The eight clusters we studied all have some unique innovation opportunities and threats. While there are many obvious differences between the clusters, a number of common themes emerged in the roundtables that affect the ability of firms in each cluster to achieve scale and become more innovative.
Access to capital: In almost every roundtable, at least one participant would describe funding gaps in their cluster. In our financial services roundtable, we were told that “there’s no shortage of people willing to write $50,000 cheques,” but there were funding gaps in later rounds, with companies often needing to seek financing from outside of Canada. The consensus in our technology industry cluster was that access to capital has improved over the past decade, but there was still little appetite in Canada to fund high-risk but potentially very high-reward “moonshots.” There was less consensus in our extractives roundtable, with some members stating that capital was easy to come by, but another participant stating “capital is not all that available, you do have to work hard for it. It’s called ‘the valley of death’ for a reason, and it exists in our industry.”
Attracting and retaining talent: The ongoing struggle of ensuring firms have access to enough skilled workers was raised in many of the roundtables. Concerns were raised about the lengthy and complicated immigration system in the financial services industry roundtable; technical skills gaps in the tech industry roundtable; negative perceptions of the extractives sector and talent retention in the culture and digital creative industry roundtable. The consensus in our tech roundtable in Kitchener- Waterloo was that attracting and retaining talent in Canada was difficult because of the appeal of Silicon Valley. Similarly, in our digital creative roundtable, participants stated that young talented workers left Halifax for more exciting cities. While not identical concerns, there was an underlying theme of needing to find new ways to compete globally to attract and keep people with valuable skills.
Risk tolerance: The ability to take risks plays a vital role in being innovative and was highlighted in three of the roundtables. In the financial services industry roundtable, this took the form of concerns about needing to balance financial regulations to protect consumers from risk with allowing the financial services industry to take the risks necessary to be innovative. In the tech industry, we heard how Canadian venture capitalists are slow to invest in “moonshots” and take high risk for high-rewards. The cleantech and renewables participants spoke of a lack of investment in the industry because of uncertain and changing policies and regulations. While not identical concerns, the underlying theme is of a need to create spaces for risk within innovation throughout the sectors.
Regulatory barriers and coherence: Working within incredibly complex regulatory environments was a theme raised by participants in several of the roundtables. For the agricultural and agri-food sector, this took the form of concerns about a complex and difficult-to-navigate regulatory environment – especially for small and medium-sized businesses. In comparison, the cleantech and renewables cluster saw regulatory coherence as a way to spur innovation by aligning priorities, policies and regulations throughout Canada. For example, one participant noted, “If we had stronger water-quality regulations, we would have more innovation in Canada.” Within the financial services industry, concerns were raised that regulations designed for large companies were inappropriate for start-ups and act as barrier to innovation. There was an underlying theme of needing to find coherence within policies in order to not just allow innovation, but to encourage it. Overly complex or incoherent regulations acted to stifle innovation, in the view of our roundtable participants.
Picking winners: Roundtable participants largely believed that governments need to focus on a few key priorities and are currently spreading funding and attention too thinly across many priorities. This theme was identified within the roundtables as a need for the government to “pick winners.” In our cleantech and renewables roundtable, several participants felt that the Canadian government needs to pick areas of innovation to fund and not to try to fund every area. However, there was not total consensus as another member pointed out that by picking winners the government would be leaving out some areas that could have been very successful. Members of our life sciences roundtable also felt that the government needed to make some tough choices and focus funding on the strengths of Toronto’s cluster. For example, one participant noted “the money can’t be everywhere,” and another stated, “We can’t have 10 of everything”