Part of the Spotlight on Quebec's Digital Transformation
Jean-Louis Lalonde
President & CEO - AZUR Group

Quebec’s AI Investments Must be Democratized and Benefit Local SMEs

Takeaways

  1. The digital tech innovations created by Quebec’s tech providers and research institutions rarely reach the level of the province’s SMEs. This must change as increasing SMEs’ levels of productivity, efficiency and competitiveness would have a major impact on Quebec’s GDP.
  2. To be competitive in the new AI and digital era, Quebec’s SMEs will need to rely on smart AI-powered solutions based on their own internal IP and mission-critical systems.
  3. Governments must provide assistance to increase SMEs’ digital transformation projects at a much higher rate through more specific government incentive programs.

Action

The Government of Quebec must implement initiatives that harness the flow of money coming into our digital and AI hubs and help local SMEs remain competitive and become leaders in this digital world. More technology service providers need creative government policies and incentives such as a special program dedicated to support AI projects to quickly bring innovations to the level of SMEs. The main goal should be to improve their smart digital transformation success rate to help their services and products compete worldwide.


What are the strengths and weaknesses of Quebec’s digital tech sector?

The sector is growing and performing very well. Our local artificial intelligence (AI) talent pool and university research capabilities are attracting large global players like Google, Microsoft, IBM, Facebook and others. Montreal has been named the world’s 2nd AI hub. It boasts hundreds of leading researchers as well as over 10,000 university students in related programs, and hosts world-class AI research institutions, such as Mila, IVADO and others. Capital is therefore pouring into Montreal’s AI cluster and its AI incubators. Because of its AI expertise, Montreal now has the collective knowledge for developing smart business solutions for the 3 main sectors of the Canadian economy: resource extraction, manufacturing and services. This is a considerable advantage.

However, there currently exists a serious disconnect between the development of these cutting-edge AI capabilities and their industry-related applications. Too much money is directed toward advanced AI research centers and not enough is going towards implementing AI and digital solutions for SMEs at a cost that those smaller companies can afford. I agree that AI concepts still need to be researched and improved but, at the same time, the solutions and capabilities that stem from that AI research need to be democratized by being implemented into all of Quebec’s companies so that they – and the province – can benefit from it right now! The goal should be to leverage our AI capabilities to build smarter business solutions for SMEs operating in all sectors. This must also be done while ensuring we adhere to the Montreal Declaration on the Responsible Development of Artificial Intelligence, which aims to stimulate public debate and to offer a progressive and inclusive orientation to the development of artificial intelligence.

“The solutions and capabilities that stem from that AI research need to be democratized by being implemented into all of Quebec’s companies so that they and the province can benefit from it right now!”

Basically, we need to harness the flow of money coming into our digital and AI hubs to help Quebec’s SMEs remain competitive and seek to be world leaders. To do so, more technology service providers will require creative government policies and incentives to quickly bring innovations to SMEs. This will accelerate their rate of digital transformation and make sure they and their products are able to compete worldwide. If we only focus on AI for large corporations and leave our SMEs behind in this respect, we and our future economy will be at great risk.


What should the Government of Quebec prioritize to enable SMEs to increase their competitiveness through digital transformation?

I believe there are currently enough government programs and incentives to increase the exports of services and solutions offered by Quebec’s companies in foreign markets. Having a positive GDP balance is one of the main goals of any government. However, we also need to make sure our companies – such as Quebec’s manufacturers, for example – are as efficient as possible in exporting high quality products at a price that is internationally competitive. What is the point of placing a large emphasis on increasing our export capabilities if our processes and products are not optimized to compete worldwide?

To support this, the Government should encourage the adoption of new technologies by Quebec companies at a much higher rate through more specific government incentive programs.

“The government must identify the AI programs it is currently investing in and look at how we can democratize the AI applications and solutions stemming from those programs by adapting them to serve and improve SMEs.”

To be competitive in the new AI and digital era, Quebec’s SMEs will need to rely on smart AI-powered solutions based on their own internal IP. Governments must provide assistance programs to increase the number of modernization projects related to mission-critical systems SMEs have developed in-house. A mission-critical system is one that is absolutely essential to the survival of that business or organization. It is this type of solution that is often at the root of these companies’ initial success and of their competitiveness.

I often meet with IT people in SMEs who are torn between rewriting their in-house application or using expensive software packages from US suppliers that are not entirely adapted to their business needs. SMEs cannot only rely on such costly generic software packages to compete. They must implement digital and AI solutions that are tailored to their specific business and operations, and that offer great ROI by innovatively improving their efficiency and differentiating their business from competitors. Ultimately, every one of a company’s high-value micro-tasks must be optimized in order to be competitive on a global scale.


