TRENDS IN CANADIAN COMPUTING

CANADIAN INFORMATION PROCESSING SOCIETY

NOVEMBER, 1970

Trends are not predictions. Predictions have an inevitable sense about them while trends only indicate what will happen unless we take steps to alter the pressures causing the trends.

The trends I would like to discuss in the computing field in Canada are those brought about by institutional action rather than technological change.

BACKGROUND

First, why should we as computer professionals be concerned about what is happening at the national level?

One reason is that our industry will be the most socially influential of any in this decade. Also, there is little doubt that the computer-based industry will be the third largest industry in the world during the 1970’s with only the petroleum and automobile industries being still larger. This alone means that we have a great social responsibility to ensure that this industry is properly directed.

We, therefore, must concern ourselves with whether or not the changes proposed will be in the national or even international interest.

Secondly, however, computer professionals have a personal interest in the direction the field is taking. Each of us must satisfy ourselves that the changed environment of the 70’s will allow us to perform more effectively.

If our job is to advance the state of the art, will the proposed institutional changes allow this to happen more easily? If our job is to produce results for our companies, will this be done more easily? Will the computer professional be as free to innovate, and to establish new services? If there will be such a loss of freedom, is this significant in the light of the national interest? What is the national interest?

I contend that we cannot afford to ignore the trends in the computer industry either personally or professionally for to do so would be the equivalent of professionals in other fields developing a new nuclear device and then disclaiming any responsibility for the results. While developments in the computer field are not usually as dramatic as the above analogy would indicate, i.e. they do not usually cause loss of life, the impact of the computer on society could be every bit as great.

WHAT IS THE COMPUTER INDUSTRY?

At a recent meeting of the Ontario Government Department of Trade & Development, a group selected from the computer field tried to define the industry. A suggested definition was “that part of the information industry which is computer-based and is involved in the storage, movement and manipulation of data”.

That group went on to conclude that the industry so defined was likely already over $500,000,000 in Canada in 1969. Projections by the Federal Government, the Science Council and others would indicate that this industry could grow to between $4-billion and $8-billion in 1980. As this would amount to between 2.3% and 5.4% of the gross national product at that time, it is easy to see why the industry will become one of the largest in Canada in 1980.

While the projections are arrived at by various means, all of which can be questioned, the magnitude does not vary greatly. If these projections are even close, what will have to happen to make this come about?

WHAT ARE THE TRENDS?

1. Increasing Proliferation of Consumer-Oriented Services:

Many of these services will be available to the relatively uninitiated public. Some of the things we have talked about for many years such as the chequeless or cashless society will, in fact, become a reality within this decade. Operations such as CHARGEX are only the start. Other things being experimented with now include computerized shopping and customized information services.

All of this will throw a very large load on the computer and communications facilities of the country.

2. Increasing Dependence on Communications:

The economy of scale of large computers will encourage the centralization of many of the above services. This will lead to an increasing dependence on communications facilities.

The concept of the wired city involving a coaxial cable to every home capable of handling two-way communication including videophone, TV, computer assisted instruction, facsimile electronic mail, etc., may not come within this decade but experiments in this field are almost certain to start within this time frame.

3. Increasing Size of Companies Involved:

Mr. Kierans and others have said that a very large investment running into billions of dollars will be required to meet this demand. This will be for all aspects of the field including computer hardware, communications facilities and people. If this is the case, such a demand will tend to be met by large companies as these are the only ones who can raise the investment required.

4. Increasing Influence of Government:

There can be little doubt that our country is being governed according to a set of national priorities. Among these are:

• national unity
• stability of the economy
• correction of regional economic disparity

If these are the major forces behind the Government’s moves, there is little doubt that they consider the computer industry as one that is absolutely necessary to the attainment of these national aims. Therefore, there can be little doubt of their involvement in the field.

WHO ARE THE PARTICIPANTS?

1. The Manufacturers:

These are largely U.S. firms. As pointed out in the Financial Post of November 14, Canada would face an extreme balance of payments problem, if it tried to import all of the equipment necessary to meet this rate of expansion.

Therefore, it would appear that the Federal Government has already capitulated in one phase of the computer field in Canada. Their demonstrated policy is to support the large American manufacturers to conduct research and development and manufacturing in Canada. This is exemplified by the recent grants to IBM and Control Data Corporation.

This does not mean that there will not be some manufacturing in Canada by Canadian organizations but this will be restricted to small speciality items. As the experience of France and other countries would indicate that independent development of a ‘main frame1 industry is not feasible, I believe the Government has taken a reasonable approach here.

However, as the Government will clearly want to retain control of the computer service industry in Canada, I doubt that the Federal Government will support these same manufacturers in the development of large service networks.

2. The Common Carriers:

I believe that the common carriers will be involved in the computer field in one way or another. As many people have noted, the present equipment installed by the common carriers is not suitable for general data processing. However, there is a tendency to install general purpose equipment for message handling. This equipment could be used logically to provide some services. These would be largely of the nature of COMPILE, LOAD and GO operations of the type often now provided by time sharing systems.

However, the common carriers can offer little, if any, economy of scale in large data processing operations, i.e. their costs for operators, rental of commercial tape drives, disk files and other units are no different than those of any other company. Their management costs, if anything, may be higher.

All of this indicates that the place of the common carriers in the field will have to be considered very carefully but legislation totally excluding them from the field could well be “legislation against common sense” and it is not likely that this would be in the national interest.

3. The Independent Computer Service Industry:

This new group of companies, often referred to as the computer utility industry, has occasioned much of the interest in the industry in the last couple of years. While their track record has been far from uniform, they are now providing a significant alternative to the traditional way of obtaining computer power which was only attainable previously by installing one’s own computer. This industry is largely Canadian-owned and as it is both available and vocal, will certainly play a large part within the industry.

4. The User Group:

One cannot normally say a single instance is a trend but I would predict that groups of companies such as that recently formed by Eaton’s, Stelco, TRW and London Life will become more common. Their influence on the industry has yet to be felt but they could become a major force.

5. The Federal Government:

The Federal Government clearly feels that it cannot lose control of this new industry as it did with the electronics industry. The result is certain to be a major Federal Government interest in the activities of the industry. As the computer-based industry could exceed the automobile industry in terms of national importance, then one could expect to see at least the level of interest that led to the Canadian/American automobile pact.

The Federal Government’s announced interests are:

• to make the best use of Canadian resources in the computer field

• to retain Canadian ownership of as much of the field as possible

• to do what is in the public interest

When viewed against the national priorities discussed earlier, one can see why the Science Council has now switched its proposals for a major program to a Trans-Canada Computer Network and why the Department of Communications has proposed the new Canadian Computer/ Communications Agency.

COMMENT

The Federal Government is struggling for a more precise definition of what is in the national interest. Whatever their conclusions, the above analysis would indicate that major changes will be taking place in the industry within the next several years –

As those in the computer field will be the most directly affected by these changes and, further, will have the responsibility for making the changes work, I believe it is vital that we make our point of view known. Reaching a consensus through a society such as CIPS will not be easy but even a statement of various opinions will be helpful guidance.

If we do not make our position known, we will have no one to blame but ourselves if we do not like the solution that will, without doubt, be imposed upon us by the Government.