Shahrzad Rafati
Founder & CEO - BroadbandTV
Part of the Spotlight on the Entrepreneurship Journey

How Immigration, STEAM Literacy & Gender Equity Enabled the Growth of a Leading Canadian Business

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Takeaways

  1. The tech industry is key to growing Canada’s vibrant digital economy and currently drives job creation, new business formations, and attracts investment capital. To ensure its growth, Canada must continue to attract global talent by enhancing immigration policies that accelerate application processing time and ease of entry, and create cities that offer clean and sustainable environments, as well as affordable housing.
  2. Today, Canada’s digital economy is growing faster than mining, forestry, and oil and gas. For Canada to have a stronger digital economy, the federal government must provide the tech ecosystem and its entrepreneurs with similar financial incentives like the tax breaks and deferrals it currently offers the natural resources sectors. Initiatives such as Increasing the capital gains exemptions cap and deferring taxes for entrepreneurs for the first five years would also help companies find more investment and grow quickly.
  3. To accelerate gender equity across the Canadian economy, industry leaders should collaborate with entrepreneurs to enhance and instil best practices and policies around leadership, accountability, education, childcare, financing and harassment. It is crucial that men are heavily involved in increasing women’s participation in the economy.

Action

Talent acquisition is not only about leveraging immigration. For Canada to act as a successful entrepreneurship incubator, I would pitch the Prime Minister to focus on how we are growing Canada’s home-grown talent for our workforces of the future. The federal government must get involved in addressing the overarching education demands and curricula it wants Canadians to be exposed to, and it must activate these at the provincial level.


What were the factors in your life or career that led you down the path of entrepreneurship?

I grew up in Tehran, Iran, where content was rationed, I only had access to a handful of TV channels and they broadcast an episode on Gandhi every Friday, which taught me that you need to be the change that you want to see in the world. I was really young, but I’d already seen enough of the world to know that I needed a different future. I needed a life where I could make a difference. My parents were also entrepreneurs; my mom ran a textile business and my dad ran a real estate business–my mum is still incredibly busy today. They’re both really inspirational people who I massively admire.

Growing up I always knew that I wanted to create a truly global business that made a truly global impact. So, when I was 17, I moved to Vancouver by myselfwith just one suitcase, without an email account, any computer skills, and very little English. My passion for math and tech drove me to pursue computer science in university.

“Growing up I always knew that I wanted to create a truly global business that made a truly global impact. So, when I was 17, I moved to Vancouver by myself.”

Content, again, played a big role in my life, helping me learn the language and exposing me to new cultures–and suddenly there was so much more of it. It was around this time that I built the business model for BBTV. Given my background, I wanted to play a pivotal role in the democratization of content. And that’s part of the reason why I started BBTV. Ultimately, moving to Canada as a teenager made my dream possible and I couldn’t be prouder that we have built this amazing business out of Vancouver, BC.


How would you rate Canada’s performance as an entrepreneurship incubator? What must we improve upon and how?

I started the business in 2005 and the challenges Canadian entrepreneurs face have improved over the last decade, especially with immigration. Attracting the top international talent from around the globe is key. And immigration in Canada, which is an important topic for the tech sector, continues to improve. The tech industry is key to growing Canada’s vibrant digital economy and it currently drives job creation, new business formations, and attracts investment capital. For example, 50% of BBTV’s leadership team—including myself—are first-generation immigrants.

“We still have to move faster, and provide quicker processing times and ease of entry for Canadian companies seeking to recruit top global talent.”

Canada has made immigration policies and programs part of its tech-talent acquisition strategy, and this is why we have seen a shift from a “brain drain” to a “brain gain”. In the past five years, the tech sector in Vancouver has recruited more highly skilled talent than San Francisco, Seattle and Washington combined. This wave of recruitment demonstrates Canada’s maturity in becoming more innovative and digital, and positions the country on the forefront of emerging disruptive technologies.

However, we still have to move faster, and provide quicker processing times and ease of entry for Canadian companies seeking to recruit top global talent.Some good programs are in place, such as the Global Talent Stream, which helps companies access highly skilled global talent to expand their workforce here in Canada to be competitive on a global scale. But these programs must scale because there is more pressure than ever before for tech companies like ours to find great talent.

“Another important component to improve Canada’s entrepreneurship ecosystem is affordable housing. Highly skilled individuals want to live in clean, green and affordable cities.”

Another important component to improve Canada’s entrepreneurship ecosystem is affordable housing. Highly skilled individuals want to live in clean, green and affordable cities. Housing affordability is a real issue, especially for Millennials. And this is a concern because by 2020, Millennials will represent 50% of Canada’s population. So, cities must design and implement affordable housing programs as part of their talent acquisition strategy.

Finally, financing is key to creating companies and jobs. Canada is very attractive for foreign direct investment. Today, foreign companies employ 1.9 million Canadians representing 1 in 8 Canadian jobs. This is another area that must be scaled, and organizations like Invest in Canada are working on this mandate. Although the situation is improving, we still have a long way to go.


What would you recommend to the federal government in terms of policy and funding to increase entrepreneurs’ success and their ability to scale in Canada?

The Federal Government has a large influence on the start-up community; it has made $450 million in investments in a variety of programs that help leverage the private sector and other capital to inject money into the venture capital (VC) marketplace. The Venture Capital Catalyst Initiative (VCCI) is a great example of this. Since 2010, the VC ecosystem in Canada has nearly doubled in size. In 2018 alone, Canada saw around $3.7 billion in VC investment in Canadian start-ups.