What can SMEs, and their tech solution providers, do to accelerate their adoption of the tech solutions that will increase their productivity?

One of the main reasons SMEs are slow to adopt innovative tech solutions is that most tech companies and solution providers are focused on working with large accounts and they therefore leave SMEs behind. I must say that it is currently hard to work with SMEs because their buying cycle for innovative technology is much too slow. This is because they are afraid of investing too much money on software packages that are not adapted to their specific needs. They are also fearful of reducing their own IP or in-house solutions to performing generic business functions not related to their key advantages. But AZUR Group is now making that shift from focusing on large accounts to also tailoring our offer to the needs of SMEs. And based on their numbers alone, increasing SMEs’ levels of productivity, efficiency and competitiveness would have a major impact on Quebec’s GDP. Enabling tech companies to harness cutting-edge AI research and applications, and integrating them into SME-focused solutions, is key to our economic future. To put it simply, the government must identify the AI programs it is currently investing in and look at how we can democratize the AI applications and solutions stemming from those programs by adapting them to serve and improve SMEs – the government has a key role to play in making this a reality.

“Unfortunately, a lot of SMEs are not even aware of the government programs that exist to help them finance their digital transformation.”

The big challenge is finding a way to take AI-powered solutions designed for large companies and make them affordable to SMEs. To do so, AZUR Group relies heavily on software automation. We have over 20 years of previous software development and are applying it to SMEs’ unique IP and in-house solutions. Our knowledge set is based on high-performance system architectures, digital and AI frameworks, and high productivity tools that have continuously been improved over the hundreds of projects we have completed for our customers.

We are also developing strategic partnerships aimed at bringing down the cost of these developments. Unfortunately, a lot of SMEs are not even aware of the government programs that exist to help them finance their digital transformation. One of our partners is therefore helping us in designing the right financial solution to match the best government grant and financing solutions available to each customer.


Scaling up is often a challenge for Canadian start-ups. As a company that has successfully surmounted that obstacle, what would your advice be to up-and-coming entrepreneurs?

To scale, start-ups need to better foresee the future of their company. Many suffer from short-termism and lack the ability to anticipate what’s approaching; and this challenge will be compounded by the explosion of business complexity the next years will bring. Start-ups must have a great business plan, thoroughly validate any innovative ideas, and make sure they can better manage their cash flow once a project is started. Too many companies run out of cash by over-expanding their operations. So, for start-ups to scale and stay in business, they need to anticipate their business results and constantly readjust their operations to match the budget targets of their projects.

At AZUR, we have designed a web application to support our AZUR Innova incubator process to quickly validate the business potential of any idea. The main goal is to avoid writing even one line of code for a new SaaS solution or a new major software feature before we are confident the investment will pay off. Secondly, we use EFS – our own smart treasury management solution – to better navigate our operations in real time. It provides us with optimized treasury decisions that are supported by Business Intelligence and AI. Providing the best robo-treasurer in an affordable and multilingual SaaS solution for all large and medium-sized Canadian companies is our main goal for 2019.

We firmly believe this will enable all Canadian companies to make the informed decisions that will allow them to scale. Also, for investors, we believe that any investment made into a company must be followed closely using this type of solution to reduce risks and to have a much better understanding of the company’s evolution and situation in real time.


Are we educating, attracting and retaining the top international talent that is crucial to our tech industry’s growth and competitiveness? What should be done differently to improve the local digital talent pool?

We do not have enough qualified workers in all our tech sectors, and at the same time we have too many of our young people dropping out of school. I firmly believe we need to transform Quebec’s education system and quickly adapt it to the speed and needs of the modern economy. Students are currently learning too many concepts based on old educational premises.

Do not get me wrong, we still need to continue producing graduates with higher education, but we also need to train highly specialized professionals possessing the right technical skills – and we must integrate them into the workforce much faster. The one-size-fits-all education system is not working anymore. It’s too slow for the modern economy and it will get worse if we do not change the rate at which we produce high-tech specialists.

“We need to transform Quebec’s education system and quickly adapt it to the speed and needs of the modern economy.”

The key is to reform the educational system around mathematics. I cannot believe how many young people are afraid of math without ever having been exposed to its beauty. We are collectively doing a very poor job of showing the power of mathematics, which underlies the natural forces of the universe. We should make learning science and mathematics fun at a very early age. With the coming 5G network’s speed and capacity, I can foresee our children having access, for one hour a day, to a personalized virtual robo-teacher inciting them to reach math levels while having a fun gaming experience. Once students are fluent in mathematical concepts many other concepts can be grasped quickly.