost every other country, as shown in the graphic below.
The reasons for the worldwide decline don’t seem to be well understood. One anecdotal reason might be the decline in standardized testing, which is being replaced by teacher assigned marks. A report from the Fraser Institute confirms the decline in standardized testing in Canada (Ref 3). Singapore, the highest rated country in the PISA results, has a highly competitive education system, as does China and other Asian countries that rate well. There is widespread use of private tutors. (Ref. 5)
A headline in the Globe and Mail says it all “Demand for tech skills is soaring. Firms must offer reskilling programs to close the gap.” (Ref 4.) Businesses are struggling to find and retain skilled talent with cloud computing specialists (41 per cent), those with an artificial intelligence/machine learning background (27 per cent), and security architects (25 per cent) being the most in-demand tech employees. Other skills shortages include IT technicians (24 per cent), data analysis (24 per cent), data protection (24 per cent), and security analysts (24 per cent).
The federal government is also struggling to hire people with digital skills to upgrade its old information systems.
Future Demand for STEM skills.
A report from the C.D. Howe Institute (Ref 2) paints a picture of a shortage of digital and STEM skills in the future. They point to rapid digitalization across the economy and an aging population as reasons for the shortage. They propose a number of approaches to improve the situation, including:
- investing in the reskilling and upskilling of the workforce.
- adapting the immigration system to increase the attraction and retention of immigrants with STEM and digital skills.
There is a significant STEM skills shortage in Canada, and this threatens Canada’s future prosperity.
To improve this situation Canada needs to encourage more students – particularly women – to take up STEM and IT careers, invest in reskilling and upskilling the workforce, and increase the attraction and retention of immigrants with STEM and IT skills. More attention also needs to be given to improving the education of First Nations people, Métis and Inuit who are currently considerably underrepresented.
The decline in university enrollment in the US is a threat to Canada as it will increase the pressure for the brain drain of skilled people from Canada.
The decline in PISA scores in Canada is also concerning and more effort should be put into identifying and correcting the reasons for the decline.
Ref 1. Salary benefit of more education. https://research.collegeboard.org/media/pdf/education-pays-2023-presentation.pdf
Ref 4. Globe and Mail July 12, 2023, Andrew Eppich. https://www.theglobeandmail.com/business/careers/leadership/article-reskilling-programs-tech-skills-demand/