As part of our Canada Competes series, we asked readers to share the biggest obstacles they face trying to compete and innovate in Canada. We also asked what the government could do to help businesses overcome those obstacles.
Vikram Chari, vice-president and general manager of Crystal Technology Mgt Svcs. LLC, Toronto.
Vice-president and general manager of Crystal Technology Management Services, Toronto
Innovation comes when you actively seek out challenges beyond your comfort zone. Only fresh ideas, new methods of doing things, and new international markets will help Canada grow into a really relevant country in world business. Looking beyond traditional industries like mining, banking and natural resources will expand the vision of Canadian companies and help deliver increased revenues and profitability going forward. The Federal government needs to solidly promote Canadian expertise in the international marketplace and stand behind those companies that do this through attractive financing, tax subsidies and promotion of trade through government policies that are international-business friendly.
Owner, Panty By Post, Vancouver
My challenges are in the area of innovation, IT and raising capital for cash flow and growth purposes. IT development and design are very expensive. I'd like to see the government working with small business to provide tax cuts or grants for IT and technology advancements. What my IT company can develop for me will help me earn more money and contribute more to the economy.
CEO and founder of Addictive Mobility, Toronto
Addictive Mobility has had success in Canada but we are currently trying to grow in the American market. It is difficult as a Canadian company to establish and maintain relationships with American businesses. We often have to make evangelical-type trips where we meet with potential clients and highlight the features or benefits of our technology. In comparison to our American competitors, their proximity to these companies means they are more likely to win the client. We believe a Canadian company can stand on par with an American one, but we have difficulty getting our foot in the door.
Owner, The Mezzanine Group, Toronto
Canadian companies can be very good at inventing and ingenuity - they come up with great new products and services. But generally speaking they are not good at marketing those solutions. And without good marketing, innovative products and services fail to become business successes. The federal and provincial governments have many grant and loan programs that support research and development. I think they should provide more support programs for market research and marketing so that Canadian companies can not only create great new products and services, but can successfully market them globally.
Chad English is director of research and development at Coigitica in Ottawa.
director of research and development, Coigitica, Ottawa
One of the biggest challenges for Canadian companies trying to innovate is risk mitigation. Companies who have the money to take risks don’t do it here. Companies who want to do it here don’t have the money. Underwriting large risks requires either a healthy venture capital industry, which we don’t have, or government investment, which is cutting back instead of growing. A third alternative is pooling of small risk capital via clusters and consortia, but in smaller markets like Canada the collaborators also tend to be competitors and there is inherent risk in simply trusting partner companies.
Andreas Sobotta is VP marketing at Festo Inc. in Mississauga, Ont.
VP marketing, Festo Inc., Mississauga, Ont.
The biggest challenge are the certifications and approvals that are required for the Canadian market. Products that are considered safe and reliable around the world and have global as well as North American approvals have to be resubmitted and sometimes retested to be allowed on the Canadian market. Since our market is small compared to the U.S., a lot of companies decide not to launch their innovative products in Canada because of the high cost involved. Therefore the Canadian manufacturers - customers of the industrial automation suppliers - cannot be very competitive on the global market. An OECD report published recently suggests that Canada's productivity has declined since 2002, primarily because of outdated standards and restrictive certification procedures. No wonder that a lot of manufacturing companies are leaving Canada since other countries do not have these type of restrictions. A study of the Electro-Federation of Canada estimates the additional certification costs for redundant testing and resubmitting products in Canada to be in the range of $2-billion.
Founder and executive director, Decode Global, Montreal
There isn't enough support, capital, or trust for businesses in their first year. It's discouraging to see how most "incentives" for startups are only available for companies that have made it to year two or three and are profitable. We are also too focused on being a natural resource-based economy, which in some ways seems to have stifled innovation in other sectors due to biases for funding and programs. Government should provide more funding for companies in their first year. So many great ideas can't get off the ground because of the extremely risk adverse nature of our banks and lack of access to even small amounts of seed capital. It should also provide incentives for larger, successful Canadian companies to help smaller companies expand globally. We do not help each other out enough.
President of Montreal Media Management, Montreal and Peterborough, Ont.
My challenge is funding. Banks and grant-awarding groups want to invest in proven ideas. Proven ideas are not innovative. Innovation is by definition new, risky, and difficult to explain. Additionally, the amounts on offer are way too small to be able to fund the start-up costs of a company. Many groups will make you bend over backwards for $5,000. My initial estimates for funding requirements were closer to $300,000 over three years just to get to break even. For a business to make it globally, starting out of a closet while maintaining a job isn't an option any more.
GIVE Group director and realtor, Vancouver
My biggest challenges are: Financing: I have to stretch every dollar and I miss out on some opportunities (advertising, networking events, print promotion). Marketing support and advice: friends have been helpful with my website and leaflets but it would be nice to have more expert input/ideas. Knowledge access: it's hard to sift through all of the online business strategies to find practical solutions. When an enterprise is completely new like GIVE Group, it has been hard to find the right business model (ours is still evolving). Even for standard business practices, most start-up advice is from the U.S.