Eight hundred million dollars was set aside in the last budget to foster the creation of technology clusters across the country, tech startups, incubators and IT sector C-suite execs certainly want to see the government expand on that.
The startup incubator
Abdullah Snobar, executive director of the DMZ in Toronto’s Ryerson University, want to see the government focus on three specific areas: people, technology, and companies. DMZ is one of the city’s leading tech incubators. In its six years of existence, DMZ has helped grow more than 276 startups, raised in excess of $283 million in seed funding, and created over 2,600 jobs.
There are a number of studies indicating that Canada will be facing an IT talent gap of about 200,000 by 2020, Snobar told ITinCanada. He believes the government should be doubling down on making sure the students of today are well-prepared for the next “tech revolution” so that Canada is no “left behind.”
“We have to invest in developing domestic tech talent and enticing foreign tech talent to work here in Canada as well,” said Snobar. “We also need to focus on supporting women in the IT sector, and lastly prepare for the future by strengthening STEM education in the elementary and high school level.”
Snobar said experts in the field of data science, data analytics, automation, and virtual reality are a rarity right now and will be even more in-demand in the near future.
Only about five per cent of Canadian tech companies is able to achieve year-over-year growth, according to Snobar. “That’s a really big problem because it means IT businesses are not getting all the ingredients they need to.” And this puts a damper on Canada’s ability to innovate.
Tax breaks and venture funding from the government are a huge help, but Snobar also says the government needs to realize when it ‘has to step aside and let the tech sector grow.”
For instance, he said, the government has invested a lot in developing a large number of innovation centres across Canada that it may have spread itself out too thin.
“I think we have a lot of innovation centres, and I’m not too sure we need all of them,” said Snobar. “I’m a big believer of the idea that government should be an enabler, not a driver. You should on value creation and your winners.”
Lastly, he said, the government should be a leading customer to the country’s IT companies.
“I want to know how startups startups can be closer to the government and the government can become their largest customer…not just the customer of big name tech companies,”
Venture capital and R&D
Research and development are key to a company’s growth and Robert Watson, president and CEO of Information Technology Association of Canada (ITAC), would like to see existing funding and credits maintained and even expanded.
As one of the largest IT business organizations in Canada, ITAC sees itself as a vital connection between business and government. Its members include companies like Accenture, Bell Canada, BlackBerry, Rogers, Salesforce, and SAS.
“Programs like SRED (Scientific Research and Experiment Development) program are very good, we’re not complaining about it,” Watson told IT in Canada. “But maybe it’s time to dust it off and modernize it.”
For instance, he said, the federal tax incentive program which focuses on research and development can be adjusted to shorten the time companies can claim for capital depreciation.
“This way, businesses can more rapidly invest in new technology such as fibre optics, data centre, and cloud computing,” according to Watson.
Watson also said he is in favour of the Venture Capital Action Plan.
The VCAP was created by the Government of Canada to help small and medium-sized Canadian businesses grow. For every $2 committed by the private sector to the plan, the government commits an additional $1, up to a maximum of $100 million per fund.
Between 2013 and 2016, the $400-million VCAP program backed four successful private sector-led funds. This has resulted in over $900 million in private investor capital being added to the ecosystem across four major funds.
“Investing in research and development directly benefits innovation and allows companies to scale,” said Watson. “This also means Canadian companies get to deliver things like 5G to rural areas, expand rural healthcare and the Canada Health Infoway…it’s a win-win situation.”
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