Canada’s technology sector is a key driver of innovation as well as economic growth. Contrary to perception, digital technologies have not rendered Canadians jobless. Instead, they have helped improve the contribution of the workforce on enhancing efficiency. It thus does not come as a surprise that the likes of Open Text Corp (TSE:OTEX), Enghouse Systems Limited (TSE:ENGH) and Absolute Software (TSE:ABT) continue to elicit strong interest from investors.
Growing Tech Sector Value
Digital technologies are already sending shockwaves from the aerospace to the pharmaceutical industry, given the improved levels of efficiencies that they have brought about. A report by the Brookfield Institute for Innovation + Entrepreneurship affirms steady growth of the Canadian tech sector.
The Technology sector accounted for as much as $117 billion or 7.1% of Canada’s economic output, in 2017. The fact that the output was much bigger than what the finance and insurance sector generated underscores tech sector value in enhancing economic growth.
In addition to increased economic output, the technology sector is one of the biggest employers’ accounting for more than 5% of the total employment. The sector is also by far the biggest investor in research and development that continues to employ a good number of people. Canada’s tech sector is not only a source of economic growth. Instead, it is changing the way workforce operate as well as how people live their lives.
Thanks to advancement in digital technologies, manufacturing companies will no longer have to mass-produce identical goods in jurisdictions with low labor costs and then ship to the end consumer. Local production of highly customized goods is slowly becoming a reality thanks to innovation in the Canadian tech sector. Manufacturing of goods close to the consumer is slowly becoming a reality.
Digitization of various operations has triggered strong demand for cloud computing as well as mobile technology. The market of the Internet of Things in Canada is thus poised to hit highs of $6.5 billion. It thus does not come as a surprise that multinationals are increasingly investing in Canadian tech companies as well as innovations.
Canada Tech Sector
Amidst the expected growth in the Canadian tech sector, Open Text Corp continues to provide attractive investment opportunities. The company is fresh from strengthening its partnership with Google’s cloud division.
The stock has been on an impressive run since the start of the year depicted by a 30% plus rally since the start of the year. The stock is likely to continue edging higher as a deal will Google is set to make its solutions available in Google’s cloud platform.
Absolute Software Corporation is another company that continues to outperform in the burgeoning Canadian tech sector. While the stock has pulled lower in recent months, it remains an attractive long-term investment play as it continues to develop and market endpoint management and data security solutions.
Enghouse Systems sums up the top three stocks to watch as the Canadian tech industry continues to enjoy robust growth. The company develops and sells enterprise application software worldwide. The acquisition-focused company has managed to post year over year growth in revenues. The stock is currently up by more than 5% for the year.
