An Article on the State of Entrepreneurial Endeavours in Canada
October 27th, 2015
As Jim Balsillie, co-founder of Research in Motion (now Blackberry Ltd.) suggests, Canadian businesses are ill-equipped for global competition. Canadian businesses are certainly not wanting for innovative ideas: Canada’s current economy is simply at a competitive disadvantage compared to other low-cost alternatives, such as China or Mexico. Is now the time to start a new business in Canada?
There is plenty of money available that people are willing to invest into successfully commercialized ideas. The economy is essential for the success of any country, which is why so many areas of the world offer government funding to help businesses succeed with their innovative ideas. Without the right environment for success, however, the idea stalls and there can be no growth.
Ideas are not tangible assets: their ownership is a fluctuating concept, and foreign courts—not local ones—usually decide on their strengths (or weaknesses). This includes the United States, which represents a major market for technological goods and services. Canada does not possess the same degree of control over its own markets, or over the fate of its entrepreneurs.
Countries leading the world with innovative ideas also foster their entrepreneurs—because the entrepreneurs embody that innovation. Nothing changes until we have the proper infrastructure to support entrepreneurs on a global scale; opening up a business to global growth is the best way to encourage prosperity and foster success.
What’s wrong with Canada’s current entrepreneurial environment?
Canada’s free trade agreements with the U.S. and the North American free-trade agreement (NAFTA) certainly help tangible resources to flow across borders. This helps for oil or foodstuffs, but this does not benefit the movement of technology products. More importantly, these free-trade agreements fail to account for the ownership of ideas. Ideas fuel entrepreneurial start-ups, providing the basis for profitable commercialization. Without an economic environment supporting the flow and transmission of ideas, entrepreneurs invariably suffer.
As of right now, policies do not work on behalf of entrepreneurs. The FTA and NAFTA include little about intellectual property rights, which is the cornerstone of an innovation economy. An indigenous innovation economy does not happen accidentally: it requires a concerted effort by government officials who are willing to introduce measures that help entrepreneurs, not hinder them. Canadian entrepreneurs cannot do this alone. They need the support of their MP’s and their federal leader.
They need this support because Canada currently lacks the policies for an innovative economy, so there is a significant lack in growth amongst start-ups and entrepreneurs. Without a domestic innovation lobby working on behalf of Canadian ideas, Canadian politicians may play into a system that lets international companies copy Canadian ideas without penalty. U.S courts essentially hold the keys to intellectual property rights, which is not advantageous for Canadian businesses (or anyone else in the world, for that matter).
Improvements for a better future
You cannot blindly throw money into the wind and expect the economy to work itself out. While further government funding opportunities are certainly a boon, additional investments require a shift in strategy.
They government should negotiate to become a member of the Unified Patent Court, placing Canada on equal footing with its European counterparts. Within Canada, entrepreneurs require greater protection from external forces (especially American ones) muscling into Canadian waters to squash new patent ideas with vague and unsubstantiated claims of “patent infringement.” How can ideas thrive in an environment in which they cannot survive?
Encouraging further collaborations is also a necessary step. Working with industries not only in Canada, but also across the globe, helps to transmit ideas and secure business partners. Research universities also play an important roll in this consideration. Both the Canadian government and Canadian universities require a more proactive role to promote or create these connections.
And, most importantly, Canadian entrepreneurs require a voice in Canadian politics. To find this voice, they need forums to interact with policy makers to advance the economic interests of entrepreneurs to the benefit of the country as a whole. The U.S. have these forums, so why don’t we?
Companies that refuse to change inevitably fail. If you apply this logic on a larger scale, current innovation-centric policies and investments will also fail the companies they purportedly represent if they continue at the same rate. Balsillie says that “we have a duty to our next generation of entrepreneurs—those with the potential to build great companies and employ vast numbers of Canadians—to build a commercialization ecosystem that will help them grow and scale up. Not merely to compete in the global innovation economy, but to win.”
A new change in leadership for Canada might help spur this along: the newly elected Liberals plan to invest $600 million over three years for the benefit of business incubators and accelerators, research facilities, and in financing. They also promised $100 million more in annual contributions for an industrial research assistance program, and $200 million a year toward specific clean technology and innovation sectors. Time will tell if the Liberals follow through on their promises.
Providing government funding for businesses is an essential first step, but the current economic environment in Canada is not as friendly as it should be towards entrepreneurs hoping to succeed by their own volition. And they shouldn’t have to succeed alone, either: cooperation and collaboration are the cornerstones of the world’s most innovative societies. It is high time that Canada gets this memo.