Google Canada managing director Sam Sebastian, left, and Ryerson DMZ executive director Abdullah Snobar, right, discuss Canada's opportunity to be a digital transformation leader during an event sponsored by the Toronto Region Board of Trade on Feb. 28.

Published: March 1st, 2017

TORONTO – Canada is in the best position it’s ever been to become a world leader in technological innovation, but if its corporate, government, and educational leaders fail to seize the moment they risk being left behind, the directors of Google Canada and Ryerson DMZ said during a presentation Tuesday.

During a Feb. 28 event at the Toronto Region Board of Trade, Ryerson DMZ executive director Abdullah Snobar interviewed Google Canada managing director Sam Sebastian, who argued that to seize its moment Canada’s tech industry needs to grow exponentially; focus on the regions and sectors with the greatest momentum; and ensure that today’s elementary, middle, and secondary school students are exposed to memorable STEM (Science, Technology, Engineering, and Math) experiences before entering university.

“We’re actually in a pretty good place,” Sebastian said. “There are many other areas around the world who aren’t focused nearly as much as Canada is, Toronto is, KW (Kitchener-Waterloo) is, other places around this country are, around innovation and having as much good momentum as we have right now.”

As Snobar was more than pleased to point out, since its creation seven years ago the DMZ alone has helped build more than 280 companies, which have collectively created more than 2700 jobs and raised more than $280 million.

Yet if Canada is to become a leader in technological innovation, those numbers must only be the beginning, he and Sebastian said.

As the coming wave of digital transformation washes over Canadian businesses, a far greater percentage of them will join the tech sphere, whether their leaders are ready or not.

“In the next 10 to 15 years, no matter what type of organization or company you’re in, you’ll probably consider yourself a software company,” Sebastian said. “Any traditional company right now probably has more software underlying its infrastructure than ever before.”

And the companies that don’t have a sense of how that infrastructure works, or how to navigate an environment that requires them to attract and retain the best talent capable of operating it, are going to find themselves out of business, he said.

“The world needs a lot more of Canada right now, and I think we’re poised to really have a big impact,” he said. “But if we don’t seize the moment and focus our efforts now, we risk being left behind.”

Why our first goal should be exponential growth

The good news, Sebastian said, is that many of the elements needed for Canada to embrace digital innovation are already in place: the topic is a key focus at each of Canada’s leading banks, for example, to say nothing of startup incubators such as the DMZ, private support from tech giants such as IBM Corp., world-class universities in Toronto and Waterloo, and government support in the form of an “innovation agenda.”

“We have incredibly ambitious folks that are starting companies that are trying to change the world,” he said.

Yet when Canadians think of their business leaders, it’s rarely the likes of Kik Interactive CEO Ted Livingston, or Thalmic Labs, Sebastian said – or even Hootsuite Media Inc.’s Ryan Holmes or Shopify Inc.’s Tobi Lütke.

Instead, a typical Canadian mentality is to emulate U.S. leaders such as Mark Zuckerberg or Google’s own Larry Page by growing their business to a national scale… and then stopping at the Canadian border.

“We have about one million small- and medium-sized businesses in this country, and only half have a website. Only one in 20 are set up to export their goods and services around the world,” Sebastian told ITBusiness.ca. “There are 35 million people in Canada, and three billion online. Canada can’t be your market. The world must be your market.”

That, Sebastian added, is an example of exponential thinking – and Canada, with its talent ecosystem, legacy of innovation, and – especially compared to Donald Trump’s America – diversity and sense of community, needs to think exponentially if it wants to effectively seize every advantage it has to offer.

After Shopify went public, for example, Lütke and COO Harley Finkelstein visited numerous other businesses that were scaling up their organizations and explained how an IPO worked, an outreach effort that would have been unheard of in Silicon Valley, Sebastian – himself an American – said.

“I think it’s in Canadians’ fabric that if other folks around us win, that Canada wins, because we’re lifting everyone else up,” he said. “That is not American. That is not Silicon Valley. Silicon Valley is, ‘I’m going to charge in as hard as I possibly can, and screw everyone else around me.”

“The magic of what’s happening in Kitchener-Waterloo… is the fact that as these companies built up, they helped one another, and… frankly, I think that’s the only way Canada can continue to deliver outsize results,” he said.

Feed your winners

Google has a mantra: Feed the winners, starve your losers. And while Canada doesn’t need to carry it that far, it doesn’t need to spread its support so thin that it’s supporting 500 mediocre companies at the expense of 25 exceptional ones, Sebastian said.

“We need to focus on the areas that have momentum,” he told ITBusiness.ca. “Artificial intelligence. Corridors like Toronto and Kitchener-Waterloo. Incubators like the DMZ. We need to feed those winners, because we don’t necessarily have the scale to invest everywhere. Identifying the areas of momentum and focusing might give us a better chance to succeed on the world stage.”

Speaking with ITBusiness.ca after their presentation, the DMZ’s Snobar echoed Sebastian’s assessment.

“Canada is punching well above its weight in terms of innovation and entrepreneurship, but in terms of seizing it, we have to make sure that we don’t stay complacent,” he said.

And how can our tech leaders stay ahead of the game? By always challenging themselves to defy the status quo and disrupting whatever industries they choose, but also by focusing on their strengths, Snobar said.

Don’t forget your talent pipeline

The human resources nightmare that keeps Sebastian up at night is not the brain drain or skills gap, but a persistent fear that Canada’s students aren’t introduced to STEM education early enough.

“My kids are 14 and 13, and they haven’t had nearly the exposure to science, technology, engineering, and math that they should have, especially the last three years here in Canada, but even before that in the U.S.,” he said. “Ninety-eight per cent of our engineers here in Canada were exposed to computer science before they got to university – their dad bought them their first computer, or they won a science fair. They had these moments as they were growing up… that ignited a passion in them, and they followed that.”

“We have to figure out how to create more of those moments before folks get to university,” he continued. “Because by then, frankly, it’s too late.”

By contrast, Sebastian said, the dangers presented by the talent gap – 60 per cent of Google Canada’s 1000 engineers come from the University of Waterloo, which globally is Google’s favourite university to recruit from, he noted, and another 20 per cent come from the University of Toronto – and the brain drain, which he said recently has been met with an exodus of Canadian-born engineers leaving Silicon Valley for the country they grew up in, are highly overrated.

To address the problem, he said, Google has collaborated with non-profit organization Actua to teach more than 125,000 Canadians across the country how to code, with a special focus on young girls and indigenous communities.

“There’s a million other really cool organizations like that outside schools, which is a good start, but if we can figure out how to get that inside the curriculum,” Sebastian began, before cutting himself off.

“There’s lots of different land mines waiting for that conversation,” he acknowledged. “But there have been lots of other countries around the world that have shown how it can work. I think we need to do the same.”

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