2009 connectivity survey report - neonet inc. · very successful, for the most part, in overcoming...

High-speed Internet Connectivity and Utilization in Northern Ontario: A User Guide

2009

2009ConnectivitySurvey

Networking the North

A Survey on Connectivity in Northern Ontario: NEOnet, June 2009

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A Survey on Connectivity in Northern Ontario

Table of Contents

Methodology and Logistics .......................................................................................................................2 Overview .................................................................................................................................................2 Study Sample...........................................................................................................................................2 Survey Method ........................................................................................................................................2 Logistics ..................................................................................................................................................2 Confidence...............................................................................................................................................2 Analysis ...................................................................................................................................................3

Residential Executive Summary ...............................................................................................................5 Q1. Do you have a personal computer in your household?.....................................................................5 Q2. What is the main reason why no one at this household has a computer?.........................................6 Q3. Do you have Internet access at this household? ...............................................................................7 Q4. What is the main reason for not having Internet access at this household? .....................................8 Q5. Have you ever had Internet service and then cancelled it?...............................................................9 Q7. Do you have high speed Internet access? .......................................................................................12 Q8. Does anyone in your household access the Internet from other locations?....................................13

Business Executive Summary .................................................................................................................15 Q1. Does your business have Internet access on the premises? ............................................................15 Q2. Do you have high speed Internet access at your business? ............................................................16 Q3. Does your business have a website?...............................................................................................17 Q4. For which functions does your business use its website?...............................................................18 Q5. Does your business include technology as a component of its business plan? ............................. .19

We would like to acknowledge the generous support of FedNor and NOHFC

in the development of this report.


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Methodology and Logistics Overview This document presents the key results of a survey on residential and business Internet use in Northern Ontario. The survey was conducted by Oraclepoll Research Ltd. for the North Eastern Ontario Communications Network (NEOnet Inc.) in late spring 2009, and was made possible with the generous support of FedNor and the Northern Ontario Heritage Fund Corporation. You may download a more detailed version of this survey at www.neonet.on.ca. Study Sample For the purposes of this survey, and in concert with both the provincial and federal government1 definitions, Northern Ontario is defined as the Greater Sudbury division and the districts of Kenora, Rainy River, Thunder Bay, Algoma, Cochrane, Manitoulin, Sudbury, Timiskaming, Nipissing, and Parry Sound. Five hundred (500) residents and 300 businesses from across the following regions were interviewed:

• Timmins • Sudbury • Sault Ste Marie - Algoma • Thunder Bay • Timiskaming District • North Bay - Nipissing

Survey Method Oraclepoll conducted the survey using computer-assisted techniques of telephone interviewing (CATI) and random number selection. All interviews were carried out in the respondents’ language of choice. Oraclepoll management supervised 100% of the interviews, and 30% were monitored. Logistics Staff at the surveying firm conducted interviews between June 2nd 2009 and June 11th 2009. Oraclepoll placed initial calls from 9:00 a.m. to 9:00 p.m. daily, with call-backs of no-answers and busy numbers made on a staggered, daily rotating basis up to five times (from 10:00 a.m. to 9:00 p.m.) until contact was made. In addition, Oraclepoll staff attempted to arrange telephone interview appointments with those respondents unable to complete the survey at the time of contact. Confidence The margin of error for the 500 person residential survey is ± 4.4%, 19/20 times. The margin of error for the survey of 300 businesses is ± 5.6%, 19/20 times. 1 Ministry of Municipal Housing and Affairs and Statistics Canada


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Analysis Where possible, statistical results from Northern Ontario are compared with national figures in order to provide context and a foundation for discussing their potential implications. It should be noted that in 2005 Statistics Canada replaced the Household Internet Use Survey (HIUS) with the Canadian Internet Use Study (CIUS), which focused on individual Internet usage rather than household totals. This shift in data collection makes it difficult to draw comparison between the data collected by Oraclepoll and national figures, however where possible the Northern Ontario data will be compared to data collected by the 2007 (CIUS) or figures extrapolated from earlier data sets using projected average growth rates. Exhibit 1 presents a summary of significant findings in Northern Ontario, as compared to national statistics. Exhibit 1. Key Findings of Business and Residential Internet Statistics for Northern Ontario and Canada

Note that Northern Ontario appears to have higher (and therefore better) penetration rates than the Canadian average for:

