36 Radical Ideas to Kick-Start Canada’s Economy

36 Radical Ideas to Kick-Start Canada’s Economy

14

Become a better storyteller

Starbucks had a problem in Canada: a lot of its potential customers are fiercely loyal to the home team, Tim Hortons. Luring away some of those loyalists would mean making a competitive cup of coffee. But the classic Starbucks taste—a much darker roast, brewed stronger for a more intense flavour— was almost the antithesis of the classic Tim Hortons double-double. Starbucks knew that its new lighter blonde roast stood a better chance of grabbing some of Tims’ customers—but only if they could get them to try a cup.

Hence Starbucks’ recent advertising campaign for the new blonde roast: “A Starbucks coffee for people who don’t know they like Starbucks coffee.” The tag line, in one concise sentence, has a sort of narrative arc, featuring a character who transforms from being a non-Starbucks drinker to a new, enlightened coffee connoisseur.

U.S. companies thrive at this kind of brand storytelling, probably because they are brash and not afraid to tell the world that they are the best. This cockiness gives them the freedom to be more creative and willing to take chances that attract, charm and convince customers. But Canadian companies struggle with storytelling (Tim Hortons is, in fact, a notable exception).

There are many reasons why Canadian companies drop the ball. It may be they are too modest, humble and, well, nice for their own good. This “aw, shucks” attitude may be endearing, and part of our culture, but it stops Canadian companies from boldly proclaiming their excellence—a key ingredient for capturing the spotlight.

This is a sad reality because the companies that tell the best stories are often the most successful because they can establish strong connections with consumers, partners and investors. Regardless of whether it’s a startup trying to establish itself or a large company with a well-known brand, storytelling has to be a key part of the strategic and tactical mix.

So what makes a good story? In many respects, it comes down to creating a narrative that integrates a company’s brand positioning and the values it shares with consumers. The energy-drink maker Red Bull, for example, wants its users to live on the edge—and it backs that up with dramatic stories like Felix Baumgartner’s famous skydive from the edge of space in October 2012.

Storytelling is key to innovation because new ideas and concepts need to be presented in ways that investors, partners and potential consumers can easily understand. A good story does a great job of educating and engaging target audiences so they can grasp what a new product does, as well as its benefits.

The bottom line is, Canadian companies need to become better storytellers because it allows innovation to flourish and take centre stage. For that to happen, they must be more willing to stand up and blow their own horns. – Mark Evans


15

Invest way more in commercial R&D

“Canada is at the bottom of the list for direct funding to companies, and at the top for funding university research and development, which is ‘curiosity’ research. To build tech champions, the government should put more energy into funding R&D in a commercial environment, because you employ a hell of a lot more people and can build scale.”

Terry Matthews
Chairman, Mitel

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15

Invest way more in commercial R&D

“Canada is at the bottom of the list for direct funding to companies, and at the top for funding university research and development, which is ‘curiosity’ research. To build tech champions, the government should put more energy into funding R&D in a commercial environment, because you employ a hell of a lot more people and can build scale.”

Terry Matthews
Chairman, Mitel


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16

Print your next office with a giant 3-D printer

Double-click on a file, press Send and wait for your home to print. You’ve heard of using 3-D printers (which lay down successive bands of thermal plastic or other materials) to create prototypes for handheld gadgets or aircraft parts. But soon the technology could be prinating whole buildings. In January, Dutch architect Janjaap Ruijssenaars announced he would 3-D–print a 12,000-square-foot building in Ireland by 2014. The two-storey Landscape House—a flat, looping figure-eight form—will be constructed by an industrial-scaled printer using sand and a binding agent to create marble-like six-by-nine-foot slabs for floor and ceiling. Construction is expected to take 18 months and cost about $6 million. “3-D printing is amazing,” Ruijssenaars told the BBC. “You can print what you want—it’s a more direct way of constructing.” – Carol Toller


17

Learn to play well with others

A GE survey found that Canadian executives believe partnering with other firms is important to innovation—but few think their company would actually go for it

