TORONTO — Canada has only to look at the movies to see how the local IT industry can build an innovative, competitive environment, a former Onvia executive told the Smart Toronto Technology Alliance Monday.
Leonard Brody, discussed
Canada’s potential in the new economy as part of the launch of Innovation Nation: Canadian Leadership From Java To Jurassic Park, which he co-authored. The book includes profiles of several Canadian success stories, including the founders of Research in Motion, Red Hat Software’s Bob Young and Lucent Canada’s Carol Stephenson. Brody said the book is intended to show the world what statistics alone may not: that Canada is already a global IT innovator.
“”Canada is not good about talking about itself, and to some extent, we’ve paid the price,”” said Brody. “”When you survey attitudes about this country, Canada is about anything except business success.
Brody, who is also CEO of private equity research firm Ipreo, pointed to the Canadian film industry’s success as a model for IT firms. “”We had the actors’ union threatening to strike in order to keep film production work out of Canada,”” he said. “”We have to replicate the success of the film industry as a competitive benchmark for the rest of the world.””
According to last year’s Global Entrepreneurial Monitor study, Canadians started more firms per capita than any other country in the world. While many of them may start here, however, those with aggressive growth plans must have important decisions on where to invest their resources. Brody used Onvia the electronic retailer for which he ran the Canadian operations, as an example. Onvia launched about six years ago and had Canada’s largest ever initial public offering before running into financial troubles. Since then it sold most of its Canadian operations to BellZinc.ca while focusing its U.S. operations around the government market.
“”One of the biggest mistakes we made at Onvia was putting all our development and engineering in Seattle, even though we could have gotten people here for half the price and probably twice the education,”” he said. “”If you ask Mark Pickett, the former CEO, he’d tell you we probably lost US$40 million over that.””
Other companies aren’t making that mistake, Brody added. IBM, for instance, continues to keep a disproportionately large amount of executives stationed in Canada, he said, while other firms are keeping the local operations of acquired Canadian assets once they conduct a cost-benefit analysis.
The Canadian government is already taking steps to make sure Canada has a favourable environment to attract investment, Brody said. Corporate taxes have been mandated to fall below U.S. levels within five years, he said, while the capital gains tax is now lower than the U.S. “”It’s cheaper to start a software business in Canada than in Des Moines, Iowa,”” Brody said.
All proceeds from the purchase of Innovation Nation will go towards a scholarship fund at Ryerson Polytechnic University to help other young entrepreneurs, Brody said.