- Canada’s digital economy is 5% of the total economy, representing more than the forestry, mining and gas sectors.
- Canada trains and attracts the core talent that is necessary to drive the innovation ecosystem with over 200,000 skilled tech workers.
- Canada has to make sure it capitalizes on its strengths in artificial intelligence by investing in this sector as one of the foundations to our future digital economy.
Canada is currently living through a once-in-a-generation digitization moment that we must capitalize on to become a world leader in digital economy. To do so, Canada should focus on digital and emotional skills, especially at the executive level; investing in our small- and medium-sized enterprises; attracting and training top talent and venture capital; and scaling up companies that have a digital underpinning in Canada.
Canada’s Tech Industry
Despite the challenges that we are facing right now, and they are big, but they are also providing a huge opportunity for digital transformation, and I am so bullish on tech in Canada right now.
“Canada’s digital economy is bigger than forestry, mining and gas, so it is over 5% of the total economy.”
There are some data out there prior to the crisis that Canada’s digital economy is bigger than forestry, mining and gas, so it is over 5% of the total economy. And I think that this is just going to only increase over time. So we have all these ingredients in our innovation ecosystem in Canada to attract foreign investment and investment of Canadian companies basically in Canada.
The Tech Ecosystem’s Innovation Flywheel
There is this flywheel of the digital economy in Canada. If you were to imagine this flywheel, at the core it is about skilled talent—so this is homegrown talent, the amazing talent that we have and the amazing talent that we can attract globally, because we have the best minds globally coming to Canada. We have great innovation practices, we also are inclusive, we are diverse, we are welcoming and so we have the core of the talent that is the most important ingredient of any innovation ecosystem.
But I think when you think about the flywheel around that core, it is about primary research—so artificial intelligence (AI) being such an important aspect of our Canadian ecosystem; the Vector Institute, Mila, et cetera. All of this primary research that then allows the production of new ideas, products and services. This is where the innovation entrepreneur comes up with this great idea and builds a business around it on that core of talent.
Then the next part of the flywheel is commercializing that idea. What I am so excited about is just the commercialization of Canadian companies going global with a digital underpinning, and that is a large part of what we do at Google. Our platforms and our technologies, things like Search, YouTube, all of the work that we have on TensorFlow, on Cloud—it helps Canadian companies build amazing companies that actually service Canada and the world from here. But we need to get really sharp at commercialization globally from Canada.
“We need to get really sharp at commercialization globally from Canada.”
We have these really great incubators and these support systems, so when I think about the work of the DMZ, of Communitech, of MaRS Discovery District, they do such an important thing in coaching startups on their idea right through to commercialization and that part of the ecosystem is key. Then I think part of that too is just our culture. We are collaborative in Canada, we are diverse, we have a very diverse set of people in our ecosystem and we are inclusive, and I think that matters a lot in how we work together as an ecosystem to make digital important and to attract investment in Canada.
The Canadian Tech Sector’s Attractiveness to FDI
I think so much about it is our innovation ecosystem and the talent that we have in Canada. So diversity and inclusion, it is kind of a value we have in Canada and we see it as a strength in our workforce. We have the highest educated workforce in the Organisation for Economic Co-operation and Development (OECD); we have a very strong immigration policy for skilled workers. I have had startups and small companies talk to me about getting folks in six weeks—just getting them to Canada and having them start.
And it is so interesting right now, in this work from home paradigm, being able to hire people from anywhere. Then, the diversity is on so many different fronts, right? We just have this deep-seated talent pool of technical talent. The Toronto-Waterloo Corridor is a global centre for tech talent. There are 200,000 skilled tech workers in Canada, 15,000 tech companies, 5,000 tech startups. You could look at the University of Waterloo, that is a top three school for Google in terms of engineering talent.
“The Toronto-Waterloo Corridor is a global centre for tech talent. There are 200,000 skilled tech workers in Canada, 15,000 tech companies, 5,000 tech startups.”
And when we have this pool of talent and then we have this pool of successful startups that hire, and an ecosystem that has anchor tenants—larger companies like the Googles, like the other Shopifys, like the other large companies—and a growing startup ecosystem together with the infrastructure, that is what makes Canada so interesting. For Google as well, our focus on diversity and inclusion in Canada, that is really important, and it is really important we continue to invest in that.
Canada’s Global Competitiveness in Artificial Intelligence
AI is critical to Google, it is critical to Canada, and we have such a strength in AI in Canada.
If you look at Google, our mission is to organize the world’s information, make it universally accessible and useful. If you ask any Googler, they can repeat that. And I think AI is such an important thing because it helps us to do that in new ways. It helps us to solve new problems for users, for customers and the world.
“AI is critical to Google, it is critical to Canada, and we have such a strength in AI in Canada.”