18

Think twice about that IPO

The ultimate success for many entrepreneurs is a successful IPO. But what if going public stifles the innovative spirit that made the startup such a success in the first place? New research by Shai Bernstein of the Stanford Graduate School of Business suggests it does. Bernstein analyzed patent data from nearly 2,000 tech companies and found that innovation at newly public companies was more incremental and less ambitious. Worse, the public companies failed to retain top inventors, who were 18% more likely to cash out and leave post-IPO. Those who stayed behind became less valuable to the company—their inventions received 48% fewer citations per patent. Maybe that’s why Mark Zuckerberg postponed his Facebook IPO for so long. – Carol Toller


Transform politics with big data

Modern marketing and consumer-research techniques, combined with the tools and strategies learned from Team Obama, are transforming Canadian politics. Winners will be determined not just by their financial war chest, but by the size of their voter information database. Partisans now create products to help their campaigns, then transform their work into successful startups helping campaigns the world over. “Information about individuals is the new currency in politics,” says former NDP national director Brad Lavigne. “Money is important—it always has been and always will be—but the new currency is information.”

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20

Let in 100,000 more immigrants per year–starting right now

Few things are more important to innovation than immigration. Immigrants are, by definition, men and women who risked it all for a chance at something better. It’s no wonder they make great entrepreneurs, or that roughly half of all Silicon Valley startups are founded by immigrants. Or that, according to a recent study by the Partnership for a New American Economy, they are responsible for 76% of patents filed at America’s top schools.

Many of Canada’s most notable founders have come from afar. Take BlackBerry co-founder Mike Lazaridis, who moved here from Turkey; or Barrick Gold founder Peter Munk, from Hungary. The trend continues today, as some of our most promising tech startups, like Wattpad and Shopify, have immigrants at the helm.

Canada is well-positioned to grow as an innovation hub, but we’re not as competitive as we could be. Our current intake of 250,000 immigrants per year—a target set 20 years ago—is now inadequate. Baby boomers are set to retire, and the need for workers will only grow more acute. That’s why Canada should increase its intake to 350,000 right away—a number that would both offset the retiring boomers and help Canada grow.

New Canadians tend to flock to larger cities such as Toronto and Vancouver. As Boris Wertz, founder of Version One Ventures in Vancouver (and a German immigrant), explains, creative industries “thrive on critical mass—on developing ideas together. You see that on a small level in companies,” he says, “whether they’re exchanging ideas in cafeterias or in the office. Cities play that role on a larger basis.” That’s why Toronto and Vancouver are also the highest-rated startup ecosystems in Canada, according a recent ranking by Startup Genome.

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But the world is catching up. A recent ranking in Foreign Policy magazine evaluated 75 leading cities on population and GDP growth, indicating which would be the most dynamic by 2025, and only one was Canadian: Toronto, at 52nd. Thirteen of the top 20 were Chinese.

The global cityscape is shifting quickly. We’re contending with emerging metropolises—no longer just the likes of New York, London and Tokyo. Shanghai’s GDP is now about $250 billion, just shy of Toronto’s $270 billion, and set to overtake it soon.

The only way to keep up is more people—more immigrants. Along with boosting our numbers, they also help us tap into the world’s many markets. That’s just one more reason Canada would be well-advised to swoop in aggressively—before some of the world’s best minds settle somewhere else. – Trevor Melanson


21

Stop talking about big data and start using it

22

Replace an I.T. worker with a cognitive scientist

Big data offers new frontiers for innovation, but don’t leave it solely to your information technology team. IT experts tend to focus more on the “T” than the “I,” note researchers Donald A. Marchand and Joe Peppard in a report they wrote for the Harvard Business Review. “They are generally very logical and very strong process thinkers.…For tasks such as processing financial trades or retail transactions, these are ideal skills. If, however, the goal is to support the discovery of knowledge, they become a hindrance.”

The best data teams include cognitive and behavioural scientists, the researchers say, citing as an example the British tax agency, which employs organizational psychologists to interpret why certain debt-collection approaches don’t work for some taxpayers. Data-crunchers can identify who the reluctant bill-payers are—but it’s the behavioural scientists who can peer into tax-shirking minds and figure out better ways to motivate them to pay up.


23

Connect everything to the Internet

For the generation that grew up watching David Hasselhoff’s talking car on Knight Rider, the idea of the computerized car is nothing new. By the looks of this year’s North American Auto Show in Detroit, soon you’ll be able to buy a KITT of your own: almost every dashboard boasted touch screens, voice control, real-time performance data and more.

