Montreal: Life sciences, high-tech, aerospace, AI and clean tech hub

TheFutureEconomy.ca: Significant investments have been made in the Montreal tech sector in recent years, a lot of them around research, data centers and artificial intelligence. What are Montreal’s competitive advantages and what opportunities do these investments create for Montreal and Quebec?

I would say that talent is Montreal’s number one strength because talent is key, we have a great pool here, and we are recognized as the university capital of the world. In the same breath, the industry’s growth is such that recruitment presents a major challenge for most of its companies.

Next would be research because attracting ICT is as much about the market as it is about research and we have great universities that are very active in specialized research. Artificial intelligence is one area but there are other specialisations that Montreal is renowned for, such as software programming.

Our business environment would be another strength. Even though everyone thinks we are only French speaking, 50% of Montreal’s population is bilingual and there are about 80 nationalities present here. This is a good start because it helps people integrate rapidly. The government’s fiscal measures help too and they have strategies to help companies develop locally because they want to attract brains and keep them here.

“Talent is Montreal’s number one strength because talent is key, we have a great pool here, and we are recognized as the university capital of the world. In the same breath, the industry’s growth is such that recruitment presents a major challenge for most of its companies.”

The next advantage is Montreal’s economic development ecosystem; Montreal’s cluster strategy has been delivered since 2005 and it really helps. Instead of Montreal being seen as a manufacturing place where there are only one or two important sectors, it is seen as a tech hub where you can find life sciences, high-tech, aerospace, top leading AI, clean tech and many more areas. Depending on the state of the economy, if one sector is underperforming, there is another sector that is scaling up.

Finally, I am going to say creativity because I think it is part of who we are and having worked on Montreal’s nomination as a part of the Intelligent Community Forum challenge in 2014, we know that these aspects of the cultural dimension are important as well. There is a very collaborative environment here and people are comfortable working together, rather than always competing. People are able to talk to each other and it is easy to establish contact in Montreal. When looking at IT companies, we know they will grow faster if they collaborate and we have been working on helping SMEs work with larger companies.

I think we are a best-kept secret because there are so many great things going on that people have no idea about. When you invite people to Montreal and they look around the city, they often say, “Hey, this is fantastic!”.

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ICT has an opportunity to revolutionize almost every sector of the economy today. How do you see your role in Montreal in terms of connecting all these sectors together?

We changed our strategy at the end of 2015. When participating in the Intelligent Community Forum challenge in 2014, we started to work on assessing the ICT needs of other industries. We worked with Deloitte and asked them to provide us with an overview of what is going on around the world in terms of disruptive technologies, and what impact those technologies would have on different sectors within two to three years.

We then decided to act on specific technologies within different Quebec markets that have the potential to disrupt industries globally. So we created a group on transport where we bring together IT and transport companies. We created another group on health because smart health is another sector that is impacted by technology. Everyone is getting connected and services are changing, so we need to work out our strategies right now. We finally created another group on retail, well known as a sector affected by technology. 75% of Quebec’s online sales are done with companies outside of the province so we need to work on that.

Every time we work on this kind of strategy, we work with different partners. For instance, in transportation, we are working with Cargo M, but also with the Pôle d’Excellence Québecois en Transport Terrestre, the members of which are transport manufacturers. We are mixing manufacturers from one sector with the ICT companies that are already delivering products and services within that sector and we are trying to accelerate innovation this way. In fact, we already have four projects planned in the transport sector: mobility as a service, micro transit, user experience and the electrification of transport. We have been involved with the ITS World Congress worldwide for 3 years now, working on the very next future opportunities: How are we going to connect all of those cars? Who is going to make the first move? What city or country is prepared to be the first testbed for connected cars? In Quebec, there are a lot of government initiatives, like the city’s recently announced Institute of Electrification and Smart Transportation, to study electrification and intelligent transportation.

“We act on specific technologies within different Quebec markets that have the potential to disrupt industries globally.”

In the health sector, we have to link patients, practitioners and public services in a local context where, the government, our hospitals and our business models were all hitting a wall in terms of finding solutions.

Our focus is on addressing the age issue, since Quebec is second only to Japan in terms of its increasingly aging population. We focused our vision on this situation and issues like mental health, Alzheimer’s and geriatrics to see how our IT sector and creative industries are meeting the challenge of aging with a ‘people first’ outlook.

In the retail sector, we are witnessing a major shift in the whole customer process and are developing different strategies with IT companies and retail companies, focusing on client experience and working with the Retail Council of Canada because our reach stretches coast to coast.

This market disruption approach is our main cluster strategy. The hardest part is connecting everyone because a lot of collaboration is needed.

Our most recent initiative, technopolys, is another eloquent example of the power of collaboration within our ecosystem. This major collaborative strategy is being spearheaded by companies, universities, research centres and associations in the ICT sector. As of today, more than 300 organizations have joined our movement.

technopolys draws on the sense of pride within our industry and helps in increasing knowledge about its contribution to Quebec’s economy, the innovation ecosystem, and citizens’ quality of life. It promotes entrepreneurship, technology careers, and the teaching programs that lead to them. And it increases international recognition for Quebec as a digital innovation hub.

The maturity of our technology ecosystem now allows key influencers to join forces in this unprecedented strategy. This, in turn, will afford the industry a reach and influence that matches its true value as an international ambassador of our knowledge, a catalyst of today’s economy and a pillar of the future economy.

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How developed is Montreal’s ICT sector to address all these opportunities?

Very. In retail for instance, all our Montreal companies involved in the market focus on the entire supply chain and we add up because it’s not just companies but also lots of other institutions. For example, McGill has just launched a retail management school and Concordia is also doing something. Moreover, data is key when developing a user strategy so we have the Institute for Data Valorization (IVADO), the Montreal Institute for Learning Algorithms (MILA) and many others.

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What are the challenges of the Montreal ICT sector and how are they being addressed?

One of the challenges we are trying to address in the ICT sector is talent. ICT transforms a lot of companies and entire sectors of the economy so we have to act quickly to keep up and stay ahead. We do a lot of promotion within the high schools to fill a gap we evaluate at about 6,000 employees. It is a Canadian problem and it is a challenge for us too; if a SME wants to grow, what they need is talent. One of Montreal’s first big data companies, Mnubo, does something like 95% of its sales abroad and they are looking for talent. Our challenge is to attract more talent and Montreal International is doing a great job by attracting foreign workers but we do need the pace to accelerate with local programs.

Of course, a lot of our university graduates end up working in ICT but still, all sectors need more talent. For instance, we have studied the needs of the finance industry and we are missing many data scientists, not only in Montreal but in Toronto as well.

“The Federal Government’s Supercluster Initiative pushes provinces to talk to each other right now.”

Another example is Business Intelligence (BI) – it has changed a great deal in the last few years so we have to make sure that our universities are covering this evolution at the same pace. It is part of our role to connect universities with the needs of the industry and, in 2017 we made a diagnosis of 7 sectors to assess their needs, and those needs are going to be communicated to universities and vocation colleges.

Another challenge that we are looking at is the fact that we need more medium sized companies. We therefore created a program called Plan De Match, which is a growth program for ICT companies with three strategies: innovation, new markets and M&As. We want to help companies that plan ahead and want to ensure fast growth; so we have coaches who try to develop strategies with them to see these companies grow rapidly. I think there are challenges for every ICT company that goes from $5 million to $15 million in revenue and we are trying to address these challenges.

“Research attracts major investments; look at Google and Microsoft’s investments and they are all linked to research.”

Lastly, there are a lot of start-ups here and there is a nice ecosystem but we need to develop our markets. The US is our first market and we have challenges with the NAFTA agreement right now. So, we conducted a survey with our companies and asked them if they have a contingency plan. This is not only a challenge for Montreal but for all of Canada and ICT touches on so many areas. Depending on where you stand in the supply chain, you may work with US companies, Mexican companies or with governments. If you have to base your company in the US, what do you do with the data, given the Patriot Act? So at the international level, the NAFTA agreement is a real challenge and we are now looking at the CETA agreement too to see what we are gaining and what we are losing. We have a group that is solely focused on public policies because there could be some challenges ahead in that area.

How much of your work involves outreach outside of Quebec?

I think the Federal Government’s Supercluster Initiative pushes provinces to talk to each other right now. The cluster strategy is really a Greater Montreal area strategy and there are not a lot of organized groups in other parts of the country that are developing the same way as we are.

“There is a lot of capital in Montreal and there have been a lot of VC investments in ICT companies.”

Research attracts major investments; look at Google and Microsoft’s investments and they are all linked to research, and these two companies are not alone. For example, in retail there are some groups who are thinking about bringing their research centers to Montreal. What attracts companies is the fact that there is money, talent and a clear strategy in Quebec. When we look at the last provincial government’s budget, we can see that the money they are investing in research is attracting a lot of large companies. They are all fighting with their headquarters so you have to find a unique field of research, which isn’t done anywhere else.

Lastly, the ecosystem is an important factor. Are there start-ups? Is there an ecosystem? Are there venture capital financiers? There is a lot of capital in Montreal and there have been a lot of VC investments in ICT companies.