Digital Transformation
Bill Tam, Digital Tech Supercluster
Bill Tam
Co-Founder & COO - Digital Technology Supercluster

Breaking Down the Silos: Innovation through Industry Collaboration

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Takeaways

  1. Canada’s digital technology opportunity is founded on leveraging its advantages in data analytics, AR/VR, quantum computing and AI to develop technologies that impact Canada’s foundational industries.
  2. Small and large organizations across various industries need to challenge their siloed beliefs, share information and work together to spur innovation in Canada.
  3. Data and digital technologies present opportunities for Canada to lead the way in solving some of the world’s biggest challenges, including the fight against diseases and environmental stewardship.

Action

The leaders of the old economy must engage the unicorns of digital technology to create the conditions for a strong innovation ecosystem. They must challenge the assumptions that innovation can only come from within, and that they are prepared to face the challenges of tomorrow alone. By doing so, Canada can become a front-runner in data and digital technologies.


What are Canada’s strengths in different sectors of the digital economy and how do they make Canada competitive within that future economy?

Canada has a vibrant ecosystem of entrepreneurs. We have seen a real push by small innovators to take advantage of the digital technology waves that encompass a number of areas that the country has long been strong in. This includes data analytics, augmented and virtual reality, and the rise of quantum computing and artificial intelligence (AI). We see these sectors as key drivers in the new economy. 

Canada is a in a tremendous position because of the historical strength our scientific and research community. We punch above our weight in the proportion of scientific journals and publications that our researchers and university professors put forth each year. We are the origin point for a number of innovations in areas like clean energy and hydrogen fuel cells, and we were early into the artificial intelligence market. Canada is in the top five markets for AI.  

Our investments in computer simulation, digital graphics and computer animation have made Canada a front-runner in the emerging opportunities in augmented reality (AR) and virtual reality (VR).

Our investments in computer simulation, digital graphics and computer animation have made Canada a front-runner in the emerging opportunities in augmented reality (AR) and virtual reality (VR). This is one of the reasons why Microsoft chose Vancouver as an important part of their infrastructure for developing these technologies. In fact, Vancouver was anointed the number one startup ecosystem in Canada a few years ago.  

Success in the digital economy relies on building technologies that have cross-sectoral impact.

Another area that we are really excited about is quantum computing. D-Wave Systems is the first commercial quantum computing company, and it is based in Greater Vancouver. It has brought with it an ecosystem of players that are going to underwrite the next wave of computing technologies. 

Canada has a few core assets that give us confidence in becoming one of the world leaders in the digital economy. First, we have the hallmarks of digital innovation and technology that can propel us forward. Second, we have the composition of different types of industry sectors that are focused on digital enablement. This is important because success in the digital economy relies on building technologies that have cross-sectoral impact, and the nature of the Canadian environment lends itself well to sharing practices and opportunities. The third asset is really a reflection of how we view ourselves as Canadians. The underlying element of success in using new technology around data, digital, and artificial intelligence, is having a strong set of societal values and a regulatory framework that understands the elements of trust. We need to use data in a responsible manner, and people can view Canada as a safe haven for responsible values and practices in data analytics. We have the opportunity to position Canada as the Switzerland of data. 

We need to create what I call “Team Canada” and foster a spirit of innovation that encompasses different players and different areas of expertise.

Our biggest challenge right now is breaking down the siloed beliefs of where innovation stands. We need to create what I call “Team Canada” and foster a spirit of innovation that encompasses different players and different areas of expertise. That is really what will catapult us onto the world stage.  


How must Canada change its approach to funding innovation? 

For 25 years, the government policy around innovation has been around tax-based incentives. When you look back over those decades, there was declining productivity, competitiveness, and innovation. Canada recently ranked 12th out of the 16 nations in the Organization for Economic Co-operation and Development (OECD) innovation scale. So clearly the old formula is not working. We are trying hard to have a new viewpoint that says the private sector can innovate on its own.  

Canada invests $7 billion a year in innovation. So the government’s investment in the Innovation Superclusters Initiative—$1 billion over five years—is quite modest by comparison. But we are picking emerging economic areas that Canada can win at—areas that will underwrite the future economy. If you look at the five superclusters, you have digital technologies, artificial intelligence, next generation manufacturing, the ocean economy and protein agriculture. These are laneways where we can excel and build a critical mass of companies that can accelerate the innovation ecosystem and flourish as a result.  

We are picking emerging economic areas that Canada can win at—areas that will underwrite the future economy.

The venture capital scene in Canada has gone through a revitalization over the last six or seven years. The federal government became directly involved in the Venture Capital Action Plan, and we saw a follow-up of investment in the recent Venture Capital Catalyst Initiative. At the early stage, we are seeing the re-emergence of institutional investors and more private capital, which is very positive. There has been a natural maturation of this through the continuation of growth stage capital.  

There are other funding initiatives from the Government of Canada, beginning with the Canadian Business Growth Fund. There are also avenues in the private sector that companies have pursued to build more funding to grow and scale. We still need more maturity in those avenues. But in the meantime, work is being done by various trade investment organizations, like the Canadian Venture Capital Association, to attract more venture capital from firms in the US, Europe and Asia. 


What are the Digital Technology Supercluster’s goals? What opportunities does it present for the development of Canada’s future economy and what sectors is it hoping to innovate within? 

Our approach is the art of bringing together stakeholders and multiple organizations, and helping them to realize projects and initiatives they could not otherwise pursue on their own. Canada is a very siloed country—our small population spread across a vast land means people build relationships at the local level. But even at the local level, industry silos exist. We need organizations to come together and rethink their core perspective around how innovation works. In large organizations, especially those that have been around for decades, there tend to be two embedded beliefs: that innovation can only come from within, and that their organization is sufficiently resourced to tackle the challenges of tomorrow. When we bring small and large organizations together, that is when the innovation light bulb moments occur.  

We saw this firsthand with St. Paul’s Hospital, which will be the largest hospital development in Vancouver. When thinking about how they should design a new operating experience for the twenty-first century, it dawned on them that they could learn from aircraft manufacturers like Boeing. Looking at Boeing’s manufacturing and operating controls gave them insights in thinking differently. 

Our supercluster hopes to address the shortage of scale-up companies that can propel our growth rate. This is a weakness we want to remedy within the next 5 to 10 years.

Another Canadian weakness that our supercluster hopes to address is the shortage of scale-up companies that can propel our growth rate. This is a weakness we want to remedy within the next 5 to 10 years. Not only are we bringing small and large companies together, we are spurring and accelerating the growth of those smaller companies. If done properly, the innovators will secure reference customers in their local market and be able to innovate more rapidly alongside their customers. This would allow them to escalate growth before launching into new markets, paving a path to become the next generation of Shopifys of the world.  

The supercluster also allows us the opportunity to better tie together the two elements that drive our economic success: the foundational industries that have been part of the Canadian landscape for decades, and the innovation happening in smaller technology companies. 

We have also designed the supercluster to bring organizations together on research and development projects. They need to collaborate to understand the shape and scope of a problem to assess the base of data and information collected, and to build the most valuable digital platforms that can propel business in Canada. The supercluster also allows us the opportunity to better tie together the two elements that drive our economic success: the foundational industries that have been part of the Canadian landscape for decades, and the innovation happening in smaller technology companies.  

When we started the supercluster, we looked at the regional ecosystem in British Columbia and picked the sectors in which we were quite strong. Natural resources, in particular, is an area where we are seeing an abundance of digitization and digital transformation—there is no question that technology will have a huge impact on building sustainability practices and driving productivity and competitiveness. Ultimately, the application of digital technologies is essential to us becoming responsible stewards of the environment. 

Another industry in which we are strong is the health sector. Canada has become an example of how you can collect and provide health services to a diverse and geographically dispersed population. The work that has been done in Canada over the years in genomics, and its tie-ins to wellness and understanding population health, puts us at a distinct advantage in creating a framework that aligns with precision health for individuals. We are very excited about transforming the data that has been collected for decades to improve health outcomes in Canada and around the world. 

We are at the forefront of using AR and VR to create simulations, or digital twins, of real operating environments.

On the industrial end, our supercluster ties into transportation, logistics and industrial manufacturing, and there is no industry in Canada that is not affected by these transformations. We are at the forefront of using AR and VR to create simulations, or digital twins, of real operating environments. This will lead to better use of capital resources, better predictions in how we can operate within those environments, and decreased costs in both industrial transportation and natural resources. 

The supercluster currently has 21 projects, and the success of those is helping to build momentum within the ecosystem and across the country. When people see what opportunities exist, they lean in and get involved. There are some natural collaborations with interesting projects coming out of Quebec, Ontario and Alberta, and the spread of the supercluster is really starting to take hold. 

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How would you characterize the availability of talent in Canada? What must be done to foster talent, diversity and inclusion in our tech workforce? 

We are involved in talent on a few different fronts. Embedded in the technology projects that we co-invest in is the sense that we are investing in helping companies scale their operations with more capabilities and expertise, so that they can build their talent pool and execute their vision. We want to build out the robustness of the ecosystem, and want to help our companies to onboard and scale the talent that they need to succeed. 

In our context, it is not just the talent that is needed in the industries we are serving. It is also how the digital transformation is going to affect the jobs of tomorrow. We are launching a series of capacity building programs, which focus on talent in the form of specialized jobs that will be needed in the future. This includes digital literacy and ensuring there are employment pathways for people working in traditional industries. There is quite a lot being invested by the government and the private sector to make sure these projects are building out the talent profile. We are also trying to propel the objectives of diversity and inclusion across underrepresented groups.  

It is not just the talent that is needed in the industries we are serving. It is also how the digital transformation is going to affect the jobs of tomorrow. 

There are four key pools of talent that are underleveraged which we are focusing on: Indigenous communities; women, particularly in technology; immigrants, especially those that are qualified or entrepreneurial; and rural communities, which are evolving away from traditional industries into new economy jobs. Our capacity building projects touch on each of those groups.  

There are four key pools of talent that are underleveraged which we are focusing on: Indigenous communities, women, immigrants and rural communities.

To give you an example, we have a project on a women’s entrepreneurship network, which is helping to support startups and create more opportunities for women-led businesses. This is complemented by a future capital program, which is teaching women about early stage investments. Right now, we are finding that the absence of female mentors is a real impediment to having more female entrepreneurs.  

We also have projects underway that work with Indigenous communities. One in particular provides internship opportunities to Indigenous students in high school. When talking about immigrants, we have to break down the perceptions we hold about the skillsets and competencies of these individuals, especially in this new context. We have a project underway with the British Columbia Institute of Technology, which is doing competency assessments and job mapping. The goal is to place recent immigrants with opportunities based on their competency, as opposed to their certificates and degrees. Projects like these are going to help break down a lot of barriers in achieving the diversity and inclusion agendas. 


How has the digital tech sector been impacted by COVID-19?  

Like all sectors, the digital sector is being affected by COVID-19.  Our estimate is that the impact will be less severe for digital tech than it has been in other industries. Nevertheless, digital tech companies are impacted by a slowdown in revenue—particularly if their customers are other businesses or enterprises—and near-term constraints on the funding they need to fuel their growth. 

COVID-19 has served as an accelerant for digital transformation—trends that we expected to see over the next five to 10 years are now happening at an accelerated rate. 

The recovery, however, will be stronger and faster in the digital tech sector than in many others. COVID-19 has served as an accelerant for digital transformation—trends that we expected to see over the next five to 10 years are now happening at an accelerated rate. Virtual health care and companies adopting more digital tools to support remote work are both underlying drivers for faster deployment of digital tech.