- Economic success is the best way to promote the Canadian brand – and our values and views – on the international stage.
- Although recent immigration policies have been a move in the right direction, developing and retaining local talent, and attracting top international talent is the biggest challenge the Canadian tech sector faces.
- Canada is great at starting promising technology companies but must develop its ability to scale them up. Partnerships with experienced investors are a great way to alleviate this risk.
Canadian governments must implement and execute clear and coherent strategies aimed at seizing the opportunities we are currently missing out on in critical economic areas.
You have said that culture is the most important determining factor in whether a company is successful. How do you view Canada’s culture and brand, and what can we do to leverage their strengths on the global stage?
We have a brand as Canadians and it has never been a better time to have the brand we have. It is in stark contrast to what is going on in the US and the words I would use to describe Canada’s character are “inclusive”, “open minded” and “humble”. Canada swings way above its weight in many sectors, but unlike some other cultures we do not stand on a pedestal and crow about it. I think that is endearing to most of the rest of the world, but some of the rest of the world looks at it and says, “you are too passive or you do not go for it enough.” I do not buy that. I think Canadians do push ourselves to achieve but I just think we do not put it on as many t-shirts.
When we host the G7 Summit and the lead item on the agenda is gender equality, when we negotiate deals with China and we spend half our time lecturing them on gender equality, I do not think we can be accussed of falling short in terms of marketing Canada’s progressive brand internationally. But I would argue that the best way to take our place on the global stage is by being economically successful while maintaining the kind of people that we are.
“Canada swings way above its weight in many sectors, but unlike some other cultures we do not stand on a pedestal and crow about it.”
Where we fall short is our lack of economic strategy. There are still many critical economic areas where we do not have a strategy and we miss opportunities. We are loud when it comes to human rights and expressing our opinion on how things should be, but we should be doing a lot better economically than we are considering the advantages that we have been handed. So the way to spread our brand and take our place on the world stage and swing above our weight is to be economically successful. Economic success is the tide that rises all boats, including the boats of gender and minority rights and the environment – the things that are all critically important and that all have economic value as well.
As someone who has achieved considerable success investing in the Canadian tech space, how do you view this key sector’s development and what must we get right to make it as globally competitive as possible?
Our biggest problem in tech is that we do not have a coherent strategy. A lot of our actions and policies seem well intentioned, but often leave me confused about what their underlying strategy is.
For example, one area where we have done a very good job, maybe too good, is sprinkling early stage money around the technology start-up scene. I think this was done because it is somehow equated with being innovative. The result is that we probably have more tech incubators per capita than anywhere outside Silicon Valley. So if a Canadian tech start-up cannot get a $250,000 cheque, a grant for its technology or support from some kind of government assisted program to get its idea off the ground, it probably should not happen because early stage financing is plentiful and bountiful.
“There are still many critical economic areas where we do not have a strategy and we miss opportunities.”
The counter argument to this is that it is too easy to secure early funding, so a lot of people that should not be funded and should not be entrepreneurs are operating with the illusion that they are in the game, even though they have substandard ideas. But early support is there and it is good. For example, our Scientific Research and Experimental Development (SR&ED) program – the federal program for tech and R&D – has been very helpful to a lot of companies looking to get off the ground, and we have developed a lot of great early-stage technology in this country.
But in contrast to all this, Canadian governments fell over themselves to court Amazon to set up shop in our cities, which would have taken 3,000 engineers out of our tech ecosystem and pushed engineers’ wages up considerably. These engineers would go work for a multinational whose career path leads back to the US. So how do those two things fit together in a coherent tech strategy? Does it make sense that Canada makes noises that we want to grow our own Amazon, that we want to encourage companies to get going and to be able to scale? How can we square that with encouraging multinationals to come here and hire our best engineers?
“Our biggest problem in tech is that we do not have a coherent strategy.”
Another point of contrast is our governments approach to tax. Last fall’s proposed tax changes would have cut the legs out from under the smart early stage angel investment into Canadian start-ups. The feds walked the proposed changes back but the resulting confusion, lack of confidence and the clear exposure of an anti risk-taking agenda has taken its toll on the people we most want investing into our technology opportunity.
