- Canadian businesses lag behind their competitors in technology readiness and adoption.
- Canada needs more corporate accelerators and incubators to converge the passion and innovation of startups with the knowledge and resources of larger organizations.
- Small and medium-sized enterprises should leverage the resources that are made available through tech platforms to create more efficiencies in their businesses.
Canada’s tech ecosystem needs to move forward with purpose and velocity for Canada to take a leadership position on the world stage. It must also move out of the bubble in which it currently operates to support the broader business community. Finally, Canada must focus on attracting and retaining top talent from around the world.
Why are Canada’s small and medium-sized enterprises important to our economic growth and global competitiveness, especially considering COVID-19?
That is a key question that we are all thinking about. First, small and medium-sized enterprises (SMEs) are critical to Canada’s economic growth and competitiveness. They make up a high percentage of our Canadian workforce and GDP.
According to the Canadian Federation of Independent Businesses, it is going to take small businesses a year and five months to get back to the normal state prior to the pandemic, with some sectors like hospitality being significantly or even permanently impacted by what is happening.
To some degree, small businesses have always struggled. I was on a CEO roundtable with Victor Fideli, the Minister of Economic Development, Job Creation and Trade for the Legislative Assembly of Ontario and he spoke about how SMEs are going to come out fighting and punching back—which is part of what makes them so great. Their resilience, grit and passion are what makes the sector successful in the first place. However, COVID-19 has been a terrible shock and something that is very much out of the ordinary, so many more businesses than normal are fighting for survival and many may not survive without additional help.
“Canadian businesses ultimately lag behind their global peers in terms of digital and technology readiness and adoption.”
This issue is compounded by the fact that Canadian businesses ultimately lag behind their global peers in terms of digital and technology readiness and adoption. And as resilient and adaptive as they are, by their very nature, they are in serious jeopardy. This is something that we should all care about.
How can small and medium-sized enterprises take advantage of Canada’s tech ecosystem?
There is a very specific set of things that technology can enable SMEs to do better, whether that is getting more customers, improving efficiencies, being more productive or leveraging new platforms. There are larger tech players that SMEs can lean into for support, and I will give you a few examples.
Digital Main Street is an organization from Toronto which has expanded with government support across the entire country, and their mandate is to take brick-and-mortar retail SMEs, bring them online and help them to scale their businesses. Their services provide assistance to a small restaurant, for example, which has to launch an online takeout service, or a bookstore looking to sell online. Digital Main Street is helping SMEs through digital support, and tech players like Google, Facebook, Shopify and Intuit have all leaned into sponsor this organization and provide them with resources so that they can scale.
Other examples are Shopify’s resource hub for SMEs breaking into ecommerce and the Canada-wide movement Canada United, which is led by RBC and the government. Canada United has over 50 partners, business organizations and associations, including Intuit, and it is focused on that spirit of collaboration and the importance of rallying behind the SME sector and promoting it.
Looking ahead, how should Canada’s business ecosystem be measuring our progress as we recover from COVID-19?
To be successful, Canada has to work better together as a business ecosystem and then have the tech industry support the broader business community. There is a three-step plan to get there.
First, we have to move with purpose and velocity in our efforts. Canada’s tech ecosystem needs to be operating more as one entity. We are starting to see examples of this, but we could be even more focused. We need a declaration of our shared objectives and vision, a committed team of senior thought leaders, and a structured set of goals that we are aligned to—similar to what you would do in an organization or business. Canada’s business ecosystem needs to have a purposeful approach to the economy.
“We have to move with purpose and velocity in our efforts. Canada’s tech ecosystem needs to be operating more as one entity.”
The second priority is to look at how tech can work with the rest of the business community, because we currently operate in a bit of a bubble. Tech is definitely growing in Canada, but that is only a fraction of the overall GDP and resources. We need to lean into the rest of the community, get them to learn the “fail fast cycle,” build strong team solutions and leverage innovation and talent, et cetera. We have the know-how and the track record of innovation and we move fast, and the government and larger companies have the resources and the funding, so we need to work together.
The third part is to take a critical look at attracting and retaining skilled talent in Canada. There is a recent study that shows we have had more than a 20% rise in tech talent in the last five years. That talent is coming into Canadian cities, but we need to continue to drive that talent through cultivating a tech mindset. You need to bring in the right people with the right skills and the right mentality, because it will bring a tremendous benefit to your company and our economy as a whole. Some of that will be growing the talent within the country, and some will be attracting talent through immigration policies.
To reiterate, the three steps are: first, have a shared vision for driving purpose and velocity; second, making sure we merge the tech community; and third, leveraging talent both internally and through immigration to make sure that we continue to invest in innovation and drive success.
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Who should take the lead in implementing this vision?
This has to come from a smaller group of leaders in tech, and this could be a call to action. You have leaders like me, who are heads of regional divisions of global tech companies, and then there are homegrown leaders like Tobias Lütke at Shopify, and finally there are the next tier down. We also have great investors in Canada—people who used to work in Silicon Valley, and now they are back.
Right now, we operate somewhat in our silos and then partner together occasionally, which is happening more with COVID-19. But we need that group that understands the culture of tech and the mindset for innovation, that have been operating in startup accelerators or different settings within companies, and that know how to work together to solve a shared objective.
The government can set policies in place to create an environment where certain pockets of the economy have success, but we need more thought leadership on how to do it together. Although we all have corporately mandated objectives, we need to think about how to get collective resources, and how we advocate for Canada within global tech companies.
“The government can set policies in place to create an environment where certain pockets of the economy have success, but we need more thought leadership on how to do it together.”
Those within the global tech companies talk about Canada as a sandbox: a nation that looks like the US in terms of the market and its digital savvy consumer base, but is more agile and has a lower cost structure. Let us leverage those strengths to focus on Canada as a place to test concepts, while also having tech advocating on its own behalf. Canada needs to take some of its tech magic and have the rest of the business community exposed to it, thinking about it and leveraging it.
A good example of this is corporate accelerators, where you take corporations and merge them with innovators within the startup ecosystem. Sharing the resources and the structure of the larger organization, with the passion, skills and energy of the startup ecosystem is what we have done with Intuit’s Prosperity Accelerator. We came out of the initial phases of COVID-19 and said we could do something different that will have an impact. An accelerator was where we saw benefit in leveraging the startup ecosystem while providing some guidance and resources for startups to be successful. That is tech within tech.
Does Canada need more incubators and accelerators?
Yes, we do. Entities with resources can help those without. A corporation like Intuit can help by resourcing a small set of startups that need guidance to bring their ideas, passion and energy to life. Accelerators are a microcosm of what we need to do as an economy and as a business community.
One could argue that you should replicate the accelerator process at scale and create a massive incubator that works for all startups, and then let the market self-select where it sees the specific problems that need solving. That is what we have done: there is a specific set of problems faced by SMEs during COVID-19 and the recovery, and we set about solving them. This aligns with our mission of powering prosperity around the world. We also look for a cultural fit between our company and the startups as well, because they are an extension of our team. If our accelerator is successful in Canada, our plan is to scale it within the Intuit global landscape.