But the unique thing about Canada and AI is that we have such a strength here and we have to make sure that we capitalize on this strength. So our rock stars of AI are the Turing Award winners—Yoshua Bengio, Geoffrey Hinton—and this is like the Noble Peace Prize for Computer Science. This is a big deal, to win the Turing Award. They are both based in Canada, they both work with universities et cetera, and they are a magnet for talent. So there are so many people coming here to study and to learn with these amazing AI rock stars that we have out there that it has created this cluster of really unique talent and then startups in different [kinds] of approaches that are actually spawning off of all of this.
So we have homegrown AI innovations from Canada to predict floods, to power self-driving cars, to improve health outcomes, and I think if we can make this our strength and we continue to invest in this, I think it is going to be so important to the future of our digital economy.
COVID-19’s Impact on Canadian Tech and Digitization
I feel really passionate about this, and we are in a moment, a once-in-a-generation digitization moment. For perspective, I am seeing about five years of digital transformation that basically has collapsed and happened in the past five months. And companies large and small are taking this digital transformation moment—sometimes out of necessity and sometimes out of just forward-looking opportunity—and they are running with it. So we are seeing folks do things in the past five months that normally would have taken them a lot longer to do.
“I am seeing about five years of digital transformation that basically has collapsed and happened in the past five months.”
And my hope is that coming out of this, we seize this once-in-a-generation digitized moment—and Canada is globally known as being excellent at digital.
This is a very large, wide, broad statement but there is I think a couple of components we need to keep an eye on. One is that goes down to skills and talent. Every company is going to be shaped by digital and you can see it clear as day right now, so every company needs amazing digital skills. The Business Council of Canada and the Future Skills Centre (FSC) have just released some really good research on this, and a lot of companies right now are looking at the future of skills and they are worried that there needs to be more technical talent but there also needs to be this “unicorn” of great digital skills and at the same time emotional intelligence (EQ). So human skills, collaboration, the ability to work as a team, which really takes on an interesting nuance in this screen-to-screen, square-to-square environment where a lot of that has shifted from where we were meeting in person in the past.
So I think investing in digital skills is one of the most important things that we can do. That is why we are so fully vested in Grow with Google. We have seen I think about 4,000 companies that have been trained in the past while, we are seeing this huge increase of people looking for online courses and I would really recommend folks just check out what is available on Grow with Google and beyond for that.
I think also we need to invest in our companies, our small and medium business. And 98% of the business in Canada are small and medium, and they hire over half of the workforce in Canada. So the pushes that we have been making, like ShopHERE in helping retail—which is the second largest employer, by the way, for small and medium businesses in Canada—so we need to help them digitize and that is why we are doing ShopHERE, to bring these 50,000 businesses online.
But we also need to work across a lot of these small and medium businesses and help them scale this opportunity. One of the biggest vectors of scale that I see is the global company that is digitally underpinned that is based in Canada. Shopify does this, a lot of the companies like WeWork do this. The fastest growing company pre-COVID according to Businessweek was Article. It is an amazing furniture company that has mid-century furniture, but they have digitized the whole experience from supply chain right up to user; and they have made this fluid, amazing experience with a great product and they are doing an amazing job. All these people, around the world, and not just in Canada, want to buy their furniture.
So how do we think about making more global headquarters, based in company, taking advantage of our amazing skills resources, taking advantage of our amazing culture as an innovation ecosystem and growing from Canada? That is what I would really like to see happen.
The Evolution of Canada’s Tech Ecosystem
There is going to be change, right? I think what we are going to see in the future is that, I am hoping that the Canadian companies are really going to take advantage of this once-in-a-generation digitization moment—and this is across industry, regions, et cetera.
“I am hoping that the Canadian companies are really going to take advantage of this once-in-a-generation digitization moment.”
But that we are going to seize this moment and we are going to retool for growth in a post-COVID-19 world. And that means investing in your talent, that means making digital skills and digital fluency mandatory especially at the C-level, especially at the board level. It means investing, so attracting more venture capital (VC) funds and talents and making global headquartered tech companies in Canada.
“We are going to retool for growth in a post-COVID-19 world. And that means investing in your talent, that means making digital skills and digital fluency mandatory especially at the C-level, especially at the board level.”
And I also have one real wish [for this] and that is we are going to do this with diversity and inclusion at the core. There has been a lot of talk about things like the pink-collar recession, and really tough challenges that we are facing at the moment. And it concerns me—the intersectionality of that pink-collar recession, too, when we start thinking about who [the hardest hit are]. I would love to see us lean in more to correct for that and make sure that when we come out of this that we have a diverse set of leaders in our tech ecosystem that are driving amazing growth for Canada, and that the 5% that the digital economy represents for Canada, I will not give a prediction of that number, but that becomes much, much, much bigger. And that we are creating opportunity and we are creating inclusion and we are seen on the global stage as a country that really, really made this moment and used this moment to retool and come out stronger on the other side.