Joël Blit is a professor of economics at the University of Waterloo, the chair of the Council on Innovation Policy and a senior fellow at the Centre for International Governance Innovation.
The last big disruptive technology, the internet, suggests that most of the value is often captured in the application layer. Businesses that developed the underlying technology, such as Cisco and Nortel, made their share of profits, but almost all the major commercial successes of the internet era were applications of the technology.
One interpretation is that investing in the model development layer is easier. Canada already has AI research centres and businesses that will be glad recipients of the investment. Conversely, the application layer is relatively nascent and thus still devoid of big players. Ironically, this is also why the application layer is the more attractive proposition.
To ensure that we don’t repeat past mistakes, Canada needs to build our country’s absorptive capacity for AI technologies. This starts with investments in mass AI literacy.