• Household computer penetration rates • Household Internet penetration rates • Household high-speed connection • Business Internet penetration rates • Businesses with websites • Businesses that buy services online

In 2005, Northern Ontario lagged significantly behind the national averages in two major indicators: household and business high-speed Internet penetration rates (52% v. 69% and 55%


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v. 75% respectively). Since then, Northern Ontario has experienced significant growth in residential and business high-speed penetration rates, effectively closing the gap with national figures (75% v. 74 % and 74% v. 75% respectively). The exponential growth in high-speed penetration rates, nearly 45% since 2005, across Northern Ontario may be directly related to the broadband infrastructure work being done by regional technology development organizations and their public and private sector partners. While the regional broadband infrastructure projects have addressed one of the greatest obstacles to improving high-speed Internet penetration rates – access to broadband infrastructure – there remain pockets of population without service and a small number of residents and businesses that are not subscribing to high-speed service because they are unaware of any compelling reasons for using broadband or perceive the cost of high-speed connectivity to be too high. Northern Ontario penetration rates are greater than the Canadian average for a number of reasons:

• Northern Ontario-based government funds, such as FedNor and the NOHFC, have maintained a strong financial and resource commitment to improving the Information and Communications Technology (ICT) infrastructure throughout the region.

• Private sector partners have been increasingly interested in partnering with regional technology development organizations and the public sector to expand the broadband footprint into areas that would otherwise remain unserved.

• Regional technology development organizations continue to educate residents and businesses on the benefits of and the necessity of embracing high-speed Internet.

• Living in remote and rural locations encourages creative solutions to overcoming distance and geography. Online purchasing among businesses is more common here perhaps because distance from supplies makes it more of a necessity.

The implications for policy makers and community development organizations include:

• Regional broadband infrastructure projects employed over the past five years have been very successful, for the most part, in overcoming Digital Divide concerns in terms of physical access and education.

• Investment in Northern Ontario broadband connectivity has encouraged penetration rates that surpass the national average, ultimately creating a more supportive environment for job creation, service delivery, and youth retention.

• Further investment in Northern Ontario broadband connectivity should focus on extending the broadband footprint, as well as enhancing the existing infrastructure so that local businesses and residents can benefit from new online applications.

• Investment cannot stop at funding infrastructure projects. Education and awareness programs must be supported to help businesses and households apply broadband services in the context of their individual needs. Basic Internet cannot accomplish the innovative applications available through broadband.

• The focus of such education programs should be “adopting high-speed applications” to encourage a culture of innovation and greater comfort with technology in general.


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Residential Executive Summary Q1. Do you have a personal computer in your household? The percentage of Northeastern Ontario households surveyed that have a personal computer has increased by 2% since 2005 to 85%. Of the remaining 15% of households 4% plan to buy a computer within the next year, and the remaining 96% have no plans or don’t know if they will buy one.

NATIONAL COMPARISON According to a StatsCan 20072 study, Canadians have a 78.4% household computer penetration rate. Adjusted to 2009 figures, given the average annual rate of growth since 2003 (3.5%) it is reasonable to assume that national figures as of 2009 are now in the area of 84.0%, comparable to that found in Northern Ontario. IMPLICATIONS Four years ago about 10% more households in Northern Ontario had a personal computer compared with the rest of Canada whereas today’s figures are similar. The computer ownership figure in the rest of Canada increased fairly significantly while the Northern Ontario average remained fairly stagnant. This increase in computer ownership in the rest of Canada may be explained by the significant drop in computer prices over the past few years, increased reliance and use of computers to do business, socialize and access goods and services.

2 Source: http://www40.statcan.gc.ca/l01/cst01/famil09c-eng.htm?sdi=computer


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Q.2 What is the main reason why no one at this household has a computer? “Lack of interest” remained the number one reason, cited by nearly four in ten respondents (39%), for not having a personal computer in the household. Being too old (26%) and not knowing how to use a computer (19%) were the next most-common reasons, followed by the cost, high-speed Internet not being available and respondents using computers at other locations.