“Increasing the capital gains exemptions cap would incentivize successful entrepreneurs to invest in the next generation of startups, while also getting the VC community to fund more entrepreneurs.”

Although this is good progress, $3.7 billion in VC investment is not a lot of money when compared to other markets. The Toronto Stock Exchange (TSX) lists only 12 Canadian tech companies with market caps over a billion dollars. Only four of these tech companies have a $10 billion plus market cap.

So, if we want a tech ecosystem that is capable of building the next Google, Amazon or Microsoft, Canada has to be competitive and offer more financial incentives like tax breaks and deferrals, similar to what is currently offered to our oil and gas, and natural resources industries.This is essential; the digital economy is growing much faster than other Canadian industries, including mining, forestry, and oil and gas. Between 2010 and 2017, Canada’s digital economy grew by 40%, while the rest of the economy grew by 28%.

There are many strategies and tools that can be leveraged to achieve a stronger tech ecosystem. For example, the federal government could allow an increase in capital gains exemptions. In Canada, capital gains exemptions are capped at $850,000, and that is for all deals. Increasing the capital gains exemptions cap would incentivize successful entrepreneurs to invest in the next generation of startups, while also getting the VC community to fund more entrepreneurs.

“By deferring taxes for entrepreneurs for the first five years, more entrepreneurs are likely to work hard to generate revenue in their company’s first five years and reimburse later on.”

Another option would be to implement a tax deferral for a company’s first five years. Entrepreneurs take a massive risk when they start a business; they don’t pay themselves and they can lose it all. In fact, 95% of startups fail in their first five years. By deferring taxes for entrepreneurs for the first five years, more entrepreneurs are likely to work hard to generate revenue in their company’s first five years and reimburse later on.


What role do academia and the Canadian educational system play in contributing to Canada’s entrepreneurship culture?

Talent acquisition is not only about leveraging immigration. For Canada to act as a successful entrepreneurship incubator, I would pitch the Prime Minister to focus on how we are growing Canada’s home-grown talent for our workforces of the future. The federal government must get involved in addressing the overarching education demands and curricula it wants Canadians to be exposed to, and it must activate these at the provincial level.

I’m one of the founders of FuturePLAY, which redefines creative thinking for kids in grades four through seven. Literacy in science, technology, engineering, arts and design, and mathematics (STEAM) is key because 66% of Canadian youth in grades four to seven will not be working in jobs that exist today.Public and private schools must look at ways to enhance Canadian children’s STEAM literacy from an early age, starting from grade one. Students across Canada must have access to the right digital tools and solutions, and the right learning environment.

“Literacy in science, technology, engineering, arts and design, and mathematics (STEAM) is key because 66% of Canadian youth in grades four to seven will not be working in jobs that exist today.”

The goal is not to teach every student how to code. Instead, the goal is to equip the next generation of workers with an understanding of how they can leverage technology to their benefit so they can pursue their passion and do what they want to do. STEAM literacy applies to the entire future workforce—regardless of whether someone chooses to be a designer, aerospace engineer or journalist. It is about making sure that tech empowers students to pursue a career in their chosen profession, instead of inhibiting them.

The efforts to enhance STEAM literacy must be coupled with proper teacher professional development programs. Technology is moving so fast that teachers also need refresher courses to stay up to date with the latest digital tools and software.


What must we be doing—as governments, private industry, academic institutions, investors, etc.to empower female entrepreneurs?

I have spoken to several entrepreneurs who are in the dark about what the current best practices for gender equity should be. An organization or startup that has no best practices in place for gender equity will have a much harder time in creating an environment that promotes equality.

So, one opportunity to leverage is to develop public and private sector collaborations, specifically with institutions and companies that have been successful in championing best practices for gender equity. If Canadian leaders can collaborate with entrepreneurs to enhance and instill best practices and policies, and get from point A to point B around leadership, accountability, education, childcare, financing and harassment, it will accelerate gender equity across Canada.

“In the same way that a company sets an annual budget and financial targets, the same attention must be given to setting gender equity targets. Without a set of clear KPIs and a plan, a company will never reach equality across its organization.”

Best practices for gender equity must also be designed with clear key performance indicators (KPIs) for everything that needs to be accomplished in terms of female entrepreneurship, gender diversity and gender pay. And these KPIs must be supported by both the public and the private sector.

Next, the delivery of gender equity KPIs—whether it is a 0% gender pay gap or an X% increase in gender diversity across the organization—must be divulged publicly to incentivize healthy competition among key industry players. For example, when a large corporation, such as McDonald’s, discovers that their numbers aren’t performing against the figures provided by Starbucks, it is incentivized to improve its gender equity KPIs. Reaching gender equityKPIs could then be leveraged for procurement contracts, government funding or access to subsidies.

Each company will have a different reality. Nevertheless, in the same way that a company sets an annual budget and financial targets, the same attention must be given to setting gender equity targets. Without a set of clear KPIs and a plan, a company will never reach equality across its organization.

“The most important thing is that Canada needs to eradicate the idea that the issues related to an increase in women’s participation in the economy should be led by women alone.”

Finally, the most important thing is that Canada needs to eradicate the idea that the issues related to an increase in women’s participation in the economy should be led by women alone.The discussion must be realistic and focus on the majority in power, which in most positions of power around the world is still predominantly men. Balance is built only if the people running organizations want it, understand its benefits, and create an equal culture and policies designed to enable it.


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