The State of Canada’s Digital Economy
The most important sector of the economy, in my humble opinion, is the technology industry. It’s the backbone of our health, transportation, business, and non-profit sectors. Why is it that Canada has fallen in its digital economy whereas in the late 1990’s Canada had a robust software and ICT sector? One of the factors contributing to Canada’s decline in the technology field is its stagnant support for truly creative and promising tech startups in their infancy. Support is fragmented with too many agencies trying to get government help in order for them to extend their own agency. Below I document a real case which exemplifies the problems faced by many of Canada’s young startups.
Mismanagement of funds that don’t reach the entrepreneurs, and are swallowed up by the organizations that are in-charge of distributing them don’t help Canada’s digital economy. A friend of mine is an entrepreneur and he has dealt with some of the organizations that are supposed to be helping startups succeed. For example, MaRS is a Toronto based non-profit that attracts over a billion dollars a year from funders, including the federal government. Where is that money going? Not to the startups it seems. MaRS is known to be extremely stingy when it comes to funding startups amongst entrepreneurs. I was told from MaRS that I can receive advice, but no money. I was also told that if I wanted money I would probably find it in the US, but not in Toronto.
Agencies and their Falacies
Meanwhile, MaRS is conveniently enlarging there own office space to double what they have now and are buying flashy equipment like super large iMacs for their employees. My friend told me of their experience with approaching MaRS in their Toronto office and this is was happeed:
I once went to the front desk, where the large iMacs were towering over the MaRS representatives. I told the person at the front that I had an appointment with someone. Her reaction was that of not knowing what to do. She seemed perplexed. Then she told me to sit down and she’ll go find out (what was the point of those big iMacs?). After 10 minutes she came back and directed me to where I needed to go. I was meeting with a mentor who would “help” my startup succeed. I had filled out the application and had made it clear that funding was not an issue, yet when I met the mentor the first thing he said was that my startup would not get any funding from MaRS and, that if I wanted funding, I would have a better chance going south to the United States.
I can go to almost any hospital in Toronto and quickly find out what room number to go to and how to get there. But in this “innovation centre” the iMacs seemed to be of little use. Moreover, the cold introduction to the mentor meeting by outright stating that MaRS, a supposed helper of startups, would not fund the project with no clear reason given even though going south to the United States would possibly be more likely to secure an funding. Such is the state of Canada’s digital economy: small minds, superficial help, and cash starved startups.
What we can do as a country in order to become a world leader in tech startups is to first stop giving billions of dollars to these fictitious agencies that do very little with the money they are given. I’m not entirely suggesting that they eat up the funding, but I am suggesting that there be more cash flow towards these young and needy startups by creating a culture of trust and accountability.