The fierce competition in the household computer market has driven the cost of ownership significantly down over the past five years, with mini-laptops now available for under $500. Therefore, it is not surprising that fewer than 1 in 10 respondents without a household computer (8%) claimed that cost was a factor for their decision. The most significant finding is that nearly 5 out of 6 non-computer owners (85%) failed to see the benefits of owning a personal computer, offering reasons that included “too old to learn”, “don’t know how to use” and “no reason to use”. Statistics Canada found that only 28.8% of Canadians over the age of 65 used the Internet in 2007,3 approximately 32% in 2009. Although the number of computer-owning households in Northern Ontario is comparable to that nationally, the findings provide a clear indication that more needs to be done to educate the public on the merits of technology. There has been programming available in the past to help combat the “too old to learn” and “don’t know how to use” responses, however the findings suggest that more work must be done to make seniors more comfortable with technology.

3 Source: http://www40.statcan.gc.ca/l01/cst01/comm35a-eng.htm


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Q3. Do you have Internet access at this household? Northern Ontario continues to return significant figures with respect to Internet penetration rates with 92% of those respondents with a household computer having some form of Internet access. This means that nearly 8 out of 10 homes (79% of all respondents) in Northern Ontario have Internet access. Four percent of computer-owning households plan to get Internet within the year, and the remaining 4% either don’t know or have no plans to get Internet access.

NATIONAL COMPARISON According to StatsCan, 72.7% of Canadian households had Internet connections in 2007.4 Figures from Statistics Canada have also revealed an upward trend year over year, therefore if we extrapolate growth over the past two years – based on an average annual growth of 5% since 2003 – the adjusted figure of 80% remains less than that found in Northern Ontario. Compared to Internet penetration rates in rural Canada, the national figures are three-quarters of those found in Northern Ontario. Only 65%5 of residents living in small towns or rural areas accessed the Internet in 2007 or an adjusted figure of 72% in 2009, compared to 79% in Northern Ontario. IMPLICATIONS The significantly high penetration rate in Northern Ontario is most certainly a function of the level of private and public sector investment in broadband infrastructure in the region since 2005. Investment brought on by local businesses and residents demand to counter remoteness of their communities. Northern Ontario represents nearly 90% of Ontario’s land area, with a population density of approximately 1 person per square kilometre.6 Broadband infrastructure 4 Source - http://www40.statcan.gc.ca/l01/cst01/famil09c-eng.htm?sdi=computer 5 Source - http://www.statcan.gc.ca/daily-quotidien/080612/dq080612b-eng.htm 6 Source - http://www.mndm.gov.on.ca/nordev/documents/sector_profiles/northern_ontario_e.pdf


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provides area businesses with an opportunity to tap into larger markets and area residents with an opportunity to access a wide variety of professional development and educational programs not delivered in the community. By vastly reducing the costs of communication and data transfer, broadband opens up opportunities previously restricted to the larger population centres to participate in innovation and economic activities based on exchanges of information products and services.7 Internet penetration rates, particularly broadband rates, will continue to rise as more home-based businesses determine ways of using broadband to reach their markets and residents subscribe to social networking applications and/or adopt alternative communication applications such as telephony and voice over internet protocol (VOIP).

Q4. What is the main reason for not having Internet access at this household? Those identified as not having Internet access were asked why they chose not to subscribe to the service. Lack of interest/no reason to use (29%) was the most common reason for not having a connection, followed by the “old age”, not knowing how to use, using the Internet outside the home, and dial-up only available in the area all at 14%. Cost and unsure the least cited reasons (7% each).

7 Northern Ontario in the network economy: Broadband, information technologies, and economic development, Charles H. Davis Ph.D. E.S. Rogers Sr. Research Chair Rogers Communications Centre Faculty of Communication & Design Ryerson University, Toronto, June 2009


