Despite ongoing geopolitical challenges and increasing climate issues, Canada remains one of the wealthiest countries in the world, with a gross domestic product (GDP) of over US$1.6 trillion.
However, with the constant fluctuations happening in the global economy, it’s important for Canada to continually learn from other prosperous nations to maintain its strong economic position. From diversification to innovation, there are many lessons that Canada can learn to ensure its economic success in the future. One of the major takeaways that Canada can learn from richer countries is how to continually increase its own GDP.
While Canada has one of the most advanced economies in the world, it falls behind on the standard marker of a country’s wealth based on GDP per capita. According to the IMF, some of the countries that hold the top spots include Luxembourg, Ireland, Switzerland, and Qatar.
Additionally, data from the World Bank rates the United States with the highest GDP overall in the world, boasting a total of US$21.4 trillion. Other wealthy countries include China, Japan, Germany, and the United Kingdom. All of these nations have similar core themes — they have invested heavily in education, innovation, and technology.
Education, innovation, and tech key pillars
For example, Japan has a highly skilled workforce, partly thanks to its focus on education. The country has one of the highest literacy rates in the world, with over 99 per cent of the population able to read and write. Additionally, Japan has invested heavily in research and development, leading to the creation of innovative technologies such as robotics and high-speed trains.
Another example is Germany, which has a strong manufacturing industry. The country is known for producing high-quality products such as cars and machinery. Germany has also invested heavily in renewable energy, with a goal of becoming carbon-neutral by 2050.
Canada can learn from these examples by investing in education and innovation. By encouraging the development of a highly skilled workforce, Canada can attract businesses that require a talented workforce. Additionally, by investing in research and development, Canada can create new technologies and industries that can boost its economy.
When it comes to the stock market sectors, energy and mining have long been major players in Canada’s economy. However, in recent years, there has been a shift towards technology, innovation, and renewable energy as the country looks to diversify its economy. This shift can be seen in Canada’s largest investments, which include companies like Shopify (SHOP) and Constellation Software (CSU).
Canada has already shown potential in the technology sector. Cities such as Toronto and Vancouver have seen a surge in tech start-ups, like with Hootsuite being based in Canada. By continuing to encourage innovation and investment in the technology sector, Canada can become a global leader in this field.
Tech start-ups have proved potential
Shopify, in particular, has seen significant growth in recent years despite recent events. The company, which provides e-commerce services to businesses, has seen its stock price rise by over 3,000 per cent since going public in 2015. This growth can reflect the increasing importance of technology in Canada’s economy.
That being said, the energy and mining sectors are still essential to Canada’s economy. The country is one of the world’s largest producers of oil, natural gas, and minerals and is home to large-cap players like Suncor Energy (SU) and Teck Resources (TECK). However, with the increasing focus on renewable energy, Canada must pay attention to other countries on how to transition to a more sustainable economy.
Canada’s largest investments are in the energy and mining sectors. According to data from Statistics Canada, the mining, quarrying, and oil and gas extraction sector accounted for over 7.00 per cent of Canada’s GDP in 2019. Additionally, this sector reportedly employed over 266,000 Canadians.
However, with the increasing focus on renewable energy and sustainability, Canada’s energy and mining sectors must adapt to remain competitive. The Canadian government has already taken steps to address this, with initiatives such as the Clean Energy Ministerial and the Pan-Canadian Framework on Clean Growth and Climate Change.
Companies have already started adapting to this change. For example, Teck’s recent spin-off announcement shared the company’s plans to step away from its steelmaking coal assets and put more focus on its renewable energy projects.
Renew and diversify
One country that has successfully transitioned to renewable energy is Denmark. The country has invested heavily in wind power and now generates over 40 per cent of its electricity from wind turbines. Additionally, Denmark has a strong focus on energy efficiency, with strict building codes and regulations.
Another country that has made significant strides in renewable energy is Germany. The country’s government has a goal of generating 80 per cent of its electricity from renewable sources by 2050. To achieve this goal, Germany has heavily invested in wind and solar power, as well as energy efficiency measures.
Canada can learn from these examples by increasing investment in renewable energy. By transitioning away from fossil fuels, Canada can reduce its greenhouse gas emissions and become a leader in sustainable energy. Additionally, Canada can improve energy efficiency by implementing strict building codes and regulations.
Moreover, small but mighty countries Ireland and Luxembourg are top of IMF’s list with their highly prosperous economies. Despite their small size, both countries have managed to become some of the wealthiest nations in the world.
Part of this can be attributed to the Irish economy’s heavy reliance on exports, particularly in the technology and pharmaceutical sectors. Companies such as Apple, Google, and Pfizer have significant operations in Ireland. Additionally, Ireland has a highly educated workforce, with a strong focus on education and innovation.
Luxembourg’s economy is also heavily reliant on exports, particularly in the financial services sector. The country is known for its favourable tax laws, which have attracted many multinational corporations to set up operations in Luxembourg. Additionally, Luxembourg also has a highly skilled workforce, with a foundation of education and training.
Great white north may be attractive hub
Canada can learn from these examples by attracting multinational corporations to set up operations in Canada. By offering favourable tax laws and creating a highly skilled workforce, Canada can become a hub for international business. Additionally, Canada can invest in sectors that are likely to experience growth in the future, such as technology and renewable energy.
In conclusion, there is no denying Canada has a strong economy, but it’s important for the country to continue to learn from other prosperous nations. By investing in education, innovation, and technology, Canada can attract businesses and create new industries.
Additionally, transitioning to renewable energy and improving energy efficiency can support Canada to become a leader in sustainable development. Finally, by encouraging international investment and attracting multinational corporations to make the great white North a hub for global business.
