Blockchain: Hugely transformational over the next 25 years
- Blockchain technology will impact many aspects of modern life, and Canada must maintain its lead in this space that will define our future economy.
- Canada needs to fast-track immigration for AI and blockchain specialists since these skillsets are in high demand now and will become increasingly in demand.
- Millennials value not just money, but also their quality of life. So, while they can get higher salaries in the US, many choose to remain in Canada for its high standard of living. This will lead to brain gain for Canada.
Corporate Canada must impart a sense of innovation at all levels. Top-down innovation decisions are ineffective if unmatched by bottom-up disruption.
How do you see blockchain impacting Canada’s future economy?
Blockchain as a technology will be as transformational as the Web has been for the next 25 years.
Let me give you an example of a blockchain application. Right now, in Southern Ontario, we have peak electricity demand on hot summer days when everyone’s air conditioning is running. In order to deal with this high demand, we build gas peaker plants, which cost $250 million and are used eight hours out of a year – that’s eight hours out of 8,760 hours. Is that a good asset utilization rate? Alternatively, we could pay some US utility for electricity at the spot market price, which would be ridiculously expensive.
“Blockchain as a technology will be as transformational as the Web has been for the next 25 years.”
An innovative solution to this problem would be to develop a blockchain application, which reaches out to your Nest or Ecobee thermostat at home and asks you to power down the AC just for five minutes. You will not feel it because the house has so much embedded energy. The utility offers to pay you $1.62 in the form of a credit on your next hydro bill. Your Nest or Ecobee thermostat and the utility negotiate electronically via blockchain. The reason it needs to be blockchain is that you cannot put a person in the middle of that negotiation because it is only worth $1.62. Moreover, people do not scale because this negotiation is happening simultaneously with a million households. So, the first third of a million households powers down for five minutes, the second third powers down for the next 5 minutes, and the final third powers down for five minutes. Thus creating a 15-minute block of shaving peak demand, which becomes an hour if you repeat it three more times. The blockchain makes sure of two things: that your house actually powers down for the five minutes and that the $1.62 credit is put on your account for your next invoice. Which is more politically saleable, paying a US utility $20 million for peak power on this day for one hour, or putting $12 million into the pockets of Canadians who are rate payers and hydro customers? Which is going to get you more political points and which is actually going to avoid spending $250 million on a plant that is used 0.01% of the time?
How competitive is Canada when it comes to blockchain technology?
Canada is ahead in the blockchain space because the Founder of Ethereum is here in Toronto, so there is a community of blockchain developers that has emerged and is rapidly growing. But blockchain is a really early stage technology. It is exploding in terms of growth and there are certain technical skills that we cannot get enough of. Since skillsets in blockchain development are new and rapidly changing, it is difficult to find highly qualified people in them. As a result, companies, governments or research facilities have to pay significant salaries to attract people to Canada, so there is a skill shortage in those high demand areas.
“Canada is the second most popular country in the world to relocate to and we need to take advantage of that.”
Canada has a list of high demand skillsets, the possession of which end up fast-tracking immigration into the country. That list should be updated, because we need AI and blockchain specialists.
How is Canada competing in terms of attracting the top international talent?
One of the things that you see about millennials is that they are value driven; it is not just about business, it is about the quality of life for them. Canada has a fantastic quality of life. We live in a peaceful country, which is middle-power and is respected by people all around the world. In fact, I look at Toronto as the modern day Constantinople. In the middle ages, Turkey’s Constantinople was the crossroads of the world, the trade route between east and west. I see Toronto in that same vein; there are more mother tongues spoken in Toronto than any other city in the world. So, Toronto is the crossroads to the world and provides a great opportunity to both welcome people from all over the world and to reach out and have trade relationships with countries all around the world. Vancouver is the gateway to Asia and Montreal and Quebec tie us into every French-speaking country in the world. We have an educated workforce, we have healthcare and we do not support guns like they do in the US. So, while you may be able to get a higher starting salary in the US, we have our own advantages. Canada is the second most popular country in the world to relocate to and we need to take advantage of that.
How can we make Canadian companies and industries more innovative than their competitors?
In a survey of CEOs, 88% of them said innovation is essential to their topline and their profitability. But only 22% of companies had a formal system of innovation. Imagine that the same set of answers had been given to sales. So, 88% of CEOs know that sales are critical to their topline and profitability but only 22% of companies have salespeople, only 22% tie performance to compensation on a quarterly or annual basis, only 22% have sales tools like a customer relationship management (CRM) and only 22% have sales training program. We would say those statements are ludicrous, and yet that is what we are doing with innovation.
“In a survey of CEOs, 88% of them said innovation is essential to their topline and their profitability. But only 22% of companies had a formal system of innovation.”
We need to make sure that every single person in the company is trained in innovation processes and is driving innovation in the organization. If you have a chief innovation officer, he or she cannot be running around being responsible for all the innovation in a thousand-person organization.
What connection do you see between technology and Canada’s energy sustainability?
Technology has a huge impact on energy use, which is at the heart of our unsustainable lifestyle. Right now, we in North America generate electricity by having a centralized power plant. If you take 100 units of energy, whether that is uranium, gas or coal and burn them, 2/3rds of the energy goes up the smokestack as wasted heat in this process. So out of 100 units of energy, you end up with about 30 units of energy to supply via wires and a transmission system. When supplied on a hot summer day, you lose 10-15% of electricity in what is called line loss. So, by the time the electricity reaches a household, you have lost 67 units up the stack and another 3-5 units going through the wires. At the household level, electricity is used in outdated incandescent light bulbs, which should be called “incandescent heat bulbs” because 80% of the electricity used in them generates heat, not light. So, they actually generate heat in your home and you get six units of light out of them. Ultimately, we started with 100 units of energy and ended up with six usable units of energy. Paradoxically, we now use more air conditioning in our homes to air condition against our heat bulbs.
“We can enjoy huge gains in efficiency through effective demand management by keeping innovation at the heart of our energy strategy.”
So, do you think the answer is to build more centralized nuclear power plants? Or should we instead switch incandescent heat bulbs into LED lights that use 80% less electricity for the same amount of light? Moreover, you do not have to air condition your home against LEDs because they are not heat bulbs. Instead of centralized production, should we not have decentralized production, so that we do not incur the line loss of 10-15%? And should we not be engaged in local cogeneration, which uses that waste heat to heat the hot water system of a hospital, school or your home? If we were to do all these things, we could take the efficiency of the grid from six usable units in this example to 80 usable units of energy for the 100 units put in. That is a 13-fold improvement in efficiency. 27% of our electricity use in North America is simply for lighting. So, we can enjoy huge gains in efficiency through effective demand management by keeping innovation at the heart of our energy strategy.