Adam Belsher is CEO of Magnet Forensics and a founding member of the Council of Canadian Innovators.
Canada's economy is facing serious headwinds. Our trade deficit continues to grow. Our economic growth has been stunted as the world moves toward a post-commodities-driven economy, toward wealth creation where intangible goods drive the greatest profit. This new reality is putting our social infrastructure, health care, education and other public goods at grave risk.
Our federal government has recognized these challenges and committed to stimulating our economy through infrastructure investments. This could pay great dividends – or leave our next generations with a heavy bill to pay. The result depends on our leaders' ability to make calculated investments in what's needed for the future.
All levels of government seem to believe that upgrading our infrastructure will lead to sustainable growth. Yes, we will maintain our short-term quality of life. But believing that better paved roads and nicer lecture halls will create exponential, sustainable economic growth is ill-conceived. The infrastructure needed for the 21st-century economy is different than it was for the 20th.
Infrastructure has evolved to include the digital world, which drives so much of global commerce. Stimulus is a great opportunity to include the digital infrastructure required to modernize our public services.
In doing so, we could realize efficiency gains in how we educate our children, keep our population safe and healthy or other important public-sector objectives. We could stimulate the creation of highly valuable and exportable intellectual property assets being developed by innovative, Canadian technology companies focused on delivering public goods in the realm of public safety, education and health care. This would result in much-needed growth in our tax base to fund the next generation of infrastructure investments.
Countries leading in the global economy are doing so on the backs of innovative companies whose greatest assets are intellectual property. Five of Fortune's 10 most valuable companies are in the technology sector making innovative software (Apple, Alphabet/Google, Microsoft, Facebook and Amazon). Other companies that have maintained standing in the top 10 have diversified into the technology sector (General Electric, Berkshire Hathaway).
The countries leading in the global ideas economy, such as the United States, Israel and South Korea, are using strategic procurement to develop education tech, health-care tech, cyber security and other vertical clusters.
For example, the U.S. intelligence community has a financial institution strictly geared at investing in innovative companies and arranging co-development of technologies to help these agencies. Once developed, these products are not limited to the U.S. market. In fact, global commercial viability is a mitigating factor in the investment process. Such agencies are also utilizing their policies and purse to lure promising tech companies from countries like Canada.
Canada's community of fast-scaling innovative technology companies is small, but powerful. Governments' ability to help them scale up to be national economic engines has been limited. However, we have an advantage in our desire to stimulate the economy with infrastructure investments.
Strategic procurement is not without potential pitfalls. It requires government to take an outcomes-based approach and consider partnering with Canadian companies that don't necessarily have long business track records.
It will also require governments to rethink their approach to risk. In tech, there is a direct correlation between risk-taking and outcomes. Governments will not realize improvements in public services through tech, or create economic growth engines, without accepting this.
Our trading partners may call it protectionism. But while we must heed our legal obligations under various multilateral and bilateral agreements, we must also take as shrewd an approach as our global competition in scaling our tech companies to be globally competitive.
With historic levels of infrastructure spending and a number of innovative companies whose businesses are wholly or partly geared toward delivering public goods in a more efficient manner, we have a big opportunity. However, if our governments don't act decisively to build the infrastructure required for the 21st century, Canada will be left behind.
Canada is the result of one of human history's greatest nation-building feats. As we grew up as a country, our public leaders looked forward to the types of infrastructure we needed to succeed. What we need now is more of the same.