It’s Time to Focus on Talent to Accelerate Canada’s Startup Momentum
Rankings of countries’ innovation performance are usually far from scientific, but they do act as a signal of perceptions. When it comes to rankings of Canada’s performance related to startups and innovation, those perceptions are dimming.
Earlier this year, Bloomberg released its annual ranking of the “most innovative” countries, which saw Canada slump to twenty-second, behind Slovenia, Italy and Belgium. The Global Innovation Index released by the World Intellectual Property Organization (WIPO) pegs us in a similar light –twenty-second on innovation outcomes, a ten-spot drop in a decade. Similarly, Startup Genome, the San Francisco-based consultancy that publishes an annual global ranking of startup ecosystems, saw our two largest ecosystems in Toronto-Waterloo and Vancouver fall behind others from both developed and developing economies.
At the same time, amid the COVID-19 pandemic, a series of Canadian companies have added to our collective tech confidence. Thanks to superstar Shopify and others such as Lightspeed, Top Hat, Docebo, Maple and Dialogue, the top end of Canada’s tech ecosystem shows more breadth than ever. Each of these, however, is the product of years of development and talent infusion.
Our startup ranking indicates we cannot take this type of success for granted. To win the global race, we need to pay closer attention to the pipeline of companies that show promise in joining our tech podium in the next decade. Our strengths notwithstanding, what these rankings show is that the rest of the world is catching up, speeding up, and in many cases, growing at a faster rate than we are.
“To win the global race, we need to pay closer attention to the pipeline of companies that show promise in joining our tech podium in the next decade.”
This global dynamic makes it more imperative than ever that our startup communities maintain and accelerate their pre-COVID-19 momentum. We must use the destabilizing impact of the crisis on all innovation economies to our advantage by doubling down now to reap the benefits once worldwide economic recovery is fully underway.
Our starting point for this recovery is relatively shaky ground. Data from Toronto-based Prospect indicates that nearly a quarter of Canadian startups have laid off staff during the pandemic, with job postings in tech down more than 30 per cent. This mirrors what happened in 2008 during the global financial crisis, when, 42 per cent of SMEs across all sectors cut their number of employees and 16 per cent instituted hiring freezes. While rational for company executives focused on survival, these moves sever small firms’ momentum, lengthen the time and cost necessary for post-crisis recovery, and ultimately distance these firms from crisis-related opportunities.
We can’t let the same happen this time. A study by Harvard Business School professor Dr. Ranjay Gulati looked at more than 4,700 firms and their strategies related to adaptation during an economic crisis, and found that firms that cut employment deeply during a recession had the lowest correlation with post-crisis recovery. It also found that post-crisis winners are those that focus on continuing to invest in talent, research and development.
Unless we help our startups invest in the talent that will help create valuable intellectual property and translate knowledge into commercial outcomes, we will struggle to develop a next generation of global champions. To this end, governments at both the provincial and federal level must look to de-risk hiring to ensure that talent continues to flow actively between universities and colleges, and the startups that need them.
“Unless we help our startups invest in the talent that will help create valuable intellectual property and translate knowledge into commercial outcomes, we will struggle to develop a next generation of global champions.”
Canada is fortunate to have effective talent brokers like Mitacs to help facilitate this movement. In previous roles I held in the both the public and private sectors, I learned first-hand how effective this national not-for-profit can be by matching the needs of firms with talent from both domestic and international post-secondary institutions. With a focus on scientific and research-related talent, Mitacs has recently added partnerships with business and law schools to ensure that firms looking for strategy, legal and intellectual property capacity are able to access it.
“While government wage and rent subsidies were a necessary starting point to help keep our economy afloat, policymakers must now turn their focus to ensuring our high potential startups accelerate.”
While government wage and rent subsidies were a necessary starting point to help keep our economy afloat, policymakers must now turn their focus to ensuring our high potential startups accelerate. To do so, we need to ensure that the talent that will help them invent, develop and commercialize new ideas flows faster than ever. Our spot in the global innovation economy depends on it.