A group of Canada’s digital economy luminaries say the country needs to double the number of billion-dollar digital firms here by 2025, in a new report released Tuesday.
The Digital Industries Economic Strategy Table was gathered by the Liberal government for the first time last November. Its members include Shopify founder Tobias Lütke as the chair, Wattpad founder Allen Lau, Element AI co-founder Jean-François Gagné, and co-founder of Canada Learning Code Melissa Sariffodeen, just to name a few.
According to reports by The Logic, which obtained an analysis presented to the group, the government painted a picture of Canada’s tech sector falling behind the rest of the world. Canada faces many challenges in doubling the number of businesses earning $1 billion or more annual revenue from the current 13 to the target of 26 in just seven years. The Digital Industries report lays them out:
- There’s a lack of top executive talent that knows how to scale up businesses and a lack of skilled STEM talent in Canada.
- Canadian businesses and government are too slow to adopt technology.
- Affordable, reliable, high-speed internet access is not universally available.
More than just scaling several firms to be in the billion-dollar range, the report wants Canada to triple the number of firms earning $100 million in annual revenue from 58 to 172 by 2025.
So how can Canada, a country that is more economically inclined to export its valued natural resources such as beaver pelts and oil, harness the innovation that it’s creating in the digital space and profit from it? These digital founders have four recommendations to help cross that chasm.
Here’s a brief summary of each recommendation that’s laid out in the report:
- Own the podium: Scale up Canadian businesses. The government is currently focused too much on entrepreneurs and small to mid-sized enterprises, awarding better tax credits to smaller firms through SR&ED. That tax credit program needs to be modernized to include commercialization, not just research. Canada should also create a “hypergrowth passport pilot program” for digital firms with more than 40 per cent year-over-year revenue growth past $1 million.
- Attract, retain and support skilled talent. To attract more software engineers and top executives, Canada should launch the Digital Skills and Talent Collaboration Hub. A mix of private sector representatives and academic members to work on a range of training initiatives and data-tracking practices.
- Transform Canada into a digital society. Canadians need to see themselves as a nation of innovators that applauds risk and creativity. All Canadians need access to internet that is both affordable and fast. Canada should rank in the top 10 globally for interest speeds, and the global average internet speed should not cost more than $40 per month to receive.
- Leverage IP and promote the value of data. Artificial intelligence leadership should focus on commercialization rather than just research. A national, industry-led advisory council dubbed CanAI should be created with a mandate to advance commercialization of AI and data analytics.
I’ve spent a lot of time with industry experts this past year thinking about how Canada can become a digital leader. Today, we published a report with recommendations to the federal government on how to get there. The full report: https://t.co/6RnSheOr6X. Here's the TLDR;
— Tobi Lütke (@tobi) September 25, 2018
The Canadian Internet Registration Authority (CIRA), the body that controls the .ca top level domain, issued a statement of support for the report.
“CIRA is pleased to see Canada’s technology leaders reinforce the urgent need for fast, accessible, secure internet access for all Canadians. Canada’s digital economy cannot thrive without strong infrastructure. As part of CIRA’s goal to build a better online Canada, we support initiatives that strengthen Canada’s internet infrastructure and connect all Canadians to the social, economic and cultural opportunities the internet provides,” said Byron Holland, president and CEO of CIRA.
CIRA has initiatives underway to help improve access to the Internet in Canada, including organizaing an internet exchange point in Iqaluit.