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NATIONAL COMPARISON Of the 500 households polled only 8% of those with a home computer said they did not have Internet access, of which nearly one-third of respondents (29%) cited that they have no interest or no reason to use the Internet. By itself this figure may not be too staggering, however when combined with other responses that limit demand for broadband such as being “too old” and “not knowing how to use,” nearly 6 out of 10 (57%) see no need for Internet Access. National figures from 2007 demonstrate that age remains an important factor in the adoption of Internet. In 2007, 96% of persons aged 16 to 24 went online, more than three times the 29% among seniors aged 65 and older.8 IMPLICATIONS The discrepancy of Internet use by age group, economic status, and education is of great concern as a growing number of private and public institutions are shifting to the adoption of online applications to serve their clients. The shift in service delivery mechanisms could leave certain sectors of our population in the dark. Forty-five percent of private sector businesses and nearly 94% of public sector institutions have a web presence, with nearly 90% of all Health and Social Services institutions offering information online.9 While the digital divide is being overcome in the north it appears that more work must be done in educating northern businesses and residents on why they should be using the Internet. The Organization for Economic Cooperation and Development (OECD) calls this development the “use divide”.10 Computer training programs that target the non-user groups must continue to be developed and delivered at public Internet access sites, or through informal workshops, information sessions and opinion-leadership promotions in an effort to make the technology beneficial for everyone. Q5. Have you ever had Internet service and then cancelled it? Respondents who lack Internet access at home were asked if they had previously subscribed to Internet service, but had since cancelled it. Fifty-six percent stated that they at one time were connected but cancelled the service. This represents 4% of all households surveyed11. Forty-four percent of households without access had never subscribed to the Internet, or 3% of all households surveyed. The main reason cited for cancellation was high-speed not available (33%), followed by moved to a new location (27%), no interest in reconnecting (22%), Internet being abused (6%), having access at other locations (5%) and poor service (5%).

8 Source - http://www.statcan.gc.ca/daily-quotidien/080612/dq080612b-eng.htm 9 Source - http://www40.statcan.gc.ca/l01/cst01/econ146e-eng.htm 10 OECD Information Technology Outlook 2004. 11 56% of the 8% households with no Internet access


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IMPLICATIONS Further expansion of broadband infrastructure is required to provide for ubiquitous Internet usage in Northern Ontario. One-third of respondents suggested that they are not presently connected because high-speed Internet is not available. While nearly 75% of all northern residents have high-speed Internet access, it is clear given the reasons for disconnection that dial-up and unreliable service will not suffice. It is important to note that the cost of high-speed connections was not cited by any of the respondents, down from 25% in 2005. This could be due to increased competition in the telecommunications industry. Q6. What do you use the Internet at home for? Those with Internet access in the house were asked to list their primary use for Internet service. Twenty-five percent of the respondents cited communication purposes as their primary use of the Internet. This is a significant change from 2005 when more than one third of respondents cited “work/business” as their main reason for connectivity, it is now tied as the fourth most cited reason along side shopping. The next most popular applications were also related to social and or personal applications – Banking (18%), Entertainment (14%), Shopping and Work/Business (11%), Schoolwork (10%), and Other (10%).


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IMPLICATIONS Canadians and for that matter residents of Northern Ontario have employed Internet applications, such as Facebook (65% of adult Canadian Internet social networking users)12, as a cheap form of keeping in touch with one another. An Ipsos Reid Study conducted in 2007 found that nearly 40% of Internet enabled adult users had visited an online social networking site, with nearly 30% having an online profile.13 While the take-up rate varies by cohort, it is still remarkable to think that 2 out 5 Canadians are aware of and utilize social networking sites. Nearly eight-in-ten visitors to social networking sites have been converted to active users.14 The same study found that Canadian Facebook members use the application on average 5.9 hours a week.15 A direct comparison with national figures with respect to online activities i.e. banking, education, and entertainment, is not possible since respondents were only asked for their primary use. The national figures are as follows; Banking and Bill Payments 62.5%, Education 42.9%, and Entertainment – Playing Games 38.7%/News and Sports 63.7%.16 Over the last few years content and services have been shifting from their traditional media – Cable TV, Newspapers, and in Branch or ATM banking – to online services. An increasing amount of pressure will be placed on the existing broadband infrastructure as the number of users taking advantage of the online services grows, a problem which many Internet Service Providers

12 Source - http://www.ipsos-na.com/news/pressrelease.cfm?id=3664 13 Source - http://www.ipsos-na.com/news/pressrelease.cfm?id=3664 14 Source - http://www.ipsos-na.com/news/pressrelease.cfm?id=3664 15 Source - http://www.ipsos-na.com/news/pressrelease.cfm?id=3664 16 Source - http://www40.statcan.gc.ca/l01/cst01/comm29a-eng.htm?sdi=banking


