The Growth of Information Technology Enabled Services in Canada

Transcription

1 The Growth of Information Technology Enabled Services in Canada Richard Shearmur, INRS-Urbanisation, Culture et Société 3465 Durocher Montréal H2X 2C6 richard.shearmur@inrs-ucs.uquebec.ca Prepared for Emergence Canada Project February 2004

2 Table of contents Introduction 4 1. Data sources and definitions Methodology Presentation and word of caution about the maps 9 2. Total ITES employment Total sales and service jobs in selected sectors Total administrative and technical jobs in selected sectors Detailed analysis of selected sectors Sales and service jobs in computer services Administrative and technical jobs in computer services Sales and service jobs in telecommunication services Administrative and technical jobs in telecommunication services Sales and service jobs in banks and finance Administrative and technical jobs in banks and finance Sales and service jobs in broking and investment advice Administrative and technical jobs in broking and investment advice Sales and service jobs in insurance Administrative and technical jobs in insurance Sales and service jobs in insurance and real estate broking Administrative and technical in insurance and real estate broking Sales and service jobs in other business services Administrative and technical in other business services Sales and service jobs in other personal services Administrative and technical other personal services Conclusions Important provisos Do jobs appear to be relocating under the influence of IT? Where have ITES jobs grown? Closing comments 63 Annex 1: Underlying geographic units Annex 2: Occupational categories Annex 3: Economic sectors 1

3 Figures and tables Fig1: Total sales and service jobs in selected sectors relative growth 11 Fig2: Absolute sales and service job growth in selected sectors absolute growth 11 Fig3: Total administrative and technical jobs in selected sectors relative growth 14 Fig4: Total administrative and technical jobs in selected sectors absolute growth 14 Fig5: Sales and service jobs in computer services relative growth 17 Fig6: Sales and service jobs in computer services absolute growth 17 Fig7: Admin. and technical jobs in computer services relative growth 20 Fig8: Admin. and technical in computer services absolute growth 20 Fig9: Sales and service jobs in telecommunications relative growth 23 Fig10: Sales and service jobs in telecommunications absolute growth 23 Fig11: Admin. and technical jobs in telecommunications relative growth 25 Fig12: Admin. and technical jobs in telecommunications absolute growth 26 Fig13: Sales and service jobs in banks and finance relative growth 28 Fig14: Sales and service jobs in banks and finance absolute growth 28 Fig15: Admin. and technical jobs in banks and finance relative growth 31 Fig16: Admin. and technical jobs in banks and finance absolute growth 31 Fig17: Sales and service jobs in brokers and investment advice relative growth 33 Fig18: Sales and service jobs in brokers and investment advice absolute growth 33 Fig19: Admin. and technical jobs in brokers and invest. advice relative growth 35 Fig20: Admin. and technical jobs in brokers and invest. advice absolute growth 35 Fig21: Sales and service jobs in insurance relative growth 38 Fig22: Sales and service jobs in insurance absolute growth 38 Fig23: Admin. and technical jobs in insurance relative growth 41 Fig24: Admin. and technical jobs in insurance absolute growth 41 Fig25: Sales and service jobs insurance and real estate broking relative growth 43 Fig26: Sales and service jobs insurance and real estate broking absolute growth 43 Fig27: Admin. and tech. jobs insurance and real estate broking relative growth 45 Fig28: Admin. and tech. jobs insurance and real estate broking absolute growth 45 Fig29: Sales and service jobs in other business services relative growth 47 Fig30: Sales and service jobs in other business services absolute growth 47 Fig31: Admin. and technical jobs in other business services relative growth 50 Fig32: Admin. and technical jobs in other business services absolute growth 50 Fig33: Sales and service jobs in other personal services relative growth 53 Fig34: Sales and service jobs in other personal services absolute growth 53 Fig35: Admin. and technical jobs other personal services relative growth 56 Fig36: Admin. and technical jobs in other personal services absolute growth 56 Fig37: Growth of different types of jobs, Canada, Table 1: Estimation of degree to which each type of job may be subject to IT 60 related location changes Table 2: Observed patterns of job growth over

4 Maps Map 1: Sales and service jobs in selected sectors, Map 2: Administrative and technical jobs in selected sectors, Map 3: Sales and service jobs in computer services, Map 4: Administrative and technical jobs in computer services, Map 5: Sales and service jobs in telecommunications, Map 6: Administrative and technical jobs in telecommunications, Map 7: Sales and service jobs in banks and finance, Map 8: Administrative and technical jobs in banks and finance, Map 9: Sales and service jobs in brokers and investment advice, Map 10: Administrative and tech. jobs in brokers and invest. advice, Map 11: Sales and service jobs in insurance, Map 12: Administrative and technical jobs in insurance, Map 13: Sales and service jobs in insurance and property broking, Map 14: Administrative and tech. jobs in insur. and property broking, Map 15: Sales and service jobs in other business services, Map 16: Administrative and technical jobs in other business services Map 17: Sales and service jobs in other personal services, Map 18: Administrative and technical jobs in other personal services,

5 The Growth of Information Technology Enabled Services in Canada, Introduction This report has been prepared in the context of the Canadian Emergence project, further to a group meeting in Vancouver in September The purpose of the report is limited and quite specific: to identify locations in Canada where ITES employment may have recently grown. This information can serve as contextual information for more specific and detailed studies on telework, outsourcing and other aspects of ITES. In keeping with this limited mandate, the report is brief and factual. It consists of a series of tables and maps which serve to identify the type of area where ITES services have grown. As will be made clear, the location of the vast majority of these jobs is not in doubt: they are located in Canada s largest metropolitan areas. For that reason it is hardly necessary to discuss the location of the principal concentrations of these jobs, nor, indeed, the location of the largest growth concentrations in absolute terms. However, call centres, answering services and other IT enabled outsourcing activities are considered to be quite footloose: they can potentially locate anywhere that a workforce and a decent telephone and internet connection can be found. There is no a priori reason why they should concentrate spatially. For that reason, the focus of this report is not on areas in which large numbers of jobs have been created, but rather on areas where small, but significant, numbers of jobs have been created. In general, we have considered that the creation, over 5 years, of 25 jobs or more is significant but the level has been adjusted sector by sector in order to account for different sector sizes. Given the approximate nature of our figures (they are rounded off to + / - 5 jobs), a 25 job increase signifies that at least 15 new jobs have been created, and at most 35. The rounding off is such that, in fact, the apparent creation of 25 jobs signifies in most cases the actual creation of between 20 to 30 new jobs. 4

