The rise of Asia as a technological powerhouse and source of growing investment capital underscores the importance of the region to Canada’s high-tech businesses and overall economic growth, says a new study released this month.

The Asia Pacific Foundation of Canada’s 2019 National Opinion Poll: Canadian Views on High-tech Investment from Asia, surveyed Canadians on their attitudes toward Asian investment in Canada’s high-tech sector.

In its findings, the 2019 survey highlights the driving forces of an overall skepticism, particularly where Chinese investment and the telecommunications sector are concerned, as well as room and opportunities for further engagement with Asia in this critical sector.

“Our 2019 National Opinion Poll on Canadian views on Asian investment in Canada’s high-tech sector clearly demonstrates that Canadians acknowledge and understand the pivotal role Asia will play in global innovation and advancement, but also highlights areas and issues of concern to Canadians that will demand further public policy considerations,” said APF Canada President and CEO, Stewart Beck.

“Given the federal government’s investment in the Canada Innovation Superclusters Initiative and other innovation policy issues, as well as the ongoing U.S.-China trade tensions and their ongoing implications for Canada, it is important that we are able to gauge Canadian’s thoughts on Asian investment in our high-tech sectors.”

The Asia Pacific Foundation of Canada (APF Canada) has been a leader in research and analysis on Canada’s relations with Asia for more than three decades.

10 key takeaways from the poll:

Canadians have an optimistic outlook of Asia as a future forerunner and source of capital in innovation and technology. Seven in 10 Canadians believe Asia will be driving global innovation and technological advancement in 10 years, and 66% think that Asia will outperform the United States to become a more important source of capital in Canada’s high-tech sector over that same period. Half of Canadians also see the high-tech sector as a key driver of the Canadian economy.

This optimistic outlook does not translate into favourable views of Asian FDI in Canada’s high-tech sector. Over half of Canadians disagree that the potential benefits of having more high-tech-oriented Asian investment in Canada outweigh the potential risks.

A slim majority (56%) would also oppose having more FDI from Asian economies enter the high-tech sector, although the opposition is weaker for high-tech compared with strong opposition (over 65%) for both the financial services and non-renewable energy sectors.

Canadians tend to perceive “too much” as opposed to “too little” high-tech FDI from China, India, and the U.S. A significantly higher percentage of people believe that Canada is allowing in too much investment from these three countries compared to those who think the government is allowing in too little. For Australia, the European Union, the United Kingdom, and Japan, meanwhile, Canadians are more likely to perceive too little than too much investment into Canada.

Canadians are more open to Asian FDI in the digital media, cleantech, and life science sectors than in information and communication technology (ICT) and artificial intelligence (AI). The subsector receiving investment is an important factor in public attitudes toward high-tech investment from China and India. Support for Chinese investment drops from 34% in digital media to 16% and 15% in AI and ICT, respectively, while India’s support rate drops from 42% in digital media to 28% in AI. Support for hightech investment from Japan and Australia, meanwhile, remains high for all subsectors.

Joint ventures with Canadian firms and funding high-tech research and education programs are the most welcomed modes of Asian investment in Canada’s high-tech sector. Japan, India, and China all receive strong support for investment through these channels, ranging from 43% support for China to 67% support for Japan. In contrast, greenfield and brownfield investments are much less welcomed.

Among selected factors on public attitudes toward high-tech FDI, the most influential ones are country of origin, subsector, and access to information addressing public concerns. Statistical modelling shows that “China” and “telecommunications” are driving the skepticism around FDI in the high-tech sector. Public information addressing concerns around national security and economic benefits of an investment is conducive to significant mitigation of that skepticism. Mode of investment (greenfield versus brownfield) and ownership structure (state-owned versus privately owned), although also important factors, carry less weight in shaping public opinion.

Canadians associate different benefits and risks with high-tech FDI from China, Japan, India, and the U.S. Job creation is one of the top benefits associated with receiving investment from these four countries. Other top benefits include access to capital (China, U.S.), access to foreign markets (China, India), access to high-tech talent (Japan, India), and know-how transfer into Canada (Japan, U.S.). Concerns around Chinese investment are all security-related – i.e. national security, cyber security, and intellectual property infringement. People also associate “risks to cyber security” with Indian investment and “foreign influences on Canadian values” with U.S. investment. Japanese, Indian, and U.S. investment is also associated with increased foreign competition (Japan, India) and the transfer of high-tech talent (Japan, U.S.) or know-how (Japan, India) outside Canada.

There is public trust in Canadian regulations related to data and privacy protection, but a lack of confidence in the government’s risk-benefit assessment of foreign investments. Half of Canadians think Canada has strong regulations to protect individuals’ data and privacy. But over half (54%) are not confident that the government performs a balanced review of the risks and benefits of prospective investment projects, and the vast majority (81%) desire a more open and transparent national security review process.

Canadians would support a proactive government in shaping global norms on technology use and deepening engagement with Asia in the high-tech sphere through research and education. The vast majority (87%) of Canadians would like to see the government play a proactive role in “shaping a global norm on responsible and accountable use of advanced technologies.” Meanwhile, the public would welcome public policies to support Canada-Asia partnerships/collaboration on innovation research (71%) and to encourage Asian investment into high-tech start-ups (53%).

There is a regional divide in public opinion on Asian FDI in the high-tech sector, with Quebec being the most positive and British Columbia the most negative.  Quebecers hold more positive attitudes toward Asian high-tech investment across a number of metrics – they are the most supportive of having more Asian investment in the high-tech sector, less likely to see “too much” high-tech investment from China, and less likely to oppose relieving restrictions on high-tech FDI. In contrast, British Columbians show the strongest skepticism toward high-tech-oriented FDI from Asia, with the most skeptical view of potential benefits of Asian investment and the strongest opposition to relaxing restrictions on high-tech FDI.