composite image representing use of AI in urban and rural businesses

The Canadian Chamber of Commerce’s Business Data Lab (BDL) has recently unveiled a report shedding light on the adoption of Generative Artificial Intelligence (Gen AI) by Canadian businesses. The report, titled Prompting Productivity: Generative AI Adoption by Canadian Businesses, addresses the sluggish pace at which Gen AI is being embraced and the various obstacles impeding this critical technological advancement.

The Urgency of Gen AI for Canadian Productivity

Canada’s economic landscape is facing a significant challenge: low productivity. According to the BDL report, Gen AI represents a vital opportunity to reverse this trend. Patrick Gill, Senior Director of Operations and Partnerships at BDL and the report’s lead author, emphasizes the urgency, stating, “Gen AI is a generational opportunity to boost Canadian productivity at a time when our performance is steadily headed in the wrong direction.”

Current Adoption Rates and Barriers

Despite the potential of Gen AI, the report reveals that a substantial portion of Canadian businesses have yet to explore this technology. Key findings include:

  • Only 14% of Canadian businesses are early adopters of Gen AI, with larger businesses being nearly twice as likely to use it compared to smaller businesses.
  • Approximately 73% of Canadian businesses have not considered using Gen AI.
  • The adoption rate could potentially reach a tipping point in the next three to six years, a pace that may be insufficient for maintaining global competitiveness.

Factors Influencing Adoption

Several factors are contributing to the slow adoption of Gen AI among Canadian businesses:

  • Trust and Knowledge: There is a significant trust gap, with Canadians being less knowledgeable and more apprehensive about AI compared to citizens of other countries.
  • Skilled Workforce: About 30% of businesses cite challenges in hiring skilled employees and accessing finance as major barriers.
  • Public Acceptance: Public interest and acceptance of AI are crucial, as they are likely correlated with business adoption rates.

Rural vs. Urban Adoption

The report highlights a disparity in Gen AI adoption between urban and rural businesses. Urban businesses are adopting Gen AI at a significantly higher rate (15%) compared to rural businesses (8%)​​ . This gap underscores the need for targeted strategies to support rural businesses in accessing and implementing Gen AI technologies.

Strategic Recommendations

To address these challenges and accelerate Gen AI adoption, the BDL report provides several recommendations for businesses and policymakers:

  • Businesses: Start with small-scale pilot projects to validate the feasibility and impact of Gen AI before expanding to larger initiatives. This gradual approach allows for the necessary training and preparation of employees.
  • Government: Support Gen AI adoption by upskilling workers, setting adoption targets, engaging the private sector, and ensuring proportionate, risk-based regulation.

Industry-Specific Insights

The report details early adoption rates across various industries, highlighting that businesses in information and cultural industries, professional services, and finance are leading the way. These industries have historically integrated technology heavily into their operations and employ highly educated workers, which may contribute to their higher adoption rates. Additionally, businesses involved in international trade are more likely to adopt Gen AI, benefitting from exposure to global best practices and economies of scale.

Addressing the Skills Gap

The report highlights a significant skills gap among Canadian workers, with 68% of businesses reporting that not all employees are fully proficient in the skills needed for their current roles. Gen AI has the potential to bridge this gap, offering tools to upskill workers and improve overall productivity. However, only a small fraction of job postings currently mention Gen AI, indicating that more effort is needed to integrate these skills into the workforce​​ .

The Path Forward

The report underscores that immediate action is required to leverage Gen AI for boosting productivity. As Gill notes, “Canadian businesses must innovate or die, and that means embracing Gen AI.” Early adopters are already using Gen AI to enhance the production and quality of goods and services, serving as a call to action for others to follow suit.

The Canadian Chamber of Commerce, through its Business Data Lab, highlights the critical role of Gen AI in addressing Canada’s productivity crisis. By understanding the current landscape and implementing strategic recommendations, Canadian businesses and policymakers can work together to ensure a competitive future on the global stage. The time to act is now, to harness the potential of Gen AI for the betterment of the Canadian economy and standard of living.

The full report can be read by clicking on the image below.

Cover image from the Canadian Chamber of Commerce's Report on GenAI