6 The report is organized as follows. In the first section, data sources are described, basic definitions are given, and the limits of the study are more fully described. In the second section, a general analysis of all ITES jobs (as defined in the report), is performed. The third section consists of detailed sector by sector analyses. All these analyses are straightforward and based upon simple tabulations and the mapping of employment growth: their aim is to document the spatial distribution of recent employment growth in these sectors with a minimum of interpretation. To conclude, general patterns, if any, will be discussed. 1- Data sources and definitions The initial aim of the report was to document the location of new telework (specifically call centre) jobs in Canada. However, such jobs are very difficult to define statistically for the following reasons: - they can be found in many different economic sectors: an economic sector is defined by a company s principal output. For each output a vast array of different functions is required, and the sales or service department which may or may not be handled by an answering service is just one of them. A sectoral classification (in Canada that would be SIC up to 1996, and NAICS 2 since 1997) is inappropriate for identifying answering service type jobs. - These jobs can be performed by people in a variety of occupational categories: there is no such thing, in the Canadian Standard Occupational Classifications (SOC), as providing advice over the telephone, or selling over the telephone. Advice, sales and support services can all be performed as a teleservice, but all can also be performed on location. In most cases a given occupation is divided between direct, face-to-face, jobs and remote telemediated jobs. 1 SIC : Standard Industrial Classification 2 NAICS : North American Industrial Classification 5

7 - Survey information on these jobs, and information from a variety of professional or industry organizations, is available. This information can sometimes be specific to outsourced telemediated work, but is often not comprehensive. It does not cover all economic sectors, it does not cover all of space, and relies on the co-operation of employers or employees. This information can be very useful from a qualitative perspective, or from the perspective of a specific sector (for example outsourced work in telecommunications industries can be tracked from union and industry sources). However, if the question is where, in Canada, can outsourced telework establishments be found, then a comprehensive data source is required. The approach adopted in this report has been to study jobs which could potentially be outsourced. We have studied jobs which, in our opinion, could become Information Technology Enabled Services (ITES). Whether or not the jobs identified are ITES is unknown, but if there has been growth of this type of job in remote or unlikely locations, then it would be worth investigating them in more detail, particularly in the locations identified. To identify these jobs we have used census data for 1971, 1981, 1991, 1996 and These data are classified by economic sector and by occupation (see annex for the definitions of the sectors and occupations used). By crossing occupations with economic sectors, we feel that we have been able to arrive at a series of jobs which, it is reasonable to assume, can potentially be relocated and performed at a distance from remote centres. Some economic sectors have been selected because they have traditionally outsourced back-office work (such as banks and insurance). Others have been retained because they are part of the new economy (telecommunications, computer services) and because sales or service are often provided by telephone or on-line. The sectors chosen for analysis are as follows (see annex 3 for definitions): a) Banks 6

8 b) Brokers and investment companies c) Insurance d) Insurance and property agents e) Computer services f) Telecommunications services g) Other business services h) Other services Note that a manufacturing sector (business machines) was initially considered, but has not been included because extremely little employment whether service or scientific is located outside the major metropolitan areas and surrounding towns. The two other services categories have been included to capture growth in new service sectors which may not fit into the traditional sectoral classifications. Within these sectors, only certain types of employment have been analysed. We have identified two broad occupational classes which may potentially be subjected to telemediated outsourcing (see annex 2 for definitions): - Clerical and sales occupations. We consider this type of occupation to be the most likely candidate for outsourcing. - Administrative, Scientific and technical occupations: We do not consider that, for the time being, these jobs will be outsourced en masse. If they are, they will probably still locate within or close to metropolitan centres, where qualified labour is most abundant. However, we have also analysed these jobs. 1.1 Methodology This report focuses only on employment growth. This focus, particularly over the last period, serves to further distinguish between traditional jobs and telemediated ones, since the latter type has grown very fast over the 1996 to 2001 period. A study of the static location of these jobs would reveal spatial patterns essentially connected with the geographical spread of the sectors 7

9 analysed, and would reflect in large part the patterns identified in Polèse & Shearmur (2002) for service and high-tech employment in Canada. In other words, the jobs described above all tend to be located in or near large metropolitan areas (those with 500,000 or more inhabitants Toronto, Montreal, Vancouver, Ottawa, Calgary, Edmonton, Winnipeg, Quebec), and, to a lesser extent, in the larger regional centres (such as Halifax or Regina). To analyse the growth patterns of the selected employment categories, three types of results will be presented: i - The growth of these jobs, presented as an index since 1971, in 5 categories of regions: a). Major metropolitan areas (the 8 Census Metropolitan Areas listed above); b). Central agglomerations: census agglomerations of between and people located within about an hour s drive of an ; c). Central rural areas: rural areas located within about an hour s drive of an. d). Peripheral agglomerations: census agglomerations of between and people located over an hour s drive from an. e). Peripheral rural areas: rural areas located over an hour s drive from an. ii - The absolute growth of these jobs, over three periods (1971 to 1981, 1981 to 1991, 1996 to 2001), divided between the 5 categories described above. iii - Maps of the 1996 to 2001 which pinpoint all areas in Canada where over 25 or so such jobs have been created. It should be noted that the 1991 to 1996 period cannot be analysed because the 1996 and 2001 occupations are classified according to the 1991 SOC, whereas the 1971 to 1991 occupations are classified according to the 1970 SOC. This 8

