The Knowledge-Based Economy: Shifts in Industrial Output

This paper analyses industrial structure in Canada over the period 1971 to 1991 using Statistics Canada's input-output model and explores more closely the role played by the "new economy" industries, those industries where innovation through the uses of knowledge, technology, and skills is the key to generating growth. The conclusions indicate that Canadian industrial structure is becoming increasingly knowledge-based and technology- intensive, with competitive advantage being rooted in innovation and ideas, the foundations of the new economy. While in the past domestic demand mainly influenced the growth of industries, trade is becoming much more important. High-knowledge industries in the tradable sector seem to have benefited the most from export performance; import competition has hastened the relative decline of low-knowledge industries.