Adam Felesky is chief executive officer of Portag3 Ventures, a Toronto-based early-stage investor dedicated to backing the next generation of global financial services companies.
I am a recovering entrepreneur, a proud Canadian and CEO of a global fintech fund with offices in four countries across three continents.
In my role, I get to travel the world and meet the next generation of entrepreneurs who are reshaping our world more quickly than we could imagine. Advancements in technology combined with the reduction of the cost to innovate is enabling the next Steve Jobs to be just as easily be based in Warsaw, Poland, as Moose Jaw, Sask.
I have also had the privilege to witness the mobilization and co-ordination of some countries to make innovation central to their policy-making agenda. Britain, Singapore, Australia and others are vigorously pursuing policies to favour growth and productivity. What is striking is how much of a catalyst these policies have been. In my industry, many of the first fintech “unicorns” (startups valued at more than $1-billion) are now based in Europe on the back of the most aggressive policy reforms in the world, such as Open Banking and the General Data Protection Regulation (GDPR) on data-privacy management. Many of the scaled offspring from these policies will be coming soon to compete in Canada, too.
While others mobilize, we Canadians are stuck in the muck of a fragmented, multijurisdictional regulatory environment with little co-ordination. This problem is only made worse by increasing regionalism, which results in a peanut-butter spread of federal investment that is embarrassingly thin compared to the multibillions being spent in other countries. China, for example, is funnelling billions into artificial intelligence to make it a world leader in that space.
Also holding us back is our experience in the previous financial crisis during which our big banks stepped in to “protect us.” This traumatic period created a strong bias to conservatism and the status quo in financial services. This bias protects our leading financial institutions from the kind of transformational action that is required. Among Group of Seven countries, we are near the bottom in terms of fintech adoption and partnership.
The alarm bell must be sounded: If we don’t act quickly, we will be the future importers of innovation rather than the creators of it. If we don’t stoke the fires of domestic competition, our incumbent organizations will risk being disrupted – and not by other Canadians. And if we don’t unite nationally, we will not have the capital resources to make the focused investments required to compete.
Our country has been built on the backs of great entrepreneurs from coast to coast. If we are going to compete in tomorrow’s economy, we need to foster the next generation of local leaders – and quickly.
To do this, we must unify and understand that petty regionalism is beyond myopic – it is a cancer hampering our growth and future competitiveness.
We need to take several actions immediately:
First, we must establish a national entrepreneurship office that ensures we are identifying emerging leaders, companies and industries that are differentiating us in the global market and ensure concentrated support and investment locally and support abroad.
Second, we should create a national regulatory office that will co-ordinate policy and oversight among regulatory bodies both federally and provincially. Entrepreneurs must be allowed to focus their limited capital on building the next best global product and services – not on lawyers navigating our fragmented domestic web of laws and regulations.
Third, let’s establish an advisory board of leaders from the private and public sectors to advise on how we produce more local talent for our Canadian companies to compete on the global stage. The need goes beyond churning out more computer engineers. We must create home-grown sales gurus, marketing wizards, the next growth hackers, and the leading blockchain architects.
Last, but not least, we need substantial policy incentives for our incumbents to make the investments required to address their own significant infrastructure debts. This is a widespread Canadian problem given years of underinvestment. We also need to allow these institutions to invest in some of these enabling technology companies that can be part of their transformation solution.
The future globally successful Canadian entrepreneur needs to embody one-part Albertan risk-taking, one-part Quebec creativity and one-part Ontario pragmatism. If they don’t, we will be left behind with no more than a rodeo, beaver tails, and tall free-standing towers as beacons of the good old days. Without a conscious national policy addressing our current shortcomings, I fear this is what we will become.