10 change in classification is so complete that it is impossible to recreate the 1970 categories from the 1991 classification. For this reason we present series which run from 1971 to 1991, then from 1996 to Despite the shift from SIC 1980 (for the 1971 to 1996 data) to NAICS 1997 (for the 2001 data) for the classification of sectors, the 1996 to 2001 sectors are comparable: although not absolutely precise, it has been possible for us to reconstitute comparable sectors linking our 1996 data to the 2001 data. 1.2 Presentation and word of caution about the maps The figures and maps are integrated into this report. They are best viewed on screen, since they can then be blown up and framed according to the wishes of the user. A word of caution is necessary regarding the maps: the maps can be misleading since THERE IS NO CONNECTION BETWEEN THE AREA OF A SPATIAL UNIT AND THE NUMBER OF JOBS WHICH ARE THERE. Since the first visual impression given by the maps is principally derived from the colours of the more extensive rural areas, care must be taken when interpreting the maps. The spatial units on the maps are of two types: - Urban areas: although these concentrate most population and employment, they appear small on the maps. In remoter areas it is sometimes necessary to magnify the map to even see some of the smaller urban areas. The limits of these areas are based upon the 1991 census boundaries of Census Agglomerations (CAs) and Census Metropolitan Areas (CMAs). The 12 Census Subdivisions which had over inhabitants in 1991 are also included as urban areas. - Rural areas: these areas are very large, particularly as one moves north. They are based upon the 1991 Census Divisions (CDs), of which there were 290 in Canada in However the CDs have been modified as follows in order to ensure that there is no double counting: 9

11 o Data for urban areas have been subtracted from data for the CDs within which the urban areas are located. o In cases where an urban area overlaps two or more CDs, the CDs have first been aggregated to form a larger area which totally includes the urban area. Data for the urban area has been subtracted from data for the larger area. 2. Total ITES employment ITES employment is considered to be sales and service occupations within the eight sectors identified. However figures for administrative and technical occupations within these sectors are also presented for comparative purposes. Their presentation also serves to pick up trends which may be affecting these more highly qualified but potentially outsourceable jobs. The next section presents figures for sales and service occupations within the selected sectors. The section after that presents the same information for administrative and technical occupations. 10

12 2.1 Total sales and service jobs in selected sectors sales-service (4, 5) 2,20 Figure 1: Sales and service jobs in selected sectors Relative growth 2,00 1,80 1,60 1,40 x1,5 1,20 1, sales-service (4, 5) Figure 2: Sales & Service job growth in selected sectors absolute growth absolute change 11

13 Between 1971 and 1991 there was a marked tendency for ITES (sales and service) jobs to grow fastest in central areas, both rural and urban (Figure 1). Although fast growth occurred everywhere as the Canadian economy restructured (with stagnation and decline in primary and manufacturing sectors, and growth in most service sectors), the slowest growth occurred in peripheral cities and rural areas. The trend changes over the 1996 to 2001 period. Over this period, fastest growth in ITES jobs happened in rural peripheral areas, those areas beyond an hour s drive from a major metropolitan area and with fewer than inhabitants. Peripheral urban areas grew almost as fast. Major metropolitan areas themselves also witnessed fast growth in these jobs. It is rural and urban areas located within easy reach of major metropolitan areas which fared the worst whilst still growing. This result is compatible with the idea that some ITES jobs are moving away from the largest cities towards rural or remote locations which are not within east physical reach of major markets. However, it also underscores the continued location of this type of job within metropolitan areas themselves. Figure 2 gives an idea of the scale of this job growth. In the 1970 s and 1980 s, job growth was very strong in absolute terms mirroring in part the strong overall job growth over these decades, and in part the even stronger growth in service sectors. In the late 1990 s, the strongest absolute growth is registered in metropolitan areas, followed by peripheral cities, and peripheral rural areas. The fact that relative and absolute growth is stronger in peripheral regions than in comparable central regions for ITES jobs is significant, because overall trends (as documented in Polèse & Shearmur, 2002, and updated in recent unpublished work) show that employment is stagnating or declining in peripheral areas. Thus this type of job is not behaving in the same way as overall employment. The job-growth map highlights in red all areas which have benefited from over 500 net new ITES jobs (sales and service), and in yellow those which have witnessed an increase of over

14 Map1: Sales and sales jobs selected sectors, It is evident that high absolute levels of growth are to be found in most large cities, but also in a number of small peripheral ones such as Thunder Bay, Sault Ste.Marie, St.John s (Nfld), and Moncton. New Brunswick in particular has benefited from fast growth in these jobs, in Moncton, but also in St.John and in its more rural parts. Four other growth concentrations can be noted outside of major metropolitan areas and their immediate vicinity. These are: a) Northern Ontario, in particular between Sudbury and Sault Ste.Marie. b) Southern Alberta, together with regions stretching up to and beyond Edmonton. c) The Eastern townships to the East of Montreal. d) Nova Scotia, including, but not limited to, Halifax. In particular growth of over 500 jobs is recorded in Sydney (Cape Breton Island). 13

15 2.2 Total administrative and technical jobs in selected sectors 8,00 Admin + tech. Figure 3: Administrative and Technical jobs in selected sectors, relative growth 7,00 6,00 5,00 4,00 x4 3,00 2,00 1, Admin + tech. Figure 4: Administrative and Scientific jobs in selected sectors Absolute growth absolute change 14

16 In general administrative and scientific jobs tend to grow fastest in central urban and rural areas whatever the period considered (figure 3). Over the 1970 to 1990 period, this type of job grew fastest in rural areas close to major metropolitan areas. The second fastest growth is recorded in urban areas close to metropolitan areas. Over the 1996 to 2001 period, the only major change is the faster growth recorded in peripheral urban areas: this could be due to the relocation of jobs there, but may also be due to the catching of these areas. In absolute terms, it is evident that most new jobs are held by people who reside within metropolitan areas, and within the rural and urban areas directly surrounding metropolitan areas (figure 4). Map 2: Administrative and technical jobs in selected sectors, Significant absolute growth of administrative and scientific occupations within the selected sectors occurs strictly within and immediately around the largest metropolitan areas, and within a limited number of peripheral urban areas such as Victoria, St.John (NB),Moncton (NB), Sakatoon and Regina. 15

17 3. Detailed analysis of selected sectors Eight economic sectors have been analysed, and the results will be presented in a manner identical to those presented above. In this way the spatial distribution of new ITES jobs can be compared across all sectors. Brief comments will be made for each sector, and overall remarks will be made in a concluding section to this part. 16

18 3.1 Sales and service jobs in computer services sales-service (4, 5) 31,00 Figure 5: Sales and service jobs in computer services relative growth 26,00 21,00 16,00 11,00 x10 6,00 1, sales-service (4, 5) Figure 6: Sales and Service jobs in computer services relative growth absolute change 17