Driving the trend are new U.S. and European Union safety laws mandating that by 2015 new cars must have “black box” devices that record mechanical information and wireless capabilities to transmit it. As a result, Canada will have 7.5 million connected cars by 2020, estimates Mansell Nelson, vice-president of advanced business solutions at Rogers (which owns Candian Business). As many car brands take the new rules as a cue to transform vehicles into computers on wheels, an enormous new market is forming: cars will only be the first wave in the drive to connect every gadget in your life, from razors to rice cookers.

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That shift represents big opportunity for firms ready to harness the trend. QNX, which made more than 60% of the core software inside the world’s car infotainment systems in 2011, has partnered with The Weather Network to send location-based weather data to drivers, and the intelligent dashboard system in many of Nissan’s 2013 models, for instance, will feed drivers real-time local fuel prices, flight-status information, and points of interest supplied by Google.

These vehicular innovations are in turn helping to create a whole new market for the firms building the cloud infrastructure and data pipelines necessary to connect all those endpoints. M2M, the industry term for machines talking to machines over a wireless network, is expected to be worth $1 billion in the next few years, according to Rogers CEO Nadir Mohamed.

From practical applications like alerting drivers to necessary maintenance to frivolous apps—tweeting toothbrushes, anyone?—this is only the start of what’s being called the “Internet of things.” – Sarah Barmak


24

Measure your progress (but not too much)

Measuring innovation—both efforts and successes—is a key aspect of innovating successfully, but about half of Canadian companies have no system for measuring innovation, according to Conference Board of Canada vice-president of organizational effectiveness Michael Bloom. He says the sweet spot for measurables is six to 10 metrics: anything less isn’t rigorous enough; any more is probably wasting time better spent on actually, you know, innovating.



25

Scrap your whole business model…every few years

IBM famously reinvented its business model when it discovered that selling IT hardware was a dead end. Amazon.com and Barnes & Noble added publishing and distribution functions to their retailing operations, ushering in the era of the e-book. New York–based ad agency R/GA goes even further: every nine years, the company reimagines itself. What began as a film production house during the 1970s has morphed into an integrated digital studio and then later an ad agency.

Companies that regularly assess what they’re doing with a view to changing are rare, according to Andrew Maxwell, CIO and director of partner relations at the Canadian Innovation Centre: “We get very good at what we’re doing, and we don’t want to change it.” In one recent survey, fewer than 5% of companies cited business-model innovation as a top priority. “But re-examining what you do—asking questions like, Do we need distributors? Do we need middlemen?—can be a very powerful innovation tool,” says Maxwell.

Even if a company’s operations in Canada seem deeply entrenched, a move into a new territory offers an opportunity to reinvent the business model. “It allows you to enter the marketplace and disrupt it. It’s a way forward—a way to advance.” – Carol Toller

26

Stop taxing the angel investors

Right now, Canada’s early-stage investors benefit from a lifetime capital-gains deduction limit of $375,000. Effectively, this means that when such an investor sells shares at a profit, their gains are untaxed, provided the shares were held for at least two years. But Ross Finlay, co-founder and director of the First Angel Network Association in Halifax and a longtime angel investor, says that amount can be reached with a single good investment, so it’s not much of an incentive. Canada could attract more early-stage capital, he contends, by following the United Kingdom’s example and offering an unlimited exemption. “Angel investors are very prolific investors,” Finlay says. “It encourages that whole culture of capital that we don’t have.”

Britain’s Enterprise Investment Scheme provides generous tax relief to investors who buy shares in higher-risk early-stage companies. Among other things, qualifying investors can get tax relief equal to 30% of the cost of those shares, to be set against their income taxes owing for the year during which the shares were purchased. Even better—provided the investment is held for three years—any capital gains are exempt from tax. The U.K. has reaped dividends from this, notably in the form of Europe’s largest venture capital sector.

Finlay acknowledges his suggestion will meet resistance in an age where “austerity” has become the watchword in public finance. But he predicts Canadian enterprises would experience a steady increase in the availability of early-stage capital and create more jobs: “I would suspect that if it’s working in England, it would probably work here.” – Michael McCullough


Illustrations by Remie Geoffroi. Images: iStock, Janjaap Ruijssenaars, Kevork Djansezian/Getty, Shutterstock, QNX, Mark St George/Rex Features, Q9 Networks Inc