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Writer's pictureDan Herman

How Canada can nurture growth through tech and innovation

Updated: Apr 30, 2020

Published in the Globe and Mail. Co-authored with David Fransen, Chair of the Waterloo Innovation Summit --


Returning to 24 Sussex Drive on the promise of real change, prime-minister-designate Justin Trudeau will be under pressure to deliver quickly. On the economy, this means implementing immediate and meaningful changes to Canada's economic and innovation strategies. To overcome the realities of slow growth, depressed resource prices and a generally lethargic business environment, he cannot rely on infrastructure spending and tax cuts alone.

Canada's innovation policy approach cannot merely match what our competitors are doing; it must exceed them. One area in particular has proven critical. Globally, countries and communities that develop regionally based innovation ecosystems are the ones that are winning. By nurturing the proliferation of startups, and supporting their transformation into high-growth firms, these regions are enjoying disproportionate job and income growth.

Unfortunately, on this front, Canada is not just lagging, but falling behind.

The recent Waterloo Innovation Summit gathered 280 leaders to focus on one question: What are the best ways to nurture high growth through innovation ecosystems? The following are seven themes, or recommended areas for action, that emerged during three days of discussion.


Invest in necessary infrastructure and connectivity

Fully developing a region's innovation ecosystem means prioritizing the rapid, instinctive movement of talent, capital and ideas. The dramatic need for improved connectivity in the Toronto-Waterloo Region corridor is just one example of where demonstrated economic potential requires more investment.

Expand the focus beyond startups to scale-ups

Recognizing the significant contribution that high-growth companies make to employment and economic prosperity, jurisdictions around the world are focusing increasing attention on the "art of scale." Canada, a clear underachiever, must concentrate resources, mentorship and programming in this area as a necessary next step in the evolution of its innovation ecosystem.

Extract better ecosystem data

There isn't enough consistent, standardized data related to significant public investment in startup-assistance organizations, venture-capital funds and other systems of public support, and that undermines our ability to manage these areas intelligently. This gap needs to be addressed through massive reinvestment in data collection and analysis.

Recruit and develop high-tech management talent

Among the most significant challenges facing high-growth firms is a dearth of talented managers who have experience in dealing with the challenges of global scale. While developing this talent organically is a must, firms that currently demonstrate the clear potential to become global powerhouses cannot afford to wait. Canada's private- and public-sector leaders must consider how this talent can best be identified and recruited.

Build effective research-and-development support systems

If regionally based innovation ecosystems are where the most important economic growth happens, policy-makers must move quickly to retool their R&D support policies. Canada's chronic underperformance with respect to business expenditure on R&D and gross expenditure on R&D means we need to refocus our incentives on outcomes.

Better enable and support industry-academic partnerships

Large incumbent firms have easy access to university-based research partnerships. Small- and medium-sized enterprises, on the other hand, struggle to gain similar access. Funding for industry-relevant problem labs structured akin to InnoCentive's crowd-sourced problem-solving platform is a necessary next step.

Pursue disruption

Initiatives such as Peter Diamandis's X-Prize Foundation and Elon Musk's Hyperloop are examples of how the world's best and brightest can be induced to take on seemingly impossible challenges. The dynamics set in train by these competitions generate teams and technologies that simply would not have existed otherwise.

How can Canada's public and private sectors work together to generate sufficient scale to create this type of aspirational culture?

These are some ideas; there are certainly others. Developing a next generation of internationally literate graduates who understand global growth markets is one of them. So, too, is the incentivization of more angel-investor activity. And finally, better co-ordination across levels of government is a necessity for the above recommendations to take hold in a meaningful fashion.

Canadians proudly remember the Vancouver Olympics, where our athletes succeeded to an unprecedented degree under the uncharacteristically bold Own the Podium program. Can we own the podium in innovation and competitiveness? Potentially, yes. Canada has enormous resources – physical, intellectual, human, financial. Whether they are marshalled to provide world-class performance depends on one quality more than any other: leadership.


The decade under Stephen Harper's Conservatives represented the promise and delivery of lower taxes and less government. Expectations were lowered and results followed accordingly.

Mr. Trudeau's mantra of real change is a welcome start, but it requires immediate action. The world won't wait. Neither should we.

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