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(ISPs) already experience with respect to bandwidth intensive applications such as peer-to-peer file sharing and video streaming, resulting in a move to bandwidth shaping or “throttling.”17 Improving the existing broadband infrastructure to allow for the increased bandwidth demand should be the primary focus of any future broadband developments. Some jurisdictions across Canada have already initiated or completed fibre to the home/curb projects, capable of speeds up to 100Mbps. 18 For example, Videotron in Quebec is offering residential high-speed up to 50Mbps19 and SaskTel in Saskatchewan is offering up to 25Mbps20 in some communities. Q7. Do you have high speed Internet access? Respondents with Internet access at the house were asked about their access speed. With the number of broadband expansion projects that have been completed throughout Northern Ontario over the past four years it would be safe to assume that the trend would be for a greater number of residents having access to high-speed Internet. Survey respondents confirmed this assumption; in fact an overwhelming majority of Internet users (75% of respondents) have high-speed access, nearly a 50% increase from the 2005 figure (51%). Among the 24% lacking high-speed access, 62% stated that it is not yet available in their area, while 18% said it was too expensive, 11% named a lack of interest as the main reason. Six percent claimed that dial-up suits their needs and 3% didn’t know.

17 Source - http://www.cbc.ca/technology/story/2009/10/20/crtc-net-neutrality-ruling.html 18 Source - http://www.enterprisenetworksandservers.com/monthly/art.php?2956 19 Source - http://www.videotron.com/service/internet-services/promotions 20 Source - http://www.sasktel.com/personal/internet/high-speed-internet.html


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NATIONAL COMPARISON High-speed Internet connections are increasingly popular with Internet users on a national level – 88% of home users had a high-speed connection in 2007.21 The national figure could now stand at over 90%, given the 10% growth from 2005 to 2007.22 These figures highlight the fact that even with nearly 50% growth in high-speed access in Northern Ontario, a great deal work still remains. IMPLICATIONS Public and private sector investment in broadband infrastructure for Northern Ontario has generated substantial growth in the uptake of high-speed Internet connections, nearly 50% since 2005. Seventy-five percent of residential Internet users have high-speed access, with an additional 16% of Internet users indicating that they would subscribe to the service if it were available. This suggests that the high-speed Internet penetration rate in Northern Ontario would be comparable with the national findings if the infrastructure were there to meet the demand. Infrastructure development in Northern Ontario is hampered by the substantial cost associated with the great distances to cover and our topography, costs that are not quickly recovered due to the proportionately small number of customers that are gained by bringing service to an area. Regional technology development organizations must continue to facilitate public and private partnerships to overcome the cost barrier. In order to eliminate the disparity in availability the public sector must remain committed – politically and financially – to increasing the broadband footprint in Northern Ontario. The further enhancement of the broadband infrastructure and the subsequent increase in high-speed Internet access will place Northern Ontario on an even playing field with the rest of Canada and make it more attractive to economic development opportunities. Q8. Does anyone in your household access the Internet from other locations? Oraclepoll asked all respondents, regardless of household Internet access, if a member of their household regularly accessed Internet at other locations. Over half of the respondents (52%) access the Internet from a friend or relatives home, while 42% access it from work, 33% access it from school, 18% at a public library, 7% access it at Internet Cafés, and 7% indicating other. NATIONAL COMPARISON The vast majority of Internet users aged 16 or older, 94%, reported personal Internet use from home during 2007, while 41% said they used it from work, 20% from schools and 15% from libraries.23 The findings in Northern Ontario are with respect to Internet use at work and public libraries, however there is a significant difference, 13%, in the number of users accessing from schools. The number of Northern Ontario Internet users that access the Internet from school has dropped by 4% since 2005, however this figure could be considered to be statistically unchanged when the margin of error is taken into account.

21 Source - http://www.statcan.gc.ca/daily-quotidien/080612/dq080612b-eng.htm 22 Source - http://www.statcan.gc.ca/daily-quotidien/080612/dq080612b-eng.htm 23 Source - http://www.statcan.gc.ca/daily-quotidien/080612/dq080612b-eng.htm


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IMPLICATIONS A growing number of Northern Ontario residents are accessing the Internet from home or from the home of a friend or relative. This coincides with greater availability of high-speed Internet access throughout the region due to the broadband infrastructure projects that have been completed in the last four years. Even with greater residential availability, the number of Internet users accessing the Internet from public facilities in Northern Ontario is still significantly higher than in the rest of Canada. While we continue to promote additional broadband infrastructure projects, we cannot lose sight of the important role that public access sites play in educating the public on the benefits of the Internet and in developing a technological culture in Northern Ontario. Public access sites, such as libraries and schools, need to continue offering progressive training sessions as well as fundamental computer skills. The public and private sector must recognize that the burgeoning technological culture will necessitate further investment in broadband infrastructure, in order to provide residents with enough bandwidth to fully experience the Internet.


