November 2, 2018

50 Year of Doing the Same Thing, the Same Way, a CATA Op-Ed: Charles Plant, Senior Fellow, the Impact Centre


50 Year of Doing the Same Thing, the Same Way

For 50 years the Canadian government has been following the same approach with regard to policy creation. They gather together a bunch of ‘experts’, ask their opinions and use that to either develop or support policy creation. This is the way the Barton report was created, and it was the basis for the strategy tables reports that they created this year.

What they don’t do is to actually do research to determine the underlying problems. They call it research but it is only opinion gathering. Using the ