This is yet another excellent article questioning the Canadian tech industry’s appreciation of its significant deficiencies and challenges. It reflects my own view after much research and many interviews. It is also the view of UoT Professor Richard Florida who published a similar article in the Globe & Mail recently. Venture capital is anemic, but many also believe that there is a lack of scale-up management talent. Another factor is deeply-embedded Canadian conservatism, as evidenced by the bizarre entry of high street banks’ debt offerings to entrepreneurs.
French President Emmanuel Macron’s vow to make France a ‘start-up nation’ amid the uncertainty over Brexit is raising the question of whether Paris could supplant London as the capital of European tech. Since his election, Macron has wooed tech entrepreneurs with a string of initiatives in the form of lavish tax breaks, subsidies, and credits for research. In March 2018, he promised to invest €1.5 billion into artificial intelligence research through 2022. Some of these initiatives, in addition to Macron’s dynamism, have lured British tech companies who are looking to gain a foothold in Europe.
Welcome to Mayo615’s Odyssey to France and the first of our Tuesday weekly updates. We invite you to subscribe to our YouTube Channel and follow our weekly updates. In this Week One update we will focus on my first Big Idea, and how I achieved it. I will also discuss my three most important key takeaways from that experience. We hope that you find this video helpful in achieving your own Big Ideas and goals. So here we go.
Years ago now Google quietly announced its “Loon Balloon Project” in New Zealand. The objective was to launch high altitude balloons that could potentially float over areas of the globe that did not yet have Internet access. The tech press predicted that the idea was “loony” indeed, though some called it “crazy cool.” Google has since also dabbled with the idea of low earth orbit satellites to achieve the same goal. With the rise of SpaceX, this seems an even more interesting technological approach, though other firms in the 1990s lost large amounts of money and failed. A modest aerospace company and a subsidiary of Airbus in Toulouse France is manufacturing low-orbit internet access satellites, hoping to launch as many as 650 such satellites. The idea that is captivating me is the potential for space-based Internet access to potentially provide an alternative to growing political and corporate control and Balkanization of the Internet.
In one of the more bizarre recent articles on the state of the Canadian venture investment market, The Globe & Mail offered this story of the entry of Canadian commercial banks like CIBC, RBC and TD into the world of entrepreneurial finance. Not more than a few weeks ago, Toronto University Professor Richard Florida also published an opinion piece in the Globe & Mail, in sharp contrast which is entitled “Canada is losing the global innovation race”, describing the long term decline of Canadian venture capital and decades of poor investment in basic R&D compared to its other OECD industrialized nations. Recently, a colleague in Canadian venture capital told me of his retirement, citing the enormous difficulty his firm had raising capital from the Canadian financial industry. This is prima facie evidence of how disconnected Canada is from the reality of entrepreneurial finance and venture capital. The Canadian financial industry mindset is Problem One. Name another major entrepreneurial ecosystem that operates like this.
Five years ago, I wrote a post on this blog disparaging the state of the Internet of Things/home automation market as a “Tower of Proprietary Babble.” Vendors of many different home and industrial product offerings were literally speaking different languages, making their products inoperable with other complementary products from other vendors. The market was being constrained by its immaturity and a failure to grasp the importance of open standards. A 2017 Verizon report concluded that “an absence of industry-wide standards…represented greater than 50% of executives concerns about IoT. Today I can report that finally, the solutions and technologies are beginning to come together, albeit still slowly.
I was very interested yesterday to read the article in the Globe & Mail by University of Toronto Professor Richard Florida, and Ian Hathaway, Research Director for the Center for American Entrepreneurship, and Senior Fellow at the Brookings Institute. The article by Florida and Hathaway draws the same conclusions as my research, providing even more precise data to support their disturbing conclusions. It is not hard to find many additional articles on these issues. Ironically, also yesterday, a LinkedIn connection shared a post by Sciences, Innovation, and Economic Development Canada with a very upbeat, positive assessment of venture capital for startups in Canada. This is the essence of the problem. Since I came to Canada years ago now, I have seen a pollyannaish state of denial about the true situation for entrepreneurship, immigration policy, and the lack of “smart” venture capital for Canadian startups. No amount of counter-evidence has changed this mistaken rosy outlook. Without a recognition of these problems, nothing will change.