have surged. digitalisation has advanced on a massive scale in areas like education and medicine to reduce human interaction and increase resilience. in the united states, only 11 % of consumers used telemedicine in 2019, but that number has increased to 46 % with the pandemic, and 76 % are interested in using it going forward6. this presents a possible future of higher productivity growth, less carbon - intensive lifestyles and more democratised access to essential services. but there is also a transitional challenge. in a more digital, post - pandemic economy, people will still visit shops and consume in - person services, stay in hotels and travel for business or pleasure, but possibly on a smaller scale than before. sectors such as accommodation, food services and transportation could be lastingly affected. in the euro area, these sectors have been responsible for almost one fifth of the jobs created since 2013. so not only do we need to protect old jobs, we also need to create new ones that reflect the new patterns of demand after the pandemic. and since this takes time and may require some adjustment – as we do not yet know exactly where demand will be focused – we need to create the conditions for experimentation and innovation today. the key is to empower young firms. in the united states, new firms represent only 10 % of all firms in a given year but are responsible for almost 30 % of productivity growth7. new firms are also the engine of job growth : on average, firms up to five years old account for only one - fifth of employment, but are responsible for almost half of the jobs created8. firm creation has slowed in europe, however. in italy, for example, there have been 37, 000 fewer failed companies in the first half of this year compared with the same period last year, and 52, 000 fewer companies created. there is no contradiction between continuing to support the economy and encouraging its transformation. for new and innovative firms to grow, they need macroeconomic policies that support demand, because when uncertainty is too high a “ wait - and - see ” attitude stops the most productive firms from expanding9. they also need microeconomic policies that encourage firm entry and exit and the reallocation of resources across the economy. for example, the negative effects of onerous business conditions – like poor contract enforcement and lengthy bankruptcy procedures – are much stronger for new firms than for incumbent ones10. this is the direction in which policy ultimately has to move :

the question is : are you making full use of what that technology can do for you? are you integrating that investment to full benefit in terms of organizational practices and producing end products? we ask ourselves these questions at the bank of canada, whether they relate to investments in our analytic computing capability or the handling of bank notes. they are the right questions to ask. with our trading partners, including the united states, continuing to invest and make strong gains in productivity growth, it is all the more imperative that firms in canada make concerted efforts to boost productivity. and from one perspective, they are well equipped to do so. one possible explanation for this poor productivity performance lies in the shifts in capital and labour that have occurred in canada in recent years as a result of changes in relative prices, notably, during periods of commodity - price shocks and periods of structural adjustment. for further details on canada ’ s productivity challenge, see m. carney, “ the virtue of productivity in a wicked world ”, remarks delivered to the ottawa economics association, ottawa, 24 march 2010 ; and t. lane, “ the canadian economy beyond the recession ”, remarks delivered to the canadian association for business economics, kingston, ontario, 25 august 2009. corporate balance sheets in canada are healthy. profitability is good, with the ratio of profits to gdp back to its long - term average of 10 per cent. leverage – i. e., debt - to - equity – ratios are low and liquidity levels are high. corporate tax rates have declined. absolute borrowing costs are low. and while the non - price terms for borrowing have been a restraining factor, our senior loan officer survey indicates that these terms are beginning to ease as the recovery takes hold. from this perspective, then, there should be little holding corporations back from modernizing their capital stock. but there ’ s an additional perspective, and that is the extent to which firms can access funds for making productivity - enhancing investments. the role of the financial sector is to channel savings to the real economy. given the importance of small and medium - sized enterprises in canada, it is critical that this sector invest in productivity - enhancing improvements. compared with similar - sized firms in the united states, these canadian firms rely more on individuals for financing and less on financial institutions. 6 this, to me, suggests a market opportunity for our financial institutions. as well, additional sources of higher - risk capital are needed for canada to be successful in modernizing the economy ’ s productive capacity