19 Employment in this sector has grown exceptionally fast over the three decades under study. Within the sales and service occupations, employment in central urban areas grew nearly 28 times between 1971 and 1991 though this fast growth is attributable both to the sector s dynamism and to the very small job totals in 1971 (figure 5). Fastest growth occurred outside of metropolitan areas, but was particularly concentrated in urban areas (central and peripheral). However, between 1996 and 2001, it is peripheral rural areas which have experienced the fastest growth rates, followed by central rural areas. There appears, therefore, to have been a marked shift away from growth in urban areas (though, of course, growth still occurred there) towards growth in total areas. This can possibly be explained by outsourcing, but also by the fact that many computer professionals may be taking advantage of the possibility to work from home or to commute less frequently but from further away: the data we have are for place of residence. However, the fast growth in this sector within peripheral urban areas (faster than in central and metropolitan areas) is compatible with larger numbers of jobs being located there to service more distant clients. In any case, there does seem to be a recent shift in sales and service job growth in the computer services sector towards more remote locations, rural (cental and peripheral) and urban peripheral. This statement must be relativised: when absolute growth numbers are considered (figure 6) it can be seen that metropolitan areas still dominate job growth, though in a manner fare less marked in the late 1990s than in earlier periods. Indeed, absolute growth in peripheral urban areas is second only to that in metropolitan areas over the latest period. Map 3 represents in red all areas where at least 25 new jobs have been created in the computer services sales and service sector. It can be seen that such jobs clusters of new jobs tend to be in and around metropolitan areas. However, Edmonton and Ottawa stand out as being surrounded by a considerable number of areas which have benefited from new jobs in the ITES jobs in the sector. Certain areas in the BC interior also benefit from clusters of new jobs in the 18

20 sector. In Eastern Canada Moncton, the Acadian peninsula and the area around Fredericton stand out, as do some communities in Québec such as Sept-Iles and Rouyn-Noranda. Map 3 : Sales and service jobs in computer services, It must be borne in mind that such a map can only provide evidence of where jobs were created within the limits of the units analysed. There is nothing that enables us to say whether these new jobs were created in one location, or spread out across the territory covered by the geographic unit (see appendix for map of the units analysed). That being said, this does give an idea of where not to look for job growth in this type of occupation and sector and by extension does point to certain areas which seem to have attracted a considerable number of jobs. 19

21 3.2 Administrative and technical jobs in computer services Admin + tech. 181,00 161,00 Figure 7: Administrative and technical jobs in computer services Relative growth 141,00 121,00 101,00 81,00 61,00 41,00 x50 21,00 1, Admin + tech. Figure 8: Administrative and scientific jobs in computer services Absolute growth absolute change 20

22 Figure 7 seems to suggest that administrative and scientific jobs have been growing faster in peripheral regions (both urban and rural) since the mid 1990 s. This is a reversal of the trend observed between 1971 and 1991, when fastest job growth occurred in central urban and peripheral areas. Although this interpretation is quite correct, these growth rates need to be understood in the context of the absolute numbers involved (figure 8): the mass of administrative and scientific jobs located in metropolitan areas is such that notwithstanding the slower growth rates there, metropolitan areas completely dominate job creation in this field. Map 4: Administrative and technical jobs in computer services, However, it can be seen (from figures 5 and 7) that whereas only about sales and service jobs were created in this sector between 1996 and 2001, over administrative and scientific ones were. Thus, in absolute terms, far more administrative and scientific jobs in this sector were created in remote 21

23 regions than sales and service jobs, even if, relatively speaking, it is sales and service jobs which seem to be more attracted to peripheral regions. Because of the very high numbers of new jobs created, the threshold for identifying areas of significant job growth has been raised to 75 in Map 4 (from 25 for sales and service jobs). Given this threshold, two areas emerge: the Montreal to Windsor corridor, and the Calgary to Edmonton area. In these regions the growth of administrative and scientific jobs in computer services has been geographically extensive. In most other areas, growth is confined to cities and urban areas, with little growth in non-urban areas. 22

24 3.3 Sales and service jobs in telecommunication services sales-service (4, 5) Figure 9: Sales and service jobs in telecommunication services Relative growth 1,80 1,60 1,40 1,20 1,00 0,80 0,60 0,40 0,20 0, sales-service (4, 5) Figure 10: Sales and service jobs in telecommunication services Absolute growth absolute change 23

25 Figures 9 and 10 show that there has been employment loss in sales and service jobs in this sector between 1996 and Losses were already evident in peripheral areas in the 1980s, in particular in peripheral rural areas. Only metropolitan areas manage to approximately retain their sales and service workforce in the field. This result may be due to restructuring within the sector (e.g. a shift from sales and service jobs towards more technical jobs), to outsourcing from this sector to another, or to job losses due to the move abroad of certain jobs in the sector. Map 5: Sales and service jobs in telecommunication services, Very few new sales and service jobs in this sector have located away from metropolitan areas: areas of significant (over 25 jobs) growth can be found scattered around Toronto, in and around Ottawa and Montreal, and in and around Calgary and Vancouver. Edmundston (NB), St.John s (Nfld), Val d Or (Qc) and a rural area to the south west of Winnipeg stand out as being the only 24

26 areas located away from major metropolitan areas that have benefited from over 25 new jobs in the telecommunications (sales and service) sector. 3.4 Administrative and technical jobs in telecommunications services Adminsitrativge and technical jobs in telecommunications services have grown fastest in central areas within about an hour s drive of major metropolitan areas (figure 10). However, over the latest period ( ), metropolitan areas have witnessed the highest rates of growth, followed closely by central urban areas. Over all periods peripheral areas fare poorly. This is emphasized when absolute employment growth is considered: over the 1996 to 2001 period, metropolitan areas produced nearly 9000 net new jobs in this category: this should be contrasted with the job losses recorded for sales and service jobs. Admin + tech. Figure 11: Administrative and technical jobs in telecommunication services - Relative growth 3,70 3,20 2,70 2,20 1,70 1,20 0,

27 Admin + tech. Figure 12: Administrative and technical jobs in telecommunication services Absolute change absolute change Not surprisingly in the light of these figures, Map 6 shows that most areas where significant employment gains have been recorded over the period are metropolitan areas, and the largest peripheral urban areas such as Regina, Saskatoon and Halifax. The only areas which do not fit this pattern can be found in New Brunswick (Moncton and St.John), Nova Scotia (Kings County), Rimouski (Quebec) and Newfoundland (Corner Brook): in these areas, at least 25 administrative or technical jobs have been created in the telecommunications sector. 26

