David MacDonald is a man on a mission - to save the Canadian high-technology industry. The president and chief executive officer of Softchoice Corp., a Toronto technology distribution company, is alarmed at the lack of large, internationally active Canadian tech firms. As chairman of the Information Technology Association of Canada, Mr. MacDonald, 52, is spearheading a conference in Toronto this week that focuses on the growth challenges of tech entrepreneurs.
Is the problem that Canada doesn't have enough technology entrepreneurs?
We don't have enough in terms of being successful in growing their companies. We risk having Canada becoming a resource-based economy again. We're not growing enough of our information technology industry; we're not growing enough of our knowledge industries. The strong growth in the resource industry is outweighing our ability to compete on a worldwide basis in a sustained way.
I thought there were great technological things going on in the energy industry.
I think you're right. This time around, the Albertans seem to be very focused on taking this to the next level. That is a very good thing. But we need to take this into products and strategies that become global companies. Too often Canadians sell out before they become titans.
So the problem is we can't grow to any scale?
We clearly are struggling with that. How many billion-dollar technology companies are there in Canada? Obviously, we have Nortel but other than that, the only one growing at any pace at all is RIM. It's a great success story, but we used to have a strong group of technology companies growing very successfully in Ottawa. We just don't have that any more. We're struggling both in the software sector and the microelectronics sector to grow companies with worldwide brand names.
Canadians have a tremendous advantage because we have the most diverse population in the world. But we seem to sell out before we create the kind of companies that have worldwide impact.
We just need to block these sellouts, don't we?
That would be the wrong way. What we need to do is look at the venture capital community, at the tax structures, at the business community in general, and how we provide the environment to support the development of titans.
I think it is within our own capacity to do that.
So why aren't you off running your company, instead of working for other people?
I view myself as a leader of a company that is growing in a very entrepreneurial way. We've gone from $250-million in revenue to $1.2-billion in seven years and we think we can be a dominant company in our space in North America.
Is there enough venture capital in Canada?
In the U.S., there are way more venture capitalists coming out of the technology industry. If you look at the Silicon Valley venture capitalists, they have been involved with many, many successful startups, and they continue to be involved. We in Canada tend to have venture capitalists who are mostly bankers and they generally have not had the experience driving the growth of entrepreneurial companies.
So we need venture capitalists with a lot of money from selling their own companies?
That would be one source of candidates. In the conference, we will focus on the model in Silicon Valley. Take the guys who started [online payments company] PayPal. The web of companies they've started subsequent to PayPal has been fantastic. They keep going on and on. We need to build that kind of culture into the Canadian economy so people don't go to the beach once they've sold out.
Have we seen the hollowing out of the tech sector?
