Canada's economy has been put on notice.
Fallout from the measures to contain the COVID-19 pandemic have had a disproportionate impact on small businesses. As a country where 98% of businesses are small- and medium-sized enterprises, we’ll need to harness the savviness of our shrewdest start-ups to compete and innovate in a post-COVID economy.
David Skok is on the frontlines of that effort. He’s the founder and editor-in-chief of The Logic, a two-year-old digital publication focused on the innovation economy. His small team of journalists reports on companies and creators, as well as the policies driving transformational change in our country. He joined the RBC Disruptors podcast to talk about how Canada, a small country of relatively small businesses, can excel in a big world dominated by big platforms.
“We are not a nation that has not created great innovations on the world stage,” he said. Shopify, which recently became Canada’s most valuable company, is a prime example.
“Our challenge has been keeping them there.”
Skok founded his media startup to facilitate conversations on how to clear barriers to innovation in Canada – something he’s noticed as both an immigrant from South Africa and a former expat in the U.S.
“I watched my dad struggle through a lot of those challenges of regulatory red tape and the status quo,” he said.
Cultural inertia might be why some organizations find it hard to change. It’s built into the process and over time, solidifies the status quo. That, said Skok, makes it hard for new ideas to grow and be heard.
“As an entrepreneur, it would be really nice if you felt like the ball was rolling downhill with you and that you were supported and that you didn’t have to fight at every turn to get things done,” he said.
Supporters of Sidewalk Labs’ now-abandoned Quayside Project, a plan to develop a “smart city” on the Toronto waterfront, might agree. The project was mired in years-long controversy over issues of privacy, government selection processes, and foreign ownership of Canadian property. Last year, it agreed to limit the scope of its expansive project proposal after negotiations with Waterfront Toronto, a government agency overseeing the city’s lakeshore development. Last week, it pulled the plug on the project.
Skok said the Sidewalk Labs exit raises questions around whether Canadians are able to innovate and better the country by building for ourselves or need support from elsewhere.
“Ultimately, Canadians building Canadian companies for the world should take more inspiration – or will take more inspiration – from the Shopifys, who can do it on their terms.”
So, what will does Canada need to compete against the big players in a post-COVID world?
Canada is a great base and an excellent home market for entrepreneurs, but we’re too small for growth. Every Canadian growth company needs to see itself as a global company.
2. Talent and capital.
Innovators need to think globally about talent and capital. If you want to take on the world, you need to be part of the world. And that means ensuring the world feels welcome here through immigration and foreign investment for small firms as well as big.
Governments, especially, need to get more strategic with their buying power to support Canadian innovators. And do more to protect Canadian intellectual property.
We need to make tougher choices on where we can excel. It may be foolish to try to pick winners, but we need to spot the rising stars and get behind them.
“My hope is that in the midst of the crisis, there were ideas and companies that were given the supports they needed to become the next Amazon or the next Shopify,” Skok said.
We have to challenge ourselves. If we’re uncritical of each other, we’ll miss opportunities to improve and we won’t see our blind spots. It’s why we need strong independent national media to hold us all to account, including innovators and entrepreneurs.
The crisis is scarring parts of our society, and Canada’s place in the world might be smaller. We’re going to have to rely a lot more on innovation to gain the scale that we don’t naturally have on our own.
John Stackhouse is a nationally bestselling author and one of Canada’s leading voices on innovation and economic disruption. He is senior vice-president in the Office of the CEO at Royal Bank of Canada, leading the organization’s research and thought leadership on economic, technological and social change. Previously, he was editor-in-chief of the Globe and Mail and editor of Report on Business. He is a senior fellow at the C.D. Howe Institute and the Munk School of Global Affairs and Public Policy and sits on the boards of Queen’s University, the Aga Khan Foundation of Canada and the Literary Review of Canada. His latest book, "Planet Canada: How Our Expats Are Shaping the Future", explores the untapped resource of the millions of Canadians who don’t live here but exert their influence from afar.
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