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Business Executive Summary Q1. Does your business have Internet access on the premises? The survey found that 95% of businesses in Northern Ontario have Internet access, with an additional 2% of all businesses surveyed planning to acquire Internet access sometime in the next 12 months. Of those businesses that are not currently connected to the Internet (5%), the main reason for not having Internet service was the cost (43%), followed by a lack of need or interest (36%). The Internet being abused, that they do plan on getting it at some point, and that they did not know rounded out the responses.

NATIONAL COMPARISON Statistics Canada found, in 2007, that 86.66% of private sector organizations use the Internet.24 If we adjust for 2009 using the average rate of growth rate since 2003, we might reasonably assume that business Internet penetration is approximately 91% nation-wide. IMPLICATIONS Northern Ontario businesses are keeping pace with the rest of Canada with respect to Internet adoption (95% v. 91% respectively). However, one might suggest that a higher level of Internet penetration in Northern Ontario may be a function of highly dispersed communities, the distance to market and suppliers, and due to the influence of the relatively high percentage of public sector workers in the region (who use Internet at a rate of 99%).

24 Source: http://www40.statcan.gc.ca/l01/cst01/econ146b-eng.htm


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Q2. Do you have high speed Internet access at your business? Respondents with Internet access at their business premises were asked about their connection speeds. Nearly three-quarters (74%) responded that they have high-speed access at their place of business, an increase of 35% over 2005. Only 15% of businesses were still connecting to the Internet using dial-up, and 11% didn’t know. Of those with dial-up connections, the main reasons for having slower service were a lack of availability (56%), followed by cost (26%) and a lack of interest (14%).

NATIONAL COMPARISON It is important to note that respondents were asked what types of Internet connection (i.e. Cable, DSL, Satellite, T1, or Dial-up) the business utilizes rather than simply does the business have high-speed. Given that the lowest level of high-speed service is nearly 30 times faster than the highest level of dial-up, it may be possible to conclude that the respondents that answered “Don’t Know” were unsure of the type of high-speed access not whether the business had it or not. If this assumption were correct, the percentage of businesses with high-speed Internet access would increase to 85%, comparable to the national 2007 Statistics Canada of 86.6625. While data is not readily available for 2009 we can project the figure by using the average annual rate of growth from 2003 (2.5%), resulting in a national figure of 91%. IMPLICATIONS The rate of high-speed penetration in Northern Ontario businesses has grown exponentially over the past four years by nearly 35%, significantly outpacing the 12% increase nationally. This is a 25 Source: http://www40.statcan.gc.ca/l01/cst01/econ146b-eng.htm


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clear indication of the digital divide that existed just four years ago and how public and private sector investments in ICT throughout the region have eliminated that gap. Without these partnerships we may have found still that connectivity was far more common in urban areas and cities with more than 10,000 people (of which there are fewer than 20 in northern Ontario), rather than in communities of 100 or less. A concern for further development in Northern Ontario is that infrastructure development projects are growing increasingly costly, relative to the number of dwellings and businesses impacted. Therefore, the public sector funding agencies and the regional technology development organizations must embrace new methods of expanding the broadband footprint, such as partial reimbursement of capital costs associated without adopting high-speed alternatives i.e. Satellite or Wireless Internet. To encourage higher penetration rates the regional technology development organizations should continue to educate the business community on the importance of high-speed Internet adoption and application. – promoting alternatives such as “high-speed light” packages – and the need to market their products online. Alternative broadband packages offer many of the same benefits as traditional high-speed 1.5 Mbps service, such as an always-on connection, no need for an additional line, and faster file transfer speeds. Q3. Does your business have a website? Two-thirds of the businesses interviewed, 66%, have a business website.

NATIONAL COMPARISON According to Statistics Canada forty-one percent (41%) of the Canadian Private Sector businesses had a website in 2007,26. If we adjust the rates to 2009 levels using the average rate of growth (2.5%) experienced from 2003, it is reasonable to assume that the penetration rate is now approximately 46%. Accounting for the margin of error in the business survey (+/-5.6%), the penetration rate found in Northern Ontario is an astonishingly 14% higher than the

26 Source: http://www40.statcan.gc.ca/l01/cst01/econ146c-eng.htm


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approximated national average. The higher northern statistics may be a function of the type of industries found in Northern Ontario i.e. Tourism, Mining, and Forestry. IMPLICATIONS Regional technology development organizations, along with the public sector, can foster additional growth in the adoption of website applications by continuing to educate the business sector on the importance of websites and the benefits that can be gained. Studies show that small-group networking and face-to-face dealings with trusted contacts can increase the likelihood of technology adoption. In 2008, the Ontario Ministry of Small Business and Entrepreneurship published a guide “How You Can Profit From E-business,” which provides business owners with crucial information concerning the development of a business website. The Muskoka Community Network, with support from FedNor, has introduced a pilot project which provides some financial assistance to businesses that are enhancing or developing their company website. These programs will continue to spur growth in website penetration in Northern Ontario and should be considered by like agencies across the country to urge growth in the national penetration rate. Q4. For which functions does your business use the Internet? Communicating with suppliers and clients via the Internet is nearly ubiquitous, with 86% of respondents citing that as the primary use of the Internet in their business. Nearly half use the Internet to advertise goods and services on the Internet (48% down slightly from 2005), and 27% for selling goods and services online (up slightly from 2005). Other business Internet applications include financial transactions (15%) up nearly 400% from 2005 figures, research (12%), other communication (5%), and education (4%).


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NATIONAL COMPARISON Northern Ontario businesses continue to embrace transactional website applications in greater numbers than their national counterparts, nearly 3 out of 10 business in Northern Ontario (27%) sell products online compared to 1 in 10 nationally (9%).27 IMPLICATIONS Northern Ontario businesses recognize that the adoption of web-based applications will assist them in streamlining their businesses, improving communications, promoting their products and even selling goods and services. Even when you take into consideration the +/- 5.6% margin of error, for each national business that adopts advanced web-based applications there are two Northern Ontario Businesses that have done so. The respondents also provided a number of suggestions as to educational sessions or workshop that could be delivered to assist them in getting the most out of the Internet experience. Customer relationship management or feedback tools led the way, followed by search engine optimization, online security, Voice Over Internet Protocol (VOIP), social media and marketing, and e-commerce. Q5. Does your business include technology as a component of its business plan? Forty-one percent of Northern Businesses indicated that application and adoption of technology is a part of their organization’s business plan. This figure is concerning since it represents a drop of 11% from the 2005 findings, where 52% of respondents mentioned that the business plan included technology. Even when you account for the margin of error there still remains a reduction in the number of businesses without technology in their business plans.

27 Source and Calculation: http://www40.statcan.gc.ca/l01/cst01/econ146e-eng.htm . The 2009 figure is an approximate based on the 2007 StatsCan figure of 8.17% and an average annual growth rate from 2003 of 3.6%


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A little over half of the respondents (53%) indicated that they have a business plan, but it does not incorporate a technology component. One in twenty-five businesses didn’t know if they had a plan or if technology was part of it, and 2% of businesses continued to operate without a formal business plan. IMPLICATIONS Regional technology development organizations, Community Futures Development Corporations, Small Business Centres, and other organizations that work with businesses to develop a business plan need to emphasize the importance of the adoption of technology, as well as formulating a clear plan for its adoption. The importance of having a clear plan which includes the purchasing, maintenance, security, utilization, and replacement of technology will be furthered as the number of connected businesses increase – as the survey findings suggest. Regional technology development organizations should reach out to businesses that have included technology in their business plans for assistance in encouraging other business to do likewise. Twenty-three percent (23%) of the businesses that have technology as part of their plan are using it for marketing/advertising, 14% simply to have a web presence, 11% customer relations, 10% training/education, and 7% for financial transactions. It is important to note it is possible that the 53% of businesses that don’t have technology as part of the business plan may very well be using it in the form of an electronic accounting package, a cell phone and the Internet, but perceive them as business tools, and not technology.

Northeastern Ontario Communications Network Inc. (NEOnet Inc.)www.neonet.on.ca

2009 connectivity survey report - neonet inc. · very successful, for the most part, in overcoming...

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