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OMERS Ventures CEO John Ruffolo: ‘We’re starting to see our productivity slide down in the wrong direction.’ (Fernando Morales/The Globe and Mail)
OMERS Ventures CEO John Ruffolo: ‘We’re starting to see our productivity slide down in the wrong direction.’ (Fernando Morales/The Globe and Mail)

Canada Competes

How Canada’s talent can compete with Silicon Valley Add to ...

They are one of the highest-wage countries in the world, yet they’re the biggest exporter in Europe, and they focused in on that high-end manufacturing. This is the issue why you then hear Canada has low productivity. If we focus on the manufacturing that requires big investments and technological equipment, that is far more productive, our productivity goes up. We are not reinvesting in that equipment. We’re continuing to just keep on with the status quo, and we’re starting to see our productivity slide down in the wrong direction. It gives me massive anxiety.

What about car manufacturing?

Car manufacturing is a good question. Do we continue with the same? Or do we say, we’re going to focus in on hybrid vehicles? We could become the world leader in this one space, and drop the broadness of manufacturing for manufacturing’s sake. What concerns me is that the U.S. is seeing those jobs lost to Asia. And when push comes to shove, and the U.S. has to make a decision on shutting down plants, do they shut them down in Canada or in the United States? If we’re not making those investments in the Canadian plants, they’re going to be shutting down the Canadian plants.

What should Canada do in terms of public policy to create more and better startups?

The federal government has been very supportive. They’ve been trying to help identify, along with the private sector, areas that they could stimulate.

And one of the areas that they announced in the budget was providing more access to capital for those. The government allocated $400-million. That’s a good example of the government actually listening.

It is very hard, to find that right balance. I don’t think the government should be making investment decisions, but I think they need to help create a level playing field so that Canadian companies have a chance to compete globally. This fund is going to be welcome.

But the bigger one they’re working on – and I think it’s is going to be far more effective – is looking at immigration policy. They’re working on two immigration policies that I think could be game-changing. One is called a startup visa, and the other one is called the immigration investor program.

Both are designed to get foreign capital into Canadian technology companies and to get more foreign talent here working in Canadian technology companies. One of Canada’s assets is its diversity of people. Now this to me is really smart. … Talent is the No. 1 issue for companies that are growing in Canada. We asked all of our portfolio companies what is the No. 1 issue that you want help from us on. And it was technical engineering talent. Every one. This is going to be key to our future.

What countries are getting it right in terms of fostering innovation and global competitiveness?

Germany is one, but look at Israel. For a country that has such a small population, they are very focused. They are a big startup nation. They are strong in high technology, related to the military and defence. In 1989, when the wall fell, millions of Russian Jews, extremely well educated in the sciences, moved to Israel and it created the most massive influx of brain power in a very narrow area of their history. … A number of venture capital firms, largely U.S.-based, were attracted to come to Israel to provide the fuel necessary for these companies to grow.

You see it with advanced manufacturing from Germany, Israel in innovation and Sweden in telecommunications. Sweden very narrowly focused in on the wireless industry. Countries that don’t have the requisite population have no choice but to do that. If you are Brazil, China and the United States, do them all.

Name some companies that OMERS has invested in that are good examples of success.

I would say the great success stories already are [learning management system] Desire2Learn in Waterloo and [social media platform manager] HootSuite, [market research company] Visioncritical in Vancouver, and [written story sharing site] Wattpad.


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