Entrepreneurship and Innovation Post-COVID
- COVID-19 has had a catalytic effect on the innovation economy as structural weaknesses within companies have been revealed and accelerated while innovative companies have responded to challenges by capitalizing on opportunities.
- Entrepreneurship education has become a variation of the scientific model, where patterns of recognition, and developing and testing hypotheses create resiliency among entrepreneurs and allow for experiential learning.
- Government policies on innovation need to take a long-term approach to create consistency so that there is less risk associated with investing in innovations.
Government can benefit from the experience and views of business leaders, who understand some of the frictions that inhibit speed and scale of further innovation. It would also be helpful for Canadians to listen to the voice of our youth, on what they want for the future of society and how they want to achieve it. Our youth have great entrepreneurial potential.
How would you characterize the innovation ecosystem in Canada? What are its main challenges and opportunities?
Canada’s innovation system is one that has upside potential. There is a great research base, especially in the universities. They are well-funded and have world-class researchers. However, there is a tendency for innovation to be slow to come out of the labs and to be licensed outside of the country early on. That is something that many people have been giving attention to in recent years, and it is something that I am involved in.
In innovation, challenge and opportunity are two sides of the same coin. If we do not take the challenge, we do not realize the opportunity. The challenge, in part, is that Canada is a relatively small economy and country next to a large neighbour. In recent history, there has been a globalization of technologies as they commercialize—so a country with 37 million people has not been the ideal place to anchor a global business. The opportunity is to build strong, robust Canadian-based businesses that can serve a larger market beyond our domestic one.
“In recent history, there has been a globalization of technologies as they commercialize—so a country with 37 million people has not been the ideal place to anchor a global business.”
In the context of COVID-19, the pandemic has given people in many countries, including Canada, a real sensitivity to global supply chains and the undesirable impacts of their disruption. Particularly in certain key areas of industry, like healthcare, building out more local capacity is going to be something we will see. In the short-term, we are witnessing a release of government funding to try to activate or accelerate key areas like drug discovery, treatment, and tracking—all very much health-related areas.
“In the context of COVID-19, the pandemic has given people in many countries, including Canada, a real sensitivity to global supply chains and the undesirable impacts of their disruption.”
Prior to COVID-19, international investment in Canada was helping to create a critical mass and to enlarge the innovation ecosystem. It also brought in more talent and fluidity of talent. The downside is, of course, where does the intellectual property reside and where does the bulk of profit end up going? Now, it is hard to assess how foreign investment is going to play out. There are a number of different dynamics at play—not least ease of travel and protectionism—which will impact potential foreign investment.
How have shifts brought on by the COVID-19 crisis impacted the innovation economy?
There are a couple of things here. There is obviously the short-term demand. Depending on the industry, we are seeing some industries go close to zero demand. But if you take something like Zoom, the number of daily users went from 10 million to over 100 million within a couple of weeks. That is a very specific business, but what we see is that where there are challenges there are opportunities.
In the short-term, restructured economy, what are the business opportunities that can be supported? The companies that are doing poorly are not suffering because of the pandemic—the pandemic has actually shone a light on a structural weakness and accelerated it. But there are a number of tech companies that are doing very well at the moment and are saying variations of the phrase, “We’ve seen two years of digital transformation in two months.”
“The pandemic is having a catalytic effect on what was already in play, and it created opportunities while revealing weaknesses.”
On the flip side of that, there are vulnerable sectors—for example, commercial real estate and shopping malls—that have been disrupted by two years in two months. The pandemic is having a catalytic effect on what was already in play, and it created opportunities while revealing weaknesses.
However, being innovative, adaptive and an entrepreneurial thinker does not need to involve technology. It does, however, need to involve change and recognizing changes in consumer behaviour. A simple example would be a Montreal retailer who might decide that they do not need as much physical space, so they begin running a more custom pop-up shop to existing customers. It might not be high tech, but it is utilizing the opportunity for personalized web communication. The way people speak about tech is like how they spoke about the fax machine in the 1970’s. That used to be seen as tech, but it just became a required piece of equipment and was not sufficient for success.
Do you think the government is doing enough to support entrepreneurs and innovators during COVID-19?
Government policy on COVID-19 can become a controversial area because it comes down to how much money the government is going to inject into the economy in certain areas, and how that will help or distort markets. On the flipside, part of the role of government is to reduce friction.
I think people’s behaviour—both individually and corporately—plays to where they see the rewards in the short term and long term. Government policies need to stay long-term to create consistency for people and to limit the perception of risk in technological innovations.
“Government policies need to stay long-term to create consistency for people and to limit the perception of risk in technological innovations.”
If we take, for instance, the pharmaceutical drug industry and the life sciences sector in Canada there are great strengths in universities and associated industries, but we need confidence from investors to invest in innovators so that they can build multi-decade companies. To achieve this, there needs to be confidence around how the government policies are going to evolve, and we may see that COVID-19 catalyzes those discussions. Currently there are a number of emerging drug therapy companies in Canada that could become world companies if they are anchored and retained here.
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Is entrepreneurship innate? If not, how is entrepreneurship being taught today?
That is a question we hear quite often. If you went back less than 10 years ago, you have a lot of people in agreement that entrepreneurship is innate—you are either born with it or you are not, and you cannot teach it. But what we have seen over the last decade—characterized by the work of Steve Blank, Eric Ries and the lean startup movement—is that new business canvas models work. There is a new recognition that we can be systemic in deconstructing and building new ventures.
Entrepreneurship education has effectively become a variation of the scientific model; hypothesize, test, gather results, reflect, and develop a second hypothesis. This lean startup—is now accepted and taught in university business schools and high schools. Therefore, entrepreneurship education can be taught, however, some people have instincts that they can harness better than others.
“Entrepreneurship education has effectively become a variation of the scientific model; hypothesize, test, gather results, reflect, and develop a second hypothesis.”
When I teach students entrepreneurship, I draw three circles. One of them is the hero founder, one is scaling a startup, and the last is corporate innovation. It is the intersection of these three circles that I teach. It is about dealing with ambiguity, testing hypotheses, working with incomplete data, multitasking and building teams. By learning the shared skillet, people can work through different roles in their careers, as innovators and entrepreneurial thinkers in startups, scale-ups and/or larger organizations.
One of the things I’ve found from talking to potential students coming into the UBC Sauder School of Business is that a lot of our young, bright and ambitious students self-disqualify because they fall into the stereotypical myth that if you are not Steve Jobs you will not be successful. Steve Jobs was brilliant, but he was born that way, and whether you like him or not, you cannot be him. What they fail to see is that he was an outlier, and there are a number of things you can learn from what he did that was systematic and a pattern recognition.
“I have used the phrase with my business students that you have to become comfortable with being uncomfortable. They have to learn to become more resilient.”
I have used the phrase with my business students that you have to become comfortable with being uncomfortable. They have to learn to become more resilient. One of the challenges is that these students have become increasingly used to getting the right answers and high grades on assignments, so they have a very ordered world, and the world of business is one of constant change. Students need to be comfortable with dealing with that change. By dealing with ambiguity and development and testing hypotheses, students will gain that experiential learning.
Another thing I would put forward—even though this quote is attributed to IDEO, the California design firm—is the expression: “fail fast, succeed sooner.” The whole intent is that our students are thinking that they have to succeed the first time, but I explain that when you teach a child to ride a bike for the first time, you give them safety nets so they can practice and fail, fail and learn. That is what I try to instill in my students. I think it is really important that Canadians listen to our young people about what they want to do in the future, and why they want to do it, because they have great capacity and we need to get out of their way to enable it.
“I think it is really important that Canadians listen to our young people about what they want to do in the future, and why they want to do it, because they have great capacity and we need to get out of their way to enable it.”
How important is collaboration between industry and academia to the innovation economy?
At both CDL and UBC, there is a large amount of collaboration between research institutions and the corporate world. The corporations that are trying to innovate and have been thoughtful realize that they cannot innovate by doing everything in-house. They want to build bridges both with research universities and programs such as the Creative Destruction Lab, which helps startups out of the labs commercialize. UBC and CDL become connecting places for industry partners and technology startups that we are helping to de-risk. At last count there were 600 formalized corporate partnerships with the research labs at UBC, and there is natural inbound for interested corporate parties as well as specific areas of mutual interest like quantum computing or agricultural science. There is a lot of collaboration, but that is often not in the public eye.