Canadian tech needs a deeper, more connected ecosystem for support – Policy Options

As Canadians, we wait for our homegrown actors and musicians to make it big south of the border before we treat them like big shots. We expect that our start-up tech companies will be sold to international competitors before we see them as big enough. It’s just how life works for a nation of little guys living next door to the world’s largest, richest market.
We shouldn’t be so fatalistic, though, because Canadians do just fine working within Canada and on the bigger international stage when we work together to create the conditions for success – and those successes benefit us all. Just as Canadian content needs a supportive ecosystem, so does Canadian innovation. Our most promising tech companies will sink deeper roots when we build ecosystems to help them grow and flourish.
That can only happen if Canadians keep working together to build it, because in an ecosystem, one shallow root strand is never enough. Startup companies don’t exist in vacuums of their own genius. They need deep, intertwined networks of customers, suppliers, investors, relationships and talent to grow – a reality famously documented and popularized by Harvard professor Michael Porter in the late 1990s. These clusters leverage local competitive advantages to enhance productivity, stimulate innovation and create new business opportunities, both locally as well as internationally. Think Silicon Valley, Hollywood, the Detroit auto industry, the City district in London.
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A well-developed cluster can sustain and grow young ventures to a size where they are less in danger of foreign competitors. That’s important because small start-ups are vulnerable to acquisition and relocation. B.C. Tech Association research has suggested that companies reaching 100 employees are more likely to stick around. Even if they get bought out or internationalized through investment, they are more likely to retain meaningful economic ties (like headquarters or research divisions) in Canada. Some of them keep right on growing here.
I’m thinking of companies like Wattpad, the Toronto-based story platform that was bought out by a South Korean company early in 2021. It would be great if all our companies could remain in Canadian hands, but Wattpad is not a Canadian failure – it’s a success. It’s still here and the new buyer is pouring money in to help it grow. It’s planning to hire nearly 100 people this year. Its founders are still here, reinvesting their money. That’s because it grew large enough to have choices in how it shapes its future.
Canada needs more companies like that. But we can’t simply cross our fingers and wait for them to appear. We need to keep building out the innovation ecosystem, so these start-ups have access to more networks, more investment, more talent, more partnerships and more collaboration to sustain their growth. We need to support their global export potential by providing a strong start at home.
How does all that happen for Canada?
Some of this work is already underway in Canada. These principles are baked into the work led by the Digital Technology Supercluster, which accelerates the development and adoption of digital skilling programs and real world technologies that are keeping Canadians healthy, addressing climate change, and transforming businesses to drive productivity, recovery and growth.
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I’m also encouraged by the launch of the federal 50-30 Challenge, which is meant to increase the workplace participation of diverse groups, and by last year’s $1.5-billion investment in the Workforce Development Agreements, which will help Canadians in under-represented groups quickly access supports to re-enter the workforce.
This can’t happen overnight, and many of the effects won’t be felt for years. No one could have predicted exactly how many recording studios and TV production jobs would have arisen from Canadian content regulations, and no one should predict how many Wattpads will come from deeper, more interconnected clusters.
But they will eventually produce them if we build them – that much is within our control and our grasp. We need to keep working together to create the conditions for success.
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by Bill Tam. Originally published on Policy Options
January 26, 2022
This <a target="_blank" href="">article</a> first appeared on <a target="_blank" href="">Policy Options</a> and is republished here under a Creative Commons license.
You are welcome to republish this Policy Options article online or in print periodicals, under a Creative Commons/No Derivatives licence.
You are welcome to republish this Policy Options article online or in print periodicals, under a Creative Commons/No Derivatives licence.

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