28 Map 6: Administrative and technical jobs in telecommunications,

29 3.5 Sales and service jobs in banking and finance sales-service (4, 5) Figure 13: Sales and service jobs in banks and finance Relative growth 2,20 x2 2,00 1,80 1,60 1,40 1,20 1, sales-service (4, 5) Figure 14: Sales and service jobs in banks and finance, absolute change absolute change 28

30 Sales and service employment growth in this sector was very rapid in the 1970s. It slowed considerably in the 1980s, except in central urban and rural areas. The early nineties saw large scale job losses in the sector (not illustrated here), but these losses continued into the late 1990s: all types geographic area seen to have been hit in a similar way. Map 7: Sales and service jobs in banks and finance, From Map 7, though, it can be seen that notwithstanding the overall job losses in the sector between 1996 and 2001, some regions have nevertheless seen significant (over 25 jobs) job growth. Many of these areas are in peripheral locations such as northern Vancouver island, northern BC, rural Manitoba, Northern Ontario, the area around Amos (QC) and Northern Nova Scotia Moncton and Fredericton also stand out. Another category of area which has seen significant job growth (despite the overall losses) is areas surrounding 29

31 Toronto and Montreal. Although very few such areas have seen job growth in this sector and occupation, a few can be picked out on the map. Overall these patterns are consistent with the interpretation that the banking sector has been undergoing a period of rationalization: sales and service jobs have been cut back, but certain new jobs have been created in remote areas. One explanation may be that these are call centre jobs destined to serve clients in a more efficient way from cheaper locations. 30

32 3.6 Administrative and technical jobs in banking and finance Admin + tech. Figure 15: Administrative and technical jobs in banks & finance relative growth 12,00 10,00 8,00 6,00 4,00 x5 2,00 0, Admin + tech. Figure 16: Administrative and technical jobs in banks and Finance, absolute growth absolute change 31

33 During the 1970s and 1980s job growth was fastest in central areas, particularly in urban ones (figure 15). In the late nineties, though, it is peripheral urban areas which have seen the most rapid growth in administrative and technical banking jobs. In absolute terms, major metropolitan areas dominate job creation in this sector. Map 8: Administrative and technical jobs in banks and finance, Very few regions outside the immediate vicinity of Toronto and Montreal (except for other major metropolitan areas and large peripheral urban areas) have had significant job growth in the sector and occupation. The exception are a few areas around Saskatoon and Regina. 32

34 3.7 Sales and service jobs in broking and investment advice sales-service (4, 5) Figure 17: Sales and service jobs in broking and investment advice relative growth 2,40 2,20 2,00 1,80 1,60 1,40 1,20 1, sales-service (4, 5) Figure 18: Sales and service jobs in broking and investment advice absolute change absolute change 33

35 Employment growth in sales and service jobs in this sector was very rapid in rural areas, both central and peripheral, throughout the 1970s and 1980s (figure 17). In central urban areas, growth was rapid in the 1980s. In the late 1990s, fast growth is observed in all types of region, especially in central rural areas and in non metropolitan urban areas, both central and peripheral. Map 9: Sales and service jobs in investment broking and advice, Significant employment gains are observed, over the 1996 to 2001 period, in most major metropolitan areas, and in the regions surrounding them. This is especially evident around Quebec, Montreal, Ottawa and Toronto. A few areas in Northern Ontario, notably Sudbury, also emerge, as do Victoria, Moncton, Halifax, Saskatoon and Regina. 34

36 3.8 Administrative and technical jobs in broking and investment advice Admin + tech. Figure 19: Administrative and technical jobs in brokers and investment advice, relative growth 12,00 10,00 8,00 6,00 4,00 2,00 0, Admin + tech. Figure 20: Administrative and technical jobs in broking and investment advice - absolute growth absolute change 35

37 Although growth rates have been fast in peripheral rural area, this can largely be explained by the very small initial number of administrative and technical jobs in broking and investment advice to be found in there (figure 19): in the 1970 s, peripheral areas performed better than central areas in absolute terms, but only 200 jobs were created in these areas across all of Canada (figure 20). It is only in the late 1990 s that job growth in this occupation and in this sector took off, with 4000 jobs created in major metropolitan areas. Map 10: Admin. and tech. jobs in investment broking and advice,

38 From map 10 it can be seen that significant job growth in this occupation and sector is exclusively the preserve of major metropolitan areas and the largest non-metropolitan cities. 37

39 3.9 Sales and service work in the insurance sector sales-service (4, 5) Figure 21: Sales and service jobs in insurance, relative growth 4,50 4,00 3,50 3,00 2,50 2,00 x2 1,50 1,00 0, sales-service (4, 5) Figure 22: Sales and service jobs in insurance, absolute growth absolute change 38

40 Sales and service employment in the insurance industry has been growing rapidly in relative (figure 21) and in absolute (figure 22) terms. For all periods under study it is rural areas, central and peripheral, that have been growing fastest, followed by urban areas, peripheral and central. Sales and service employment in metropolitan areas has been growing, but at a consistently slower rate. Map 11: Sales and service jobs in insurance, Despite the higher threshold of 75 jobs, map 11 illustrates the geographic spread of significant employment growth in this sector and occupation in the late 1990s. Two concentrations of employment growth stand out: Alberta (around Calgary and stretching eastwards to Saskatoon and Regina; and north of Edmonton), and the Montreal to Windsor corridor. Other areas also emerge: - British Columbia (Vancouver Island: Victoria, Nanamio, and an area to the north. Kelowna and surrounding area). 39

41 - Thunder Bay - The Eastern townships - Atlantic Canadian cities of Moncton, Halifax, St.John and St.John s. This geographic pattern suggests the dispersal of back office functions to regions just outside the major metropolitan areas, but also a further flung dispersal which is consistent with ITES-type work. 40

42 3.10 Administrative and technical work in the insurance sector Admin + tech. Figure 23: Administrative and technical jobs in insurance, relative growth 7,50 6,50 5,50 4,50 3,50 2,50 x5 1,50 0, Admin + tech. Figure 24: Administratyive and technical jobs in insurance, absolute growth absolute change 41

