By Jared Lindzon* – June 2023
Canada’s largest industries, including financial services and energy, will also be those most disrupted by artificial intelligence, putting pressure on the country’s traditionally conservative businesses to become early adopters, according to a new report.
The global report by consulting firm Accenture says generative artificial intelligence – the latest iteration of AI tools that are capable of creating original works, such as ChatGPT and DALL-E – will forever change how we work. That disruption, however, will be most pronounced in the banking, insurance and capital markets sectors followed by the energy industry.
According to data from IBIS World, those sectors are Canada’s largest by revenue.
While Canada’s business community has taken a more conservative approach to technological adoption in the past, experts predict the situation will be different for AI adoption given the economic importance of these sectors.
“Almost three fourths of the hundreds of Canadian executives that we surveyed said they will be investing more in this space,” said Krish Banerjee, the managing director of data, analytics and applied intelligence at Accenture. “Almost 97 per cent say AI is a priority for their business, so there is optimism and opportunity, and there is prioritization and attention.”
The report suggests strong interest by Canadian firms in those most affected industries, namely financial services and energy, to explore the technology and its potential benefits, and Mr. Banerjee says employees will soon see those changes incorporated into their work.
Investing in technological adoption at this relatively early stage of development is somewhat out of character for Canadian businesses. According to the Conference Board of Canada’s latest Innovation Report Card, which was last published in June of 2021, the country scored a C in its economy’s overall innovation, and ranked 11th among the 16 countries analyzed.
“We score well on basic research, the beginning of the funnel around innovation, like spending from the government for example, and at the university level,” said Michael Burt, a vice-president at The Conference Board of Canada. “Where we start to slip is around commercialization and adoption of technology.”
Mr. Burt, however, said there’s reason to believe this time will be different. “I’m not sure I’d bet on us being a laggard on this one, because it’s going to impact some of our major industries, and we’ve already got some of the building blocks here in Canada; we’re not starting from the beginning,” he said.
That sentiment is echoed by Dr. Stephen Thomas, a professor of management analytics at the Smith School of Business at Queen’s University in Kingston, who also sees Canadian businesses in those most affected sectors moving uncharacteristically fast to adopt AI.
“Canada was known, especially in the banking industry, to be conservative, risk averse, but for a few different reasons AI seems to be an exception,” he said. “It certainly does seem to be the case that there’s a willingness to move faster on this, as opposed to waiting 10 years and seeing how it goes for the [United] States or Europe.”
Dr. Thomas explains that unresolved ethical, legal and practical challenges have prevented most from adopting generative AI tools on a broad scale, but adds that many Canadian companies have begun investing, experimenting and watching the field closely.
“They’re still very much in the experimental test phase,” he said. “There are a few major obstacles; one is that the whole ethics issue is not solved. They can say random things on random topics, you can basically trick them into supporting any cause you want, for good or evil, and based on the training data they’ve been given they’ve been partial to white males or Western society in general.”
Though widespread adoption is still contingent on solving those challenges, Dr. Thomas speculates that it’s more a matter of when than if. He added that the pandemic expedited the adoption of digital technologies in the banking, insurance and energy sectors, adding those efforts could prove vital in an Ai-enabled future. As organizations move more of their operations into the digital space, he said there is more opportunity for AI to optimize processes ranging from customer service to oil and gas pipeline maintenance. He added that federal spending on AI research has also given Canadian businesses a leg up compared to previous waves of innovation.
“Canada is a smaller country, but a big player in the AI world,” he said. For example, the federal government has invested heavily in AI research, many of the country’s universities are engaged in that research, and the so-called “godfathers of AI” who pioneered the technology all hail from Canada. The country also benefits from lots of capital and support for AI startups and a strong presence of some of the world’s largest tech firms, said Dr. Thomas. “Because of that, I think the banks, the insurers, the energy companies will be able to move fast and take advantage of these [AI tools and applications] quickly and realize the gains in terms of productivity, reduced costs, more satisfied customers in the end, all of which will fuel growth.”
At the same time Dr. Thomas said workers in those sectors should brace for an Ai-enabled future. He argues that for most employees the technology will be a net positive, enabling them to do their jobs better and more efficiently – but only if they keep their skills relevant.
“Individuals should invest their time learning as much as they can about these AI tools; how they work under the hood, how to use them and gaining some programming literacy,” he said. “AI is not going to displace a lot of people and eliminate a lot of jobs, but employees that use AI will replace employees that do not use AI.”
I write about “the future of work,” which I have been reporting on while also working out the kinks of remote work and self employment since early 2013. That year I began writing for the Careers section of the Globe & Mail and by 2015 for Fast Company’s WorkLife section as well. I continue to share my thoughts on the space for both publications, and occasionally pitch in on related subjects, like personal finance, tech, entrepreneurship, ESG and small business.
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