Federal Minister of State for Science and Technology Gary Goodyear stopped in to talk about something he says is critical for every entrepreneur, no matter how long they’ve been running the business and what type of business they’re in: R&D.
Over the last decade, Canada’s productivity and innovation capacity have been declining. “Experts will tell you that’s directly related to declining business expenditures on R&D,” says Goodyear.
It’s complicated problem, one for which government and the private sector share responsibility. At the base of the problem, says Goodyear, is Canada’s risk-averse nature. Why do so many Canadian tech companies seek out funding from Silicon Valley? The U.S. is more willing to fund risk-takers. Goodyear says studies have shown that CEOs in Canada aren’t as comfortable with risk as their U.S. counterparts.
Canada’s banks aren’t so willing to take on risk, either. “On the one hand, Canada’s economy is doing well party thanks to our banks,” says Goodyear. “Where we fall behind is our innovative capacity; our ability to mitigate risk.”
The federal government is looking at the entire ecosystem and potentially making some fundamental changes. Part of solution may be to reconsider Canada’s bankruptcy policies, says Goodyear.
But along with those systematic changes, the cultural issues need to be addressed.
“We need to go into grade schools and discuss what it means to take risks and fail,” says Goodyear.
As for those already running businesses, Goodyear says they need to understand the importance of cutting-edge tech to their company. “About 60-70% of businesses in Canada think we’re talking about the other guy, not them. Well we’re not,” says Goodyear. “Whether you’re a hair salon or a multinational automotive company, if you’re doing anything the same way as three years ago—if you’re using the same material, if you’re assembling a part the same way—you’re probably already in trouble. The world has moved that fast. The development of new technologies is very fast and in Canada we’re very slow at adopting new technologies.”