Canada’s rankings in innovation has lagged that of other peer nations for decades despite government efforts to address this issue. Considering its success in developing research programs at its universities, its mediocre rankings overall in technology development is disappointing. Those programs alone have not been enough to translate into entrepreneurial innovation.
A 2017 C.D. Howe Institute study points out that, even though Canadians have been at the forefront of breakthroughs in emerging technologies, in many cases, the chief beneficiaries of those breakthroughs have been other nations’ economies. Canada needs to take a stronger role in building an environment in which Canadian know-how spurs Canadian business growth.
Causes for concern
According to a 2017 PwC global survey, Canadian companies stand significantly ahead of their global counterparts in having a dedicated team for digital innovation, with 54% of Canadian respondents reporting that their company does, as opposed to 43% of global respondents. Looking deeper, though, shows a far less innovative spirit, as 47% of respondents said that their pursuit of digital innovation takes the form of seeking to copy others’ innovations rather than pursuing their own.
Already a decade ago, experts recognized factors that constrain Canadian innovation growth. A 2009 study by the Council of Canadian Academies pointed to two key issues that have held Canadian businesses back from prioritizing innovation in their business strategies.
Distance from end-customer demands
The first issue deals with what has been called “the resource curse.” Canada is largely “upstream” in the international supply chain, providing raw materials for other businesses that create products that are in turn passed down the value chain until they reach the stage of finished products sold to end customers. That places Canada in a position far distant from end customers, whose evolving needs spur businesses at the downstream end of the supply chain to adapt, which, in turn, spurs innovation.
Canada’s distant, upstream role in this chain largely insulates it from an urgent need to innovate. This has led to low motivation over the decades to invest in the greater efficiencies that emerging technologies could provide.
The benefits of greater efficiencies are not sufficiently attractive to outweigh the cost of investment in those upstream business leaders’ minds. This lack of productivity growth has resulted in the subsequent lack of Canadian business growth.
Insulation from strong competition
The second issue is Canada’s relatively small domestic market, compared to many other nations. Not only that, but that market is regionally fragmented, with each region having markedly different needs. That creates even smaller markets within an already small domestic market.
Such small, fragmented markets offer far less motivation for innovation than larger markets, such as the US, do. Larger markets allow companies to recoup their innovation investments by offering their products to a much larger pool of customers. Small markets also offer less motivation for competitors to enter them. The costs of gaining market share against companies already firmly established there simply do not outweigh the potential gains that could be accrued by competing there.
Thus, Canadian domestic markets are effectively insulated, again reducing motivation for Canadian businesses to invest in innovation. Shareholder value has been maintained without a pressing need to invest in riskier, more innovative processes or solutions. In fact, the Canadian domestic market is so effectively cushioned that pre-tax profitability, as measured against the GDP, has consistently exceeded that of the US for more than half a century.
A later 2016 report ties these same two issues together to form an overarching problem that impedes innovation development: complacency. Forty years of relatively easy business growth were driven by: 1) increased employment growth hiding an otherwise flat growth of productivity; 2) a 1990s spurt of exports facilitated by favourable trade agreements and exchange rates; and 3) increased profitability for Canadian resource exports driven by elevated global commodity prices.
Unfortunately, none of these three elements appears to be sustainable. Demographic trends give little hope of an increasing number of workers continuing past employment growth. Exports have declined, and demand for Canadian resources has declined with them.
Yet complacency has continued to reign over many of those who direct Canadian business strategies. Decades of sustained growth have lulled many into believing that such growth can be counted on to continue as part of the natural order of things.
There is, however, no “natural order of things” that guarantees an unbroken upward trend in business growth. Conditions change. Markets fluctuate. And businesses that fail to be alert and adaptable suffer the consequences.
Piecemeal governmental policies
I would add another issue to the two mentioned by the Council of Canadian Academies study: governmental policies that previously took a piecemeal rather than holistic approach to encouraging innovation. The C.D. Howe Institute study described past governmental policies as follows:
Canadian innovation policy has in the past 40 years tended to be confined to accumulating the ingredients of innovation such as a strong university research capacity, subsidizing private-sector research and development or supporting privately led projects through the Industrial Research Assistance Program (IRAP) or concierge services of the National Research Council (NRC). At the same time, it has shied away from linking innovation policy more directly to important technical, economic or social needs still in search of solutions, or even to connecting government science programs more effectively to public needs.
Reasons for optimism
I feel, however, that Canada is finally doing the right things to enable innovation. The Canadian people have not shied away from emerging technologies. On the contrary, they are among the top users of the internet in the world and have been among the earliest adopters (and inventors) of smart phones and digital payment technologies.
Canada’s historic business complacency does not have to guide its future concerning innovation. Other countries with small domestic markets, such as Finland and Sweden, have demonstrated that, with mindsets that aggressively pursue innovation, even nations that rich in natural resources but small in domestic market can be leading innovation exporters.
In fact, Canadian businesses have had success in some highly competitive international markets, showing that they are quite capable of turning Canada’s present mediocre ratings into far more competitive ones. The World Economic Forum’s The Global Competitiveness Report 2017-2018 speaks both to Canada’s shortcomings and growth in overcoming them.
Canada ranks 14th for the availability of latest technologies; 9th for the quality of scientific research institutions and 4th for availability of scientists and engineers. It also ranks 8th for the quality of its higher education. While these results are not impressive among peer countries, they are pretty good globally and have been improving over the last few years.
New approaches by government
The Jenkins Report has been highly influential in guiding public policy since its presentation in 2011. Although not all the hierarchal structures it recommended have been instituted, it has strongly influenced governmental action into different directions than it had previously taken. Its introduction summed up the praise it had heard for the government’s policies and the suggestions for improvement:
During our extensive consultations, we learned about many Canadian success stories and heard from numerous entrepreneurs who said that federal programs have served them well. We also heard that there is opportunity to enhance the impact of programs to make them even better. We heard that the government should be more focussed on helping innovative firms to grow and, particularly, on serving the needs of small and medium-sized enterprises (SMEs). We heard that programs need to be more outcome oriented as well as more visible and easy to access. We heard that whole-of-government coordination must be improved and that there should be greater cooperation with provincial programs, which often share similar objectives and users. We also learned that innovation support is too narrowly focused on R&D — more support is needed for other activities along the continuum from ideas to commercially useful innovation.
What has been particularly striking has been the government’s shift from focusing on inputs to the innovation process (such as R&D and patent applications) to harder to measure outputs, namely, how effectively businesses combine the quality of labour with capital investments to achieve increases in efficiency.
The focus has clearly shifted to facilitating collaboration between businesses large, medium and small, as well as academic institutions and other research centres for the purpose of driving innovative solutions instead individual entities doing isolated R&D that rarely progressed into marketable outputs.
Even before the Jenkins report, a solid foundation for collaboration was in place. Canadian universities have been sources of innovative research, and highly regarded R&D centres such as Communitech in Waterloo and MaRS in Toronto have supported promising start-ups and helped commercialize research from post-secondary institutions for decades.
Where collaboration has been most notable is in fields such as AI and aerospace, where collaboration has been actively promoted and has cemented Canada’s position as global leaders in those fields. Fields where this approach has not been taken, such as robotics and IoT, continue to lag.
The C.D. Howe study also points out another positive in government policy approach:
Canadian government has rolled out the “Build in Canada Innovation Program (BCIP),” which helps individuals and emerging businesses move “their innovative goods and services from the final stages of research and development into the market” by “providing innovators with a successful use of their pre-commercial innovations.” The program helps young companies evaluate their product via the NRC, and provides them with a first buyer when their innovative product meets a military, health, environmental or other need of the federal government. This program helps address one of the Jenkins report’s key concerns, namely the commercialization gap faced by emerging and innovative Canadian firms and, specifically, the ability of these firms to compete against those in other countries with access to similar programs, such as the US Small Business Innovation Research program.
Provincial governments are getting involved, too. New Brunswick, for example, is working with Siemens on smart grid technology to develop a world-leading demonstration grid. Meanwhile, British Columbia is encouraging drone delivery innovations and Ontario took a bold step in being the first province to permit road testing of autonomous vehicles. These are just three examples of provincial involvement in innovation development.
Internal developments toward innovation growth
Canada has made great progress in recovering from its woeful 2009 “D” rating in venture capital support. By 2013, it had already attained a grade of “B.” The Canadian government still considers the country’s venture capital industry to be in its infancy but is greatly encouraged by its growth.
Many sectors that could derive the most value from IoT in Canada, such as healthcare, are publicly operated and highly integrated. This provides a solid opportunity for the government to encourage innovation, especially through the BCIP, or other procurement programs that focus on adopting home-grown innovative solutions.
In addition, IDC Canada’s 2018 predictions pointed out a healthy growth of innovation centres established by Canadian organizations, with 15% of Canadian organizations having established them and invested C$2.1 billion annually in them. The report identifies 777 such centres in 2018, with an estimated growth to approximately 900 by 2020.
Outside investment in collaboration
This push for collaboration has drawn the world’s attention, with an increasing number of world-class companies establishing greater presence in Canada. PwC, for one, has opened a state-of-the-art digital experience centre in Toronto, where PwC can work with experts from diverse industries to help clients embrace emerging technologies and develop innovative solutions to their business needs. The space enables PwC employees and clients to test how such technologies as AI, virtual reality, IoT or robotics could bring greater efficiencies to client businesses.
PwC’s financial services leader Diane Kazarian says of the centre, “It’s not just about the space and the technology. It’s really the environment we’re trying to create to drive creative thinking and innovative thinking. Putting people in an environment to be able to think creatively is very powerful for our people and clients.”
She says of PwC’s choice of Toronto for their second such centre in the world, “I feel that Toronto is a very important hub for innovation. There’s a lot of conversation around this, and we have incredible talent here in Toronto. It’s been a place where we’ve had blockchain technology be born, and various founders of new ways of thinking in technology. The opening of this centre is conducive to the fact that Toronto, on a global scale, is a hub for innovation.”
All these developments have led to progress in some sectors. As a whole, though, Canada’s technology adoption still lags well behind China’s aggressive approach in developing and adopting new technologies. The key to what successes Canada has enjoyed appears to be in those fields in which collaboration has been strongest.
Canada has a long history in the field of AI. More than 30 years ago, early pioneers Geoffrey Hinton and Yoshua Bengio, part of Canada’s world-class academic research community, helped build the foundations of the technology now known as AI.
Canada boasts more than 500 AI companies, located in clusters largely around Edmonton, Montreal and Toronto. The government supports this industry with incubators and accelerators, and private investment in them in 2017 set a new record of C$321 million.
The Montreal hub represents the largest AI academic hub in the world. More than 250 researchers and doctoral students in McGill University and Université de Montréal are involved in advanced AI research. It also boasts 91,000 qualified workers in Information and Communication Technology spread over 5,000 facilities. Montreal’s growing reputation as an AI hub is attracting skilled AI specialists to relocate there for the chance to work with other top talent. This influx of talent is occurring despite Montreal’s record low unemployment rate.
With mission trips to France and Silicon Valley to attract AI specialists, Montreal expects more than 250 additional AI specialists to relocate there. The economic development agencies that conducted the mission trips expect these new specialists to add their skills to the staffs of academic research organizations, major technology players like Google and Facebook that have presences there and the multitude of start-ups and scale-ups that dot Montreal’s landscape. AI is truly burgeoning there.
Recent government initiatives include a C$125 million investment in the Pan-Canadian Artificial Intelligence Strategy, seeking to attract and retain top talent to Canada’s research centres, find new and innovative AI solutions and establish “global thought leadership on the economic, ethical, policy, and legal implications of advances in artificial intelligence,” areas that have remained underdeveloped in the rush to commercialization.
The government is also investing C$950 to establish five tech “superclusters” across Canada, each tasked with developing solutions that will help Canada lead the way in applying AI to a variety of industries. These superclusters are designed to bring together small, medium and large companies, academic institutions and nonprofits to develop innovations that can create jobs and grow Canada’s businesses.
These superclusters are tasked with assignments to:
- Make Canada’s ocean-based industries more competitive with other nations’ industries, and includes such industries as fishing, oil, gas and clean energy
- Prepare Canada to better compete with international competition through more intelligent manufacturing processes
- Use AI to find ways to build more efficient intelligent supply chains in industry
- Apply AI to the agricultural industry to make Canada a leader in plant proteins
- Explore the potential of big data and AI to improve healthcare and other industries important to the Pacific Northwest
This is a reversal from past policies that focused on helping tech start-ups, but that inadvertently motivated them to stay small in order to continue receiving funding. Rather than isolating private sector organizations, this initiative brings together organizations of all sizes and types to work toward solutions that can spur business growth.
That business growth has attracted private funding to add to the mix. PwC reports record high investments in AI over the last five years. Even though venture funding declined somewhat in early 2017, investments at the seed and expansion stages show healthy growth. This, too, is spurring the attraction of skilled specialists to Canada.
Dr. Hinton, now Chief Scientific Advisor to the newly formed Vector Institute in Toronto, claims that some of the world’s top researchers in deep learning and other AI fields are starting to view Canada as a hub for AI research. Canada is already home to technology leaders Shopify and Thompson Reuters, and many others, including Google, Nvidia, Microsoft, Uber and IBM, to name just a few, are establishing their presence in Canadian research hubs, as well.
Canada’s success in AI has been the result of more than just government funding. Phillipe Beaudoin of Montreal’s growing AI solution provider Element AI remarked at a recent meeting of the Canadian Institute for Advanced Research:
What CIFAR got right was the fact that by connecting great academic minds together, this is where the good ideas come from. It’s really easy to think it’s only about the funding. But at some point, the extra million dollars in funding is worth less than giving time to brilliant people who are willing to collaborate, to sit in the same room and come up with and solve great research questions.
This type of collaboration has been what has enabled Canada’s AI field to become world-renowned. And the collaboration between academics and businesses is driving the research into the development of commercially viable products. This is what is working now, and this is what Canada hopes to build upon with its supercluster strategy.
That is not to say that Canada has done all it could in building its AI strength. China, for example, is still investing more in AI and has more AI startups and more AI patents than Canada. China, in fact, has pulled ahead of the US, as well, in its efforts to become an AI leader. Canada is heading in the right direction but could still do more.
Robotics, Industry 4.0, IoT
Canadian involvement in robotics, too, shows promise. The growth of Canadian spending on robotics, year-over-year, projects to be consistently slightly larger in Canada than in the US over the next two years. IDC estimates that total spend on robotics and drones in Canada in 2016 was C$1,462 billion.
Among the use cases for robotics developed over the past few years in Canada are drone inspection and assessment of cell tower maintenance needs and power line testing. Canadian companies are also supplying Swiss hospitals with drones designed to fly autonomously between hospitals in urban environments for delivery of time-sensitive lab samples.
In larger applications, the Canadian government is using unmanned ground vehicles for payload deliveries in hazardous situations and military reconnaissance. These vehicles are also being used by other organizations in first responder and rescue situations. The Hudson Bay Company also has fully automated its fulfilment process, using robotic systems in its warehouse to process ecommerce orders 12-15 times faster and with better accuracy than manual fulfilment.
The growing market share of Amazon and Walmart are forcing many retail companies to look toward robotic fulfilment to remain competitive. Canadian retail consultant Doug Stevens says of this trend:
Retail in this country has enjoyed for many decades a bit of a dearth of competition, which is coming to an end now. With the influx of U.S. players in the last decade and certainly with the presence and impact of Amazon, Canadian retailers are really having to awaken to the idea that if we don’t adapt and change and compete – we’re going to be in big trouble.
Ontario has become a major automation and robotics hub, with more than 350 companies engaged in the field. These companies cover the entire supply chain, from R&D and design, to components, to complete robotic systems, to integration, and are particularly well -known for their contributions to space exploration systems, surgical robotics and autonomous warehouse vehicle solutions.
Meanwhile, British Columbia has taken a leading role in developing drone technology. It has become a major demonstration site for testing drone delivery systems.
In terms of automation readiness, The Economist ranks Canada fifth, ahead of the US and China. This, along with year-over-year investment growth, is encouraging. It is not translating, however, into exports of industrial robotic technology. In that, Canada ranks only 14th. And Canada is only 13th in terms of robot density (number of robots per 10,000 workers).
It seems that all the prerequisites – innovation, education, labour market – have not yet achieved all the benefits they could. Canada can do better.
Perhaps the insulated nature of the Canadian domestic market mentioned earlier is to blame. Canadian manufacturers have historically underinvested in advanced technologies. Matthew Wilson, Senior Vice President of the Canadian Manufacturers & Exporters in their Industrie 2030: Accelerating Adoption of Advanced Manufacturing Technologies report, points out:
Manufacturing investment in machinery and equipment in Canada has fallen by nearly five per cent between 2009 and 2014, hitting a 30-year low in that year. In the US investment has risen by 58 per cent over the same time period. In fact, few industrialized countries have a worse record than Canada.
He suggests costs as the main factor in this reluctance, but also suggests that fear of the unknown is involved. With technology moving at a rapid pace, manufacturers may fear that, by the time they integrate a new technology into their process, it will have already become obsolete. This, however, is a harmful rationalization for inaction. Even a slightly behind-the-curve solution is better than being off the curve completely. And fear that new technology may not have the full, dramatic impact it promises only keeps manufacturers from enjoying any impact at all.
The report goes on to point out:
Chronic under-investment in machinery and equipment and slow adoption of these technologies is arresting this process and undercutting Canada’s international manufacturing competitiveness. From 2002 to 2014, labour productivity in manufacturing in Canada increased by 18 per cent. Meanwhile, productivity in the US increased by 49 per cent, and it nearly doubled in Taiwan and South Korea. As a result, Canadian manufacturers have had to rely on other factors – such as a low exchange rate – to remain competitive. This is not a sustainable growth strategy.
PwC’s 2016 Global Industry 4.0 Survey stresses the importance of early adoption. It projects that early adopters are almost three times more likely to achieve simultaneous 30% revenue growth and 30% cost reductions by 2020 than those who are slow to adopt. The report also warns:
Within the next five years, advanced implementation of Industry 4.0 will become a ‘qualifier to compete’ and is also likely to be seen by investors as a ‘qualifier for funding’. Companies who have not kept up will not only find themselves struggling to maintain market share but are also likely to face higher capital funding costs.
IDC’s 2017 State of IoT Adoption in Canada report shows steady adoption of IoT with 70% already having adopted at least one IoT solution, 7% in pilot or proof-of-concept stages of adoption and 14% considering adoption. That adds up to 91% of Canadian businesses having at least one IoT solution in place within the next few years. And it’s an 18% increase in solutions in place compared to 2016.
Infrastructure Services and the Public Sector are the highest adopters, with 77% and 76% already having solutions in place respectively and 98% and 96% being likely to have them in place over the next few years. Of the sectors studied, Financial Services lags behind with only 53% having solutions in place, but it is working hard to catch up, showing 23% growth between 2016 and 2017. Of those businesses that already have IoT solutions in place, 23% of them include smart building solutions among their IoT solutions.
One disturbing figure from the report shows that the companies that have adopted IoT solutions have adopted them sparingly. Of the companies that have adopted, 70% have adopted four or fewer solutions. Also, many companies that have adopted IoT solutions are not using them to their fullest advantage.
Only 13% of those companies that had IoT solutions in place were finding that those solutions were helping them develop new business models. Most were using them only to do what they had always done, only more efficiently.
Even in this, a global 2015 McKinsey report suggested that many companies use IoT in a very limited way with only 1% of the data generated by IoT used and this “mostly for anomaly detection and control, not optimization and prediction, which provide greatest value.” All these findings speak to a lack of innovation even among those who view themselves as innovators.
Granted, not all sectors will find immediate ideas for new business models from IoT; for example, new business models are not likely to arise from solutions designed merely to monitor processes. But, even in sectors where IoT should open doors to innovative approaches, the number of businesses finding new business models in their use of IoT fails to rise above 20%.
The report also points out that security is the biggest concern for companies in their IoT implementation. Yet with only 39% mentioning it as a concern, it may still be that many of those who implement solutions are not taking security seriously enough.
The market for IoT is certainly growing. A 2016 Public Policy Forum report on the promise and pitfalls of IoT for Canada quoted figures of IoT becoming a $21 billion market by 2018, compared to $150 billion for Canada’s entire internet, communications and technology industry.
It stressed the advantages that Canada has compared to global competitors:
Canada is in an excellent position to capture value from IoT. Canada has a low cost of doing business in the high-tech sector, world-class education institutions and a highly skilled workforce. Canadian companies have led in mobile and cloud adoption. Mark Reuss, the Executive Vice-President of Global Product Development at GM has lauded Canada as a place for high-tech research “because of its clear capacity for innovation, proven talent and strong ecosystem of great universities, startups and innovative suppliers.”
Yet it, too, pointed to Canada’s slowness in adopting IoT and factory automation as reasons for it squandering these advantages and falling continually further behind the US and Asia-Pacific region in this area. Canada has what it needs to compete in the fast-growing field of robotics and IoT, but, unlike its energetic pursuit of leadership in AI, it is strangely passive in robotics and IoT.
Also, in contrast to its position in AI, Canada faces a talent shortfall in IoT and in the Big Data skills that will enable companies to optimize its benefits. Canada’s Information and Technology Council predicted in 2015 that demand for Data Analytics Specialists in Canada would grow by nearly a third between 2016 and 2020, with 20% of new positions requiring skills in advanced data science that were not common at the time of the report. Such a shortfall is likely to hold Canada back even more in taking full advantage of IoT.
Ironically, as Canadian industry lags behind the rest of the world in IoT adoption and optimization of processes through IoT, Canadian consumers have shown a strong appetite for the types of interconnected devices that make their lives easier. Demand is there. And some enterprising Canadian companies are recognizing it.
Canada is already home to a number of established IoT companies and fast-growing start-ups in key IoT fields including sensors, machine-to-machine (m2m) communication and artificial intelligence. Ontario-based Miovision’s smart traffic network looks to solve cities’ traffic problems and is already used in nearly 650 cities in 50 countries. British Columbia-based Sierra Wireless has made significant inroads into becoming a global leader in devices that enable IoT-connectivity. Vancouver-based Optigo Networks is fashioning solutions that make fully integrated smart buildings possible.
These are only a few examples of companies standing out in IoT development. Although Canada is not positioned as well in robotics and IoT as it is in AI, there is still much that Canada can build upon. It will simply take greater efforts to communicate to businesses the opportunities and to attract the right talent.
Blockchain / Distributed Ledger Technology (DLT)
Often, when people think of blockchain, they immediately think of cryptocurrencies. Granted, cryptocurrencies are the use case that media outlets most often connect with blockchain, but blockchain is something totally separate from cryptocurrencies. It is only one of many exciting use cases that blockchain makes possible.
Besides its better-known potential for ensuring secure payments between parties, it also offers potential for secure storage of information, including legal documents, smart contracts, loyalty program management and other sensitive information. Organizations are also using it for solutions in global trade financing, compliance management, energy management and secure governmental communications.
Smart documents provide a good example of what benefits blockchain offers outside of cryptocurrencies. They can be set up to cover the interactions between not just two parties, but an entire supply chain, setting the terms for all parties and monitoring the progress of the contracts’ fulfilment. As each party fulfils its responsibilities, the smart contract can confirm the fulfilment and release the funds due for it, all without human intervention.
As for storing information, blockchain is adaptable for use either for totally transparent interactions or encrypted to protect highly sensitive information. In both cases, data integrity is maintained, because of the extreme difficulty that unauthorized parties would have in trying to modify data in the chain.
Governments can use it to collect taxes, pay benefits, issue passports, record land transfers, maintain personal ID records and much more. Blockchain also has potential across many industries in Canada.
Its ability to automate complex financing and supply chain interactions make it a natural for Canada’s already technology-rich financial industry. Blockchain can also greatly speed regulatory and monitoring functions. It further eliminates middlemen and both speeds and lowers the cost of cross-border transactions.
In the insurance industry, blockchain can greatly reduce paperwork and middlemen, as well. It offers customers greater transparency, saves costs, speeds processes and simplifies products that cross jurisdictions.
Its ability to manage the complex transfers involved in exploiting and delivering energy resources can bring tremendous efficiencies to oil and gas industries. Here, too, savings is expected from the elimination of middlemen and paperwork.
These are only a few industries that can benefit from blockchain. It can benefit any industry or governmental body that requires a secure source of data or has interactions with other parties.
Canadian companies are already exploring payment functionalities, and the government is testing the use of DLT for verifying the identities of travellers entering Canada from other countries. Canada is considered a global leader in blockchain and DLT. It ranks third in the world in blockchain adoption and is home to Vitalik Buterin, the inventor of the Ethereum Blockchain.
Low electricity costs, lots of renewable energy and the abundance of data centres in Toronto and Montreal also have attracted blockchain specialists and cryptocurrency miners to the region. The Greater Toronto Area has the most commercial data centres (more than 80) in Canada, and hosts the Blockchain Research Institute, which conducts more than 70 research projects to develop new use cases for industries.
The Greater Montreal Area has fewer data centres, but is growing much faster, with most new data centres being built there. It has attracted the top three cloud providers – Amazon Web Services, Microsoft Azure and Google Cloud Platform – to set up new data centres in the region.
Montreal is also one of the top three aeronautics hubs in the world, ranking behind only Seattle and Toulouse, France. With a huge and growing demand for airplanes, lots of exciting innovation in the industry and a resurgent space exploration industry, aerospace holds a promising future for Canada.
Montreal already hosts 205 aerospace-related firms and fosters a strong sense of cooperation between them. Its Aero Montreal forum brings executives of aeronautics companies large and small, educational institutions, research centres and trade unions together to find solutions to industry problems and help each other remain competitive in the global market.
This has been instrumental in Canada’s aerospace industry being one of the most innovative industries in Canada. It has consistently and dramatically outpaced other Canadian manufacturing industries in developing new technologies and in modifying or customizing existing technologies.
Montreal is unique in that it is the only aerospace hub in the world where an entire aircraft can be assembled from locally manufactured parts. It also is unique in that it is the only aerospace hub that features four major equipment manufacturers, each of which represents a different segment of the industry.
Aerospace is the province of Quebec’s main export. It accounts for C$10 billion in exports annually. Quebec, then is understandably very supportive of its aerospace industry. Since 2016, it has carried through on plans to invest C$250 million to help diversify it over a five year period. The goal is to attract $2.8 billion of private investment to further expand the industry into security and defence sectors and to attract even more foreign aerospace companies to Quebec.
Despite conditions that long led Canadian businesses to lag behind other nations in technology adoption, things appear to be turning around. New initiatives by government are encouraging not just R&D, but also the other steps needed to turn innovative ideas into innovative products.
Most importantly, increased collaboration in technology fields are starting to move Canada forward in global leadership. Canada has always had innovators. It can rightfully claim to be the birthplace of many of the emerging technologies currently transforming the world.
What is changing is that Canada is now starting to step forward in profiting from the growth of these technologies and claim a prominent role in their further development. We still have a long way to go, but we are at least now heading in the right direction.