43 Until the 1990 s administrative and technical employment growth in this sector occurred primarily in metropolitan regions and in central and peripheral urban areas (figures 23 and 24). Over the late 1990s, in relative but also in absolute terms, job growth has occurred in central urban areas. Map 12: Administrative and technical jobs in insurance, From map 12 it can be seen that the distribution of significant administrative and technical growth is very different from that of sales and service jobs: these jobs have grown in metropolitan areas themselves, in areas immediately around Toronto, or in a few large non-metropolitan cities. The exceptions are a rural area east of Regina and a rural area south of Quebec city. 42

44 3.11. Sales and service jobs in insurance and real estate broking sales-service (4, 5) Figure 25: Sales and service jobs in insurance and property broking, relative growth 2,50 2,00 x2 1,50 1,00 0,50 0, sales-service (4, 5) Figure 26: Sales and service jobs in insurance and property broking, absolute growth absolute change 43

45 Employment grew at a similar rate in all types of region between 1971 and Between 1996 and 2001, a similar rate of decline is observed in all types of region. Map 13: Sales and Service jobs in Insurance and Real estate broking, There are very regions which have experienced significant sales and service growth within the overall context of decline. The areas which have seen growth are all rural areas and all but one (surrounding Montreal) are in peripheral regions. This is consistent with an industry which is restructuring and which may be seeking to relocate some of its sales and service staff to cheaper remote locations from which telework is possible. 44

46 3.12 Administrative and technical jobs in insurance and property agency Admin + tech. Figure 27: Administrative and technical jobs in insurance and property broking, relative growth 9,00 8,00 7,00 6,00 5,00 4,00 3,00 x5 2,00 1,00 0, Admin + tech. Figure 28: Administrative and technical jobs in insurance and property broking, absolute growth absolute change 45

47 Although figure 27 illustrates different growth rates in the various geographic regions, it should be noted (figure 28) that very few new jobs have been created in these occupations in this sector. The fastest growth rates in the 1970 s and 1980 s were recorded in central urban and peripheral rural areas (figure 27), though absolute growth tended to be concentrated in metropolitan areas. In the late 1990s, however, only non-metropolitan urban areas saw job grow in these occupations, albeit with very small numbers of net new jobs. Map 14: Admin. and tech. jobs in insurance and real estate broking, Very few areas saw significant employment growth in this sector and occupation between 1996 and 2001: a few isolated areas east of Montreal, Quebec city itself, and some areas in and around Toronto. 46

48 3.13 Sales and service jobs in other business services sales-service (4, 5) Figure 29: Sales and service jobs in 'other business services', relative growth 4,00 3,50 3,00 2,50 2,00 1,50 1, sales-service (4, 5) Figure 30: Sales and service jobs in 'other business services' absolute growth absolute change 47

49 This catch-all sector which includes temporary work, security services, and all other non-classified business services is of particular interest, especially over the 1996 to 2001 period. Indeed, if new, difficult to classify business services are emerging, this is where they will be. Over the 1970 s and 1980 s, sales and service jobs in these sectors grew fastest in central and metropolitan areas (figure 29): this is commensurate with growth in business services in general (Polèse & Shearmur, 2002). However, over the late 1990 s this pattern was reversed: extremely fast growth is recorded is peripheral areas, urban and rural (figure 29). In absolute terms, employment growth in peripheral areas is comparable to that in metropolitan areas (figure 30). This is quite remarkable. Map 15: Sales and service jobs in other business services, A significance threshold of 100 jobs has been retained in map 15 in order to make it legible. It can be seen that the geographic distribution of sales and 48

50 service jobs in the other business service sector is extensive. Some of it occurs in the major metropolitan areas, but there are many rural areas and small peripheral cities which also benefit from employment growth of this type. The peripheral areas which stand out are New Brunswick and Nova Scotia, Northern Ontario (North Bay, Sudbury, Thunder Bay, Sault Ste.Marie) and Northern Alberta. These patterns must be interpreted with care since a wide variety of business services may be included in this sector. However, it is only sales and service jobs which are being mapped here: at the very least this pattern suggests that there was a tendency, between 1996 and 2001, for these sales and service jobs to grow in remote peripheral places. Furthermore, this pattern was not evident in the 1970s and 1980s. 49

51 3.14: Administrative and technical jobs in other business services Admin + tech. Figure 32: Administrative and techynical jobs in 'other business services' - relative growth 6,00 5,00 4,00 3,00 2,00 1,00 0, Admin + tech. Figure 32: Administrative and technical jobs in 'other business services' - absolute growth absolute change 50

52 The general patterns observed for sales and services jobs in this sector are replicated, but far less marked, for the administrative and technical occupations: here too faster growth is recorded in central (urban and rural) areas in the 1970s and 1980s, and in the peripheral areas (rural and urban) in the late 1990s. It is only in the 1990s that high absolute job growth is evident in these occupations (figure 32), unlike for the sales and service occupations which grew fast, in absolute terms, over the three periods studied. In the later period, high absolute growth is evident in all types of region, in particular in peripheral ones. Map 16: Administrative and technical jobs in other business services, Notwithstanding the similar general patterns, very different geographic patterns emerge. Although there exist a few peripheral rural areas in which over 100 net new jobs are recorded, in general it can be seen that the administrative and technical jobs tend to be concentrated in urban areas. Only in Alberta and British Columbia does there seem to be significant growth in some rural peripheral 51

53 areas. In Eastern Canada growth is in and around metropolitan areas, but also in smaller peripheral cities such as Charlottetown (PEI), Fredericton, Sydney (NS) and St.John s. Significant growth is also evident in Halifax, Moncton and St.John (NB), as well as Sudbury, Sault Ste.Marie, Thunder Bay, Nanaimo, Victoria, Saskatoon, Regina and Winnipeg. 52

54 3.15 Sales and service jobs in other personal services sales-service (4, 5) Figure 33: Sales and service jobs in 'other personal services' - relative growth 4,50 4,00 3,50 3,00 2,50 2,00 x2 1,50 1, sales-service (4, 5) Figure 43: Sales and service jobs in 'other personal services' - absolute growth absolute change 53

55 This sector resembles other business services to the extent that it is a catch-all sector into which a variety of not otherwise classified personal services are put. It is interesting to study, especially over the last period, for the same reason that other business services is of interest: new, difficult to classify services may well be classified in this sector. Over the entire period studied sales and service jobs in this sector have grown fastest in central and peripheral rural areas. Over the 1996 to 2001 period, the only difference is that central urban areas are growing nearly as fast as the rural ones. Map 17: Sales and service jobs in other personal services, Significant growth of sales and service jobs in other personal services is widespread. To some extent it follows population growth in western Canada, but fast growth is also observed in Atlantic Canada, and across all of southern Ontario and Quebec. In fact, the only areas which do not benefit from any 54

56 significant employment growth are the mid-northern parts of Quebec and Ontario, as well as Manitoba and Southern Saskatchewan. In order to distinguish further, a fourth category has been added to map 17 to highlight growth concentrations of over 250 jobs. A more interesting pattern emerges since it can be seen that certain rural areas of New Brunswick, of Newfoundland (around St.John s) and of Nova Scotia (east of Halifax) emerge, as do the eastern townships (east of Montreal). Thus, some very high concentrations of new sales and service jobs are appearing in areas which are not highly populated: superposed upon the general pattern of personal service job growth (following population and population growth), another pattern emerges which is consistent with concentrations of new sales and service jobs in locations removed from markets. Similar areas also emerge in Alberta and British Columbia, but bearing in mind the link between personal services and population, and the fast population growth in western Canada, these would need to be compared with population growth in the area before commenting on their significance. 55

57 3.16. Administrative and technical jobs in other personal services Admin + tech. Figure 35: Administrative and technical jobs in 'other personal services', relative growth 8,00 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0, Admin + tech. Figure 36: Administrative and technical jobs on 'other personal services' - absolute growth absolute change 56

58 In the 1970s and 1980s employment growth in administrative and technical occupations in the other personal services sector was similar in all types of area except for central rural areas, where it was faster (figure 35). In the late 1990 s, employment grew fastest in central urban areas, it grew slowly in metropolitan and rural central areas, and it declined in all peripheral areas. This decline in peripheral areas is in sharp contrast to the pattern observed for sales and service jobs. Map 18: Admin. and technical jobs in other personal services, Despite the very fast growth in the west of sales and service jobs in other personal services, there is no significant concentration of growth of administrative and technical jobs. Indeed, there is employment decline in this occupation across almost all of the west. The only concentrations of significant growth are in and around Toronto and Montreal, in Kingston, in the eastern townships, in the Kamouraska area of Quebec and in Halifax. 57

59 4. Conclusions 4.1 Important provisos The purpose of this study is limited: to document the geographic spread of employment growth in sectors and occupations which are possibly ITES (Information Technology Enabled Services). The working hypothesis is that if some sectors and occupations are ITES, and if the fact that they are ITES is changing their location pattern, then significant employment growth may be observed away from major urban areas, in particular since Two different occupational groups have been observed: sales and service occupations and administrative and technical. Here, our hypothesis is that it is sales and service occupations which are more likely to be footloose. Thus, if similar patterns are observed fro the two occupational groups, then the likelihood of location change due solely to information Technology is less likely. Finally, the identification of significant job growth is fraught with difficulty. In the context of call centres and remote service centres, it has been assumed that job growth of over 25 jobs may be significant, since it could correspond to employment in a single service centre. This threshold has been modified upwards in cases where very high levels of job growth are observed. Given these provisos, this report can point out sectors and occupations for which the pattern of significant job growth is compatible with the hypothesis that employment is growing in remote or non-standard locations. It should be remembered that the overall trends in Canada are for employment to decline in locations further than about 100km away from major metropolitan areasof over people. Therefore, employment growth in peripheral areas is of particular significance because it is going against general trends. 58

60 4.2 Do jobs appear to be relocating under the influence of IT? There are two ways whereby a job type can be identified as possibly undergoing relocation under the influence of ITES. 1. The first indicator is significant employment growth over the 1996 to 2001 period in remote or peripheral locations. 2. The second is markedly different growth trends (particularly with regards to the contrast between central and peripheral locations) between the first periods ( , ) and the last period ( ). If remoter regions fare relatively better over the last period, this supports the idea of recent job relocation to remoter regions: it is only over the last period that we hypothesise that job relocation may be due to IT. The first criterion is probably more relevant than the second. Bearing this in mind these three criteria, each sector will be classified below. A total of 12 points can be given for the first criterion, 8 for the second. These points are allocated subjectively by the author, and reflect his assessment of the visual and statistical information presented in this report. The readers may wish to assess for themselves the pertinence of the classification and point allocation. Points are allotted as follows: First criterion: More points are allocated if significant job growth is occurring in peripheral areas. Fast job growth in rural areas around metropolitan areas is also significant, but less so. Second criterion: if peripheral areas systematically grew slower than central and metropolitan areas in the first periods, and faster on the last period, then maximum points are given. 59

61 Table 1: Estimation of the degree to which each type of job may be subject to IT related location changes Remote Change over time TOT 12 points 8 points All sectors: Sales and service Administrative and technical Computer services: Sales and service Administrative and technical Telecommunications: Sales and service Administrative and technical Banks and finance: Sales and service Administrative and technical Brokers and investment: Sales and service Administrative and technical Insurance: Sales and service Administrative and technical Insurance and property agents: Sales & service Administrative and technical Other business serv. : Sales and service Administrative and technical Other personal serv. : Sales and service Administrative and technical Table 1 summarises the results of this report. Overall, the spatial behaviour of employment in the sales and service jobs in the selected sector sectors conforms to what one would expect if a strategy of relocation to remoter areas were underway: there is a marked break between the earlier and the later trends (the peripheral regions are growing faster than central ones over the later period). Significant job growth is distributed widely, particularly in remoter areas. This is not the case for administrative and technical jobs in the selected sectors. When one analyses each constituent occupation and sector more closely, one observes that in most sectors it is the sales and service occupations which seem to be relocating under the influence of ITES and not the administrative and technical ones. Only in computer services and other business services do both 60

62 types of job seem to be relocating to remoter areas. The telecommunications and investment broking sectors stand out since neither appears to be relocating to remoter areas. This last result may seem surprising given the growth in call-centre jobs, often in the telecommunications sector. It may be explained by the fact that independent call centre providers are not classified in the telecommunications sector: their clients are in the telecommunications sector, but call centres may be classified as other business services. The exact NAICS and SIC classification of call centres needs to be investigated. The overall conclusion is that the spatial patterns observed are compatible with location decisions based upon the availability of Information Technology: these decisions may be motivated by the search for a low paid workforce and lenient government regulations (particularly relocation in the Maritimes and in Alberta), but also relocation in proximity to large markets and workforces (relocation in rural areas and small towns around large metropolitan areas in particular sales and service jobs in insurance and in other personal services ). Distinguishing between these two different types of relocation a move to very remote locations is different from a move within reach of a large city is important. 4.3 Where have ITES jobs grown? There are three principal patterns that are observed. 1. Job growth in remote areas, including peripheral rural areas. 2. Job growth in and around large cities. 3. Job growth in large cities. It is assumed here that pattern 1 includes patterns 2 and 3, pattern 2 includes pattern 3. Only pattern 3 is exclusive of the other two. 61

63 Table 2: Observed patterns of job growth over Pattern Comments All sectors: Sales and service 1 Alberta, Montreal-Windsor, NB, NS Administrative and technical 2 Computer services: Sales and service 1 Alberta, BC, Montreal-Windsor, NB, NS Administrative and technical 1 Alberta, BC, Montreal-Windsor, NB, NS Telecommunications: Sales and service 2 / 3 Few locations. Note ring of growth around Toronto. Administrative and technical 3 Banks and finance: Sales and service 1 / 2 A few scattered remote locations. Mainly in and around cities. Administrative and technical 2 / 3 Brokers and investment: Sales and service 2 In and around most large cities. Administrative and technical 3 Only in large cities Insurance: Sales and service 1 Alberta, Montreal-Windsor, Nth.Ontario, NB, NS Administrative and technical 3 Only in large cities Insurance and property agents: Sales & service 1 Scattered remote locations Administrative and technical 3 Very few areas of significant growth. Exceptions: Eastern Townships & Trois-Rivières Other business serv. : Sales and service 1 Alberta, NB, NS, Montreal- Ottawa, Sth. Ontario, Nth. Ontario Administrative and technical 3 Mainly in cities. A little spread. Exception: Nth. BC. Other personal serv. : Sales and service 1 Significant growth every-where except Manitoba and mid-nth. Ontario and Quebec. Administrative and technical 3 In cities. Exception: Eastern Townships, around Montreal, around Quebec city. Although each of the 18 growth maps presented in this report illustrates the distribution of employment growth in different sectors and occupations, broad patterns emerge. On the whole the sales and service occupations in all sectors except telecommunications, investment broking and advice, and to some extent banks conforms to the first pattern, that of scattered growth across many different types of area in Canada. In particular, significant areas of growth are found in remote and rural areas. Administrative and technical jobs have tended to grow in and closely around large cities, except in computer services. 62

64 4.4 Closing comments No conclusions can be drawn from this report with regards to the reasons behind the observed spatial patterns of employment growth. To the extent that causal mechanisms have been alluded to, they are by way of hypotheses. However, the spatial behavior of sales and service jobs in particular is different from that observed in total employment. Whereas there is a tendency towards the metropolisation of most jobs, sales and service jobs are growing in remoter and in rural locations. This is occurring in a context of job stagnation in these occupations (table 37) and rapid job growth in the more qualified administrative and service occupations. Figure 37: Growth of different types of jobs, Canada, ,00 2,80 2,60 Sales and service administrative and technical total 2,40 index, 1971 = 1,00 2,20 2,00 1,80 1,60 1,40 1,20 1, Note: Occupations are not strictly comparable between 1991 and These trends are indicative only. It can be hypothesized that sales and service jobs are behaving rather like lower level manufacturing jobs in the 1960s to 1980s. These jobs were priced out of metropolitan and central locations, and either located abroad, or in remoter Canadian areas (often around large cities). Some manufacturing jobs located further a-field in Canada, but that trend has tended to be temporary. Whatever 63

65 the lower costs in peripheral Canada (and when transport, travel costs, and high unionized wages are combined, these lower costs have often proved elusive), costs were lower still in developing nations. The cultural elements of sales and service jobs may mean that the observed relocation to peripheral areas in Canada will be more durable than it has been for manufacturing jobs. 64

66 Annex 1: Underlying geographic units (382) 65

67 Annex 2: Occupational categories No Occupation title Managers, directors and related occupations Natural sciences, engineering, mathematics, Religion, education, health care, arts, recreation Clerical and related activities Retail and services 1971 SOC 1 for 1971, 81 and 91 data G11 G21 et G23 G25, G27, G31 et G33 G41 G51 et G SOC 1 for 1996 and 2001 data A, B0, B1, B3 C, E0, E211, E212, E213 D, E1, E214, E215, E216, F B2, B4, B5 G 6 Agriculture, fishing, forestry, mines, construction, transport G83, G85, G87, G91, G93 et G95 H, I, J 7 non-classified occupations G99 Administrative and technical occupations are occupations 2 and 3: as a rule these occupations require qualifications in the natural or social sciences. Sales and service occupations are occupations 4 and 5: as a rule these jobs do not require particular qualifications. The non-classified group in the 71, 81 and 91 data has been distributed proportionately over categories 1 to 6. The proportions are calculated within each geographic unit. The change from the 1971 to the 1991 Standard Occupational Classification 1 is a fundamental one. It has not been possible to construct comparable occupational classes. 66

68 Annex 3: Economic sectors Computer services: SIC NAICS 1997: 5112, 514, 5415 Telecommunication services: SIC , 483. NAICS 1997: 5133 Banks and finance: SIC , 71, 72. NAICS 1997: 521, 522 Brokers and investment advice: SIC NAICS 1997: 523, 526 Insurance: SIC NAICS 1997: 524 Insurance and property brokers: SIC NAICS 1997: 5242, 5312, 5313 Other business services: SIC , 7792, 7793, 7794, 7795, 7796, NAICS 1997: 533, 5419, 5611, 5612, 5614, 5616, 5619, Other personal services: SIC , 983, 984, 985, 99. NAICS 1997: 5321, 5322, 5323, 5324, 5615, 5617, 8132, 8133, 8139, 814 Although the NAICS and SIC defined sectors are not strictly comparable, care has been taken to define sectors in a similar way by referring to conversion tables and definitions. Furthermore, verifications on our database reveal coherent patterns of growth between 1996 and 2001 for the sectors analysed. Since the NAICS 1997 classification is not a complete overhaul of the previous SIC classification, it is possible to define comparable sectors. Note that this was not possible for occupations, because the 1991 Standard Occupational Classification differed fundamentally from the 1971 one. 67

69 68