Over the past seven years, the Canadian government has made investing in and growing the innovation economy a consistent priority. Their focus has been on driving the development of the domestic capacity and expertise needed to position Canada for success in the 21st-century economy.
It is an intelligent strategy.
The Innovation Economy Council estimates that the “innovation economy” – the knowledge, entrepreneurship, innovation, technology, and collaboration that drive economic growth – is currently 12% of the Canadian GDP. But even more importantly, the innovation economy is an area of enormous strength, strategic advantage, and, with the rapid rise of certain emerging technologies, an unprecedented opportunity for Canada.
The Potential of Blockchain Technology
Now, Canada should look toward establishing a leadership position in a rapidly emerging piece of the innovation economy expected to be worth tens of billions of dollars: blockchain technology. Doing so would accelerate the growth of the larger innovation economy and bring with it all the economic benefits that growth brings to communities and ecosystems.
“Last year, the global blockchain technology market was valued at $11.14 billion USD and is projected to grow from $17.57 billion USD in 2023 to $469.49 billion USD by 2030.”
Bitcoin and the blockchain technology it is built on are one of the most exciting and promising areas of innovation. Last year, the global blockchain technology market was valued at $11.14 billion USD and is projected to grow from $17.57 billion USD in 2023 to $469.49 billion USD by 2030, exhibiting a CAGR of 59.9% during the forecast period. However, it is also still one of the least understood technological applications of our time. As a result, governments and industry leaders nationwide – and in some cases, beyond our borders – are reluctant to support its development and invest more fully in its growth.
Despite Canada’s generally warm attitude toward innovative technologies, recent Bitcoin mining moratoriums, punitive taxation measures, and securities guidelines around trading platforms have, at best, thwarted growth and, at worst, deterred new Canadian blockchain technology startups and prevented mature companies from expanding into the country. It is a troubling sign of the misconceptions that persist around this incredible technological innovation.
From the supply chain to healthcare, Bitcoin’s underlying blockchain technology is positively impacting countless industries, and it holds tremendous potential to transform virtually every sector in the country.
For Canada, a national focus on fostering a pro-blockchain innovation economy should be an economic and investment north star, guiding the way in developing the larger innovation economy.
Here’s why and how to help Canada make this happen.
The Why: Reasons Canada Needs Blockchain Technology Innovation
A Positive, Wide-ranging Impact
Bitcoin’s underlying blockchain technology can be used for various decentralized applications (dApps) which are not controlled by any central authority. Each block in a blockchain holds several transactions, and every time a new transaction occurs, a record of that transaction is added to every participant ledger. This makes transactions on blockchains more transparent and more secure.
“Blockchain technology is being used to revolutionize a wide range of industries and, along the way, create more efficiency and value across sectors and organizations.”
As a result, blockchain technology is being used to revolutionize a wide range of industries and, along the way, create more efficiency and value across sectors and organizations.
Already, blockchain technology is being used to create new financial products and services. The Toronto-based company Wealthsimple is using blockchain technology to create a robot-advisory service that is more affordable and accessible than traditional financial advice. Vancouver-based CargoX uses blockchain technology to track the movement of goods through the supply chain, helping reduce fraud and improve efficiency. Blockchain is also being used to create secure and transparent patient medical data records to help improve patient care and reduce costs.
There are also many public use cases. Blockchain technology can be used for voting and identity verification. And for a country like Canada with a strong pipeline of high-talent immigrants looking to engage in the innovation and technology economies, blockchain applications can help companies verify job-seekers’ credentials (a university can issue degrees on a blockchain platform), enabling graduates to easily share those verified credentials with potential employers.
These are just a sampling of some of the technology’s potential applications. If Canada focuses more intentionally on growing the Bitcoin economy and the adoption and integration of blockchain technology, many more uses and improvements will be rapidly developed and adopted. This in turn further increases the density and scope of Canada’s innovation economy.
Blockchain Technology is the Foundation of the Next Innovation Wave
The world is changing rapidly, and the pace of change is accelerating, forcing businesses and governments to constantly innovate to stay ahead of the curve.
“Bitcoin and blockchain are seen as a signal of the strength of the innovation economy because they represent a completely new and transparent way of thinking and operating.”
But understanding what or where to focus is difficult to do, particularly when no one knows what is coming next or how it will look or develop. Bitcoin and blockchain are seen as a signal of the strength of the innovation economy because they represent a completely new and transparent way of thinking and operating.
By investing in programs and initiatives that foster the growth of Bitcoin and blockchain, Canada can be sure that we are building up the technological talent, digital infrastructure, and development capabilities that will be the source of the next innovation wave. By strengthening this sector, Canadians will know that whatever comes next, the talent, insight, and operational foundation will be in place for Canadians to pivot, adapt, and thrive when the next technological advancement or disruption surfaces.
The How: The Pathway to Realizing This Opportunity
Canada has an incredible opportunity to be a global leader in the Bitcoin and blockchain transformation and to use that momentum to fuel the innovation economy. We certainly have the research strength and talent. However, the following actions and shifts must happen to realize this, considering the urgency of doing so while the sector is in hyper-growth mode.
1. Increase Cross-Sector Collaboration
It is essential that leaders from across industries – beyond just the tech and innovation sector – actively begin to engage in discussions on Bitcoin, blockchain, and growing the innovation economy. This can happen through industry associations, political engagement, and creating forums and spaces for leaders to connect directly with these emerging technologies.
In return, this cross-sector collaboration will further foster innovation. When leaders in different industries come together, they create new products, services, and business models that in turn drive economic growth and deepen the strength and resources of Canada’s innovation ecosystem.
2. Create a Supportive Regulatory Environment
Canada needs to create a regulatory environment that is supportive of innovation. This means clear and accessible guidance so that Bitcoin and blockchain leaders understand what is expected of them, ensuring they can proactively navigate compliance risk while growing within the regulations.
“To prevent over-regulation, Canadian policymakers, political influencers, and regulators need to partner with industry leaders in the Bitcoin and blockchain industries.”
It also means preventing the over-regulation of Bitcoin and blockchain technologies, an outcome that can result from fear and misunderstanding. To prevent over-regulation, Canadian policymakers, political influencers, and regulators need to partner with industry leaders in the Bitcoin and blockchain industries. This front-line insight, technical understanding, and future-forward perspective will help develop policies that support innovation and the industry.
3. Invest in Research and Development
As early as 2018, Canada was identified as a hub for blockchain technology and has nurtured several blockchain pioneers. To stay competitive, Canada must continue to build on this solid track record, with ongoing investments in the research and development of blockchain technology through grants, tax breaks, and other incentives that help attract investors and talent in the field to Canada.
4. Attract Global Industry Talent
Blockchain’s potential has sparked a global talent race. Countries like Switzerland are implementing strategic policies and incentives designed for this highly specialized talent pool. Fortunately, Canada is well-positioned to compete in this area.
The Global Talent Stream (GTS) visa, which was purpose-built for tech and innovation companies, removes the traditional delays around relocation by processing employment visas for international talent coming to Canada within two weeks of the employer’s request. To try and retain this tech talent, the GTS offers eligibility for permanent residence in Canada.
Canada’s Global Talent Stream is a unique offer and message that should be actively highlighted to make Canada more attractive for high-talent blockchain and industry teams looking for a longer-term pathway to immigration. Canada’s competitive salaries, supportive work environment, and access to world-class research facilities will also be essential in appealing to the sector.
5. Promote Bitcoin and Blockchain Education
Understanding Bitcoin and other digital assets can be daunting, but blockchain analytics firm Chainalysis has developed ways to gauge digital asset adoption. In its annual Global Crypto Adoption Index, Canada failed to make the top 10 countries with the most substantial rates of digital asset adoption. In fact, the Ontario Securities Commission found that only 13% of Canadians currently own digital assets, suggesting that familiarity and understanding of the sector are very siloed. The survey also found that the average digital asset knowledge score was just 37%.
“Only 13% of Canadians currently own digital assets, suggesting that familiarity and understanding of the sector are very siloed.”
This needs to change. The industry needs to help educate Canadians on Bitcoin and blockchain technology. Business leaders and sector supporters can offer public education seminars, engage in blockchain dialogues, and supply learning resources or support those that do.
Increased public understanding of Bitcoin and blockchain technology will create a more supportive environment for the technologies and the new businesses and applications that will be developed around them. Growing public understanding will also increase interest in careers and investments in the sector.
Finally, industry leaders have a vital role to play in highlighting the potential of Bitcoin and blockchain to boost economic growth, create jobs, and improve financial inclusion.
By taking these steps, Canada can globally lead in the development of Bitcoin and blockchain technology and by doing so, drive growth and engagement in the innovation economy and accelerate the multiple benefits it brings: job creation, boosted economic growth, and the foundation for a prosperous future for all Canadians.