One area that is key to the tech sector’s development where Canada has been very successful is immigration. Just as Trump was staking his anti-immigration position, the Canadian Government introduced the Fast Track Immigration Program, which showed talented immigrants that if they are not welcome in the US, they are welcome here. I cannot tell you the disproportionate number of immigrants who walk into my office with ideas that are worth funding, relative to second, third, fourth-generation Canadians. It is huge. The single issue we have as Canadian technology companies is talent. There is a lot of talent available on the world stage so the updated immigration program was a very smart move in order to get some of that top talent into the country. The situation is getting better as we gain more experience and we grow more companies, and people make the choice to live in Canada versus elsewhere, and they bring that experience home. But talent is still the Canadian tech sector’s biggest challenge.
“We probably have more tech incubators per capita than anywhere outside Silicon Valley.”
So although our government has made some impressive moves for tech, I am still in a state of confusion on the lack of coherence in their tech strategy. It is painful and very frustrating for me to watch the bumbling and the fumbling and the lack of clarity on the strategy because I know the prize is right there for the taking. We need to get this fixed soon because this is Canada’s moment: there is a lunatic in power south of the border; we are standing on the world stage as a progressive, innovative, welcoming, beautiful place to live; we have second and third-time tech entrepreneurs coming through the system that are pro-Canada that want us to do well – all the ingredients are in place. The connections between Silicon Valley and the Toronto-Waterloo-Vancouver tech community are very strong. Tech investors are increasingly looking at Canada because of the IP that we have been developing, and the money is starting to flow. Returns are being made so people are more willing to invest. So in so many ways I believe that this really is our time, and I have been through the tech investment cycle a number of times and I have never felt better about the potential of Canadian technology companies than I do right now.
Which are those most promising segments of the Canadian tech sector and how should start-ups within them scale their promising technologies to compete globally?
We are having success in technology in Canada. If you look around the tech ecosystem on the early stage intellectual property front, we are by all accounts leading the world in artificial intelligence. We have some of the best minds and programmers in this space, and Montreal is a hotbed of AI activity. Whether or not you believe in the future of the blockchain and cryptocurrencies there is a fair amount of capital, including a fair amount of smart US venture capital money, that has been invested in Canada involved in these sectors. So we are out of the gate pretty fast on these two critical new areas of technology.
Where we go from here is dependent on a lot of things, especially the development and implementation of a coherent tech strategy that will enable our promising young tech start-ups to grow.
“Tech investors are increasingly looking at Canada because of the IP that we have been developing, and the money is starting to flow.”
We are really great at starting things in Canada, but we are not that good at scaling them up. We have enough capital to start ventures. Canadians need to continue to lead their start-ups and then bring in investors of our choice to help these companies grow.
I am a huge believer in partnership and collaboration, and I think this is one of the smartest things our young tech companies can do when they get to a certain size. They should partner with some of the US-based funds that have a lot more money and a lot more connections in a market that we need to be strong in. And for every 10 of these firms I talk to, 7 or 8 of them say they are very excited and interested in Canada. But it is their preference to partner with Canadians to invest in some of our great young companies rather than just do it directly themselves alone.
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One of your key tenants is that any new business must solve a specific problem. Do you see any problem or challenge that is quintessentially Canadian that we should address and benefit from internationally?
Over the last decade Canada has produced the best engineers in the world, and if you look at Canada as a country, the geography leads to a lot of challenges since we are spread out over vast territories. What better place than Canada then, to develop the Internet of Things (IoT), where we are able to connect all devices with every other on the planet? If you look at our natural resource industry in terms of eliminating operating expenses from the system through technology, I think there is no better place than Canada to address that challenge. Consider, for example, the cost of sending someone out in a truck for two weeks to check oil well heads across some of the most barren territory in the world. Sensor technology has made that a whole lot easier. In many ways, Canada is uniquely positioned in terms of having had experienced the challenges and issues IoT aims to solve, and we are uniquely experienced to experiment with fixing them.
“If you look at our natural resource industry in terms of eliminating operating expenses from the system through technology, I think there is no better place than Canada to address that challenge.”
Are you optimistic about Canada’s future economy and its international position?
It depends on the day you ask me because I spend most of my days around similarly optimistic entrepreneurs that are coming up with amazing innovations and we are making incredible strides. So yes, I am optimistic. But after having two weeks of optimism, I will wake up to either a botched negotiation on the world stage or another high net worth family that I know that has packed up and left the country because of the lack of clarity or a ridiculous policy, and I then get discouraged.
Right now, I view Canada’s situation as “two steps forward, one step back”, which equates to net one step ahead. I think we are moving forward but it could be a lot better, a lot faster and it could be a lot more coherent. Overall, we live in the best country in the world in my view. So at the end of the day, I am net bullish on Canada and its future.