Canadian Productivity Growth, Secular Stagnation, and Technological Change

In this article, we show first that the recent slowdown in productivity growth in Canada, similar to that in the United States, can be attributed at least in part to the fall-off in the commercialization of new technologies. Using our bookbased indicators of technological change, we are able to show that this is true for both aggregate measures of technology and, at the disaggregate level, for mechanical/manufacturing and electrical technologies. Our results also indicate that the productivity impact of the slowdown in Canada is much greater on goods-producing industries than it is on services. Second, our latest results suggest that, contrary to the concerns of some that we are entering a new period of secular stagnation characterized by low productivity and economic growth, we are actually on the threshold of significant new technological breakthroughs, associated largely, but not only, with advances in artificial intelligence (AI) and robotics. Provided that Canadian firms adopt these innovations, we can anticipate not a continuation of slow productivity growth but an acceleration.