Panel Abstract:
Retaining science-driven startups is vital for Canada’s innovation and economic growth. Despite Canada’s robust research institutions, many startups are acquired by foreign companies and investors, jeopardising Canada’s long-term economic prosperity. The Chief Science Advisor’s Youth Council is assembling a panel of entrepreneurs, researchers, investors, and policymakers to explore a broad range of concrete strategies to retain startups within Canada, including financial incentives, enhancing access to venture capital, and fostering the growth of anchor companies within Canada’s startup ecosystem. Join us to delve into actionable insights aimed at nurturing Canada’s startup landscape and securing its enduring success for future generations.

Summary of Conversations

The panel explored strategies for retaining Canadian startups and entrepreneurs, addressing concerns about talent and IP leaving the country through acquisition or relocation. Discussions validated the issue’s impact on Canada’s innovation and growth, highlighting the need for a commercialization mindset and celebration of success. The panel also addressed challenges faced by Indigenous businesses, including protecting traditional knowledge, access to capital, and historical barriers to economic inclusion. Panellists debated Canada’s identity crisis, discussing whether the focus should be on becoming a ‘Silicon Valley of the North’ or leveraging existing strengths, particularly in resource sectors, while incentivizing innovation and investment.

Take Away Messages/ Current Status of Challenges

Here are the key takeaway messages and the current status of challenges discussed:

• Startup Migration: Canadian startups often relocate or get acquired by foreign entities, leading to a loss of talent and intellectual property.
• Funding Gaps: Insufficient funding for scale-up ventures in Canada forces startups to seek capital from the U.S., resulting in headquarters relocation.
• Risk Aversion: Canadian investors and institutions are more risk-averse compared to their U.S. counterparts, leading to lower valuations and hindering growth.
• Cultural Factors: A relaxed Canadian culture and a lack of emphasis on commercialization contribute to a slower pace of innovation and business development.
• Indigenous Disparities: Indigenous businesses face unique challenges related to historical exclusion, lack of role models, infrastructure gaps, and protection of traditional knowledge.
• Regulatory Hurdles: Complex and risk-averse regulations, particularly in sectors like agriculture, stifle innovation and commercialization.
• Economic Structure: A prevalence of oligopolies in key industries limits market access for innovative startups and reduces incentives for venture capital investment.
• Identity Crisis: Canada’s struggle to define its economic identity and leverage its strengths hinders the development of a cohesive innovation strategy.

Recommendations/Next Steps

Here are the key recommendations and next steps discussed:

• Commercialization Focus: Instill a commercialization mindset in academia and research institutions, encouraging students and researchers to pursue entrepreneurial ventures.
• Celebrate Success: Shift societal attitudes to celebrate and promote business success, particularly when supported by public funding, to encourage talent retention.
• Incentivize Investment: Implement tax incentives and matching funds to attract foreign investment, specifically from the U.S., into Canadian scale-up ventures.
• Streamline Regulations: Move from command-and-control regulations to outcome-based regulations, particularly in key sectors, to foster innovation and commercialization.
• Support Indigenous Businesses: Recognize and protect traditional knowledge, provide culturally relevant resources, and promote Indigenous entrepreneurship through mentorship and access to capital.
• Leverage Strengths: Focus on building innovation in sectors where Canada has a comparative advantage, such as resource-based industries, to create a sustainable ecosystem.
• Encourage Industry Leadership: Promote industry-led economic strategy and ecosystem models, reducing the government’s role in dictating economic direction.
• Foster Collaboration: Encourage collaboration between academia, industry, and government, ensuring clear roles and responsibilities for each stakeholder to create a win-win situation.