Canadian Occupational Projection System (COPS)

Industrial Summary

Computer Systems Design and Related Services

NAICS 5415

This industry comprises establishments primarily engaged in providing information technologies expertise (such as writing, modifying, testing and supporting software, including the creation of Internet home pages); planning and designing computer systems that integrate hardware, software and communication technologies; providing on-site management and operation of clients' computer and data processing facilities. It excludes the development and retailing of computer hardware and packaged software. The industry employed 346,100 workers in 2016, mostly concentrated in Ontario (47%), Quebec (25%), British Columbia (13%) and Alberta (10%). The workforce is primarily composed of men (76%) and characterized by a high level of education and a significant proportion of self-employed (27%). Key occupations (4-digit NOC) include:

  • Information systems analysts and consultants (2171)
  • Computer programmers and interactive media developers (2174)
  • Computer and information system managers (0213)
  • Software engineers and designers (2173)
  • User support technicians (2282)
  • Web designers and developers (2175)
  • Computer network technicians (2281)
  • Computer engineers (2147)
  • Database analysts and data administrators (2172)
  • Information systems testing technicians (2283)

The industry strongly relies on business investment and government expenditures related to software and information and communication technologies (ICT) in Canada. It is also characterized by a relatively high degree of exposure to trade for a service industry, with about 20% of its revenues coming from exports, mainly to the United States, making it sensitive to the investment environment south of the border. Driven by the rapid pace of computer technology adoption from the private and public sectors and the constant need to upgrade their ICT infrastructure, output in this industry grew continuously since the early 1990s, even during the global recession of 2008-2009, albeit at a slower pace. Growth in production and employment was particularly strong in the past four to five years as rapid innovation has opened doors to new growth opportunities in the industry. Cloud computing, Internet of Things (IoT), big data and predictive analytics are now part of many Canadian businesses’ daily operations. The increased complexity of ICT systems and the growing use of mobile devices fuelled robust demand for computer services. On average, real GDP and employment increased at annual rates of 4.8% and 3.1% respectively over the period 2007-2016, posting the strongest growth rate in output across the 42 industries covered by COPS, and the second strongest growth rate in employment behind health care services. Productivity growth was relatively modest, primarily reflecting the rise of smaller firms and start-ups in the industry and the fact that they do not benefit from the same economies of scale as larger companies.

Over the projection period, computer system design services should continue to outperform most industries in terms of production and employment growth. Demand is expected to be supported by solid investment in software and information and communication technologies (ICT), reflecting the need for businesses and governments to continually upgrade their ICT systems in order to keep up with the most recent technologies and remain competitive. Indeed, computer services benefit from the constant development of innovative computer and communication products that are designed and serviced by the industry. Cloud-based platforms, Internet of Things (IoT), big data and open source software continue to gain in popularity, while new technologies in advanced manufacturing and autonomous transport, virtual and augmented reality, machine learning and artificial intelligence, fintech/insurtech and blockchain are creating a multitude of growth opportunities. Consumers and businesses own multiple electronic devices and are increasingly asking for compatibility, transferability and access to their content from any of those devices. The industry will also continue to benefit from the growing number of firms across the economy that choose to outsource IT work in order to remain focused on their core activities. In many areas, IT investment cannot be delayed, particularly in the area of cybersecurity where threats to private and public targets continue to emerge, warranting significant new investment by any organization that has information to safeguard. Simultaneously, the growing amount of data being made publicly available by all government levels through open data initiatives is expected to encourage the private sector to innovate and develop various applications to leverage this large pool of information, leading to the creation of new products and business models in the industry. Fintech, insurtech and blockchain technologies are also opening doors to new start-ups, representing niche opportunities within the industry to compete directly with the traditional financial, banking and insurance services. Increased competition will force the incumbent finance and insurance companies to modify their business models and upgrade their ICT infrastructure, resulting in additional demand for computer services. Finally, a positive outlook for exports, spurred by solid economic growth in the United States and improved price competitiveness due to a relatively low Canadian dollar, is expected to bring more business to Canadian computer services firms. That said, the industry also faces increased competition on the global market, particularly from developing countries which benefit from lower wages and capital costs than those in developed countries. Imports of computer services have surged in recent years, increasing by 10% annually since 2011. The resulting pace of growth in the industry’s real GDP and employment is projected to average 3.7% and 1.9% per year respectively over the period 2017-2026. Although this represents a slowdown relative to the previous decade, output and employment in computer services are expected to post the second strongest growth rates accross the 42 industries covered by COPS. Again, productivity growth is projected to be restrained by the rising number of small firms and start-ups and the fact that production in the industry is highly labour intensive.

Real GDP and Employment Growth Rates in Computer Systems Design and Related Services

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Computer Systems Design and Related Services. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Computer Systems Design and Related Services, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 4.8 3.1
2017-2026 3.7 1.9

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

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