Not offering much help
Tech CEOs say Liberal innovation agenda does little to help firms scale up: poll
The federal government’s bigticket efforts to support highgrowth tech firms are offering little for emerging companies that have already outgrown the fledgling start-up phase, according to a new survey of CEOs in Canada’s sector.
The insights are among the early findings of a three-year research project focused on properly defining mid-sized “scale-up” firms, outlining what prevents them from growing into big companies in Canada and ensuring they’re central to policy discussions.
“Scale-ups do not see their interests reflected in the federal innovation agenda,” said a document summarizing the opinions of executives at 48 of these firms during interviews last summer. The research is a collaboration between industry and the University of Toronto.
The research is partly funded by Toronto-based tech company Delvinia. Adam Froman, the firm’s founder and CEO, said he’s made use of many different federal programs over the last 20 years - and has seen the gaps for scale-ups.
The problem, he said, is that without ongoing support, madein-Canada firms are being purchased by foreign entities, which also gobble up valuable intellectual property Ottawa helped pay for. “We’re exiting too early and the government doesn’t recognize it,” Froman said. Ottawa, he said, remains focused on helping firms with annual revenues under $10 million a year, when it should continue its supports for the “most-at-risk companies” bringing in between $10 million and $100 million per year.
“If we can actually help more companies become $50-million companies, $100-million companies and stay in Canada, this will have a material impact on the future of Canada’s economic prosperity,” he said. Froman added that scale-ups are looking for continued support beyond financial help and “handouts.” For instance, he said the government could do a better job promoting “Canada House” as a space where Canadian firms can host events in the United Kingdom and ensuring federal agencies are agile enough to provide advice and services for fast-growing companies like Delvinia.
Since taking power in 2015, the federal Liberals have made big bets in hope of lifting Canada’s fast-growing sectors. Ottawa wants Canada to produce global-scale firms that will generate long-term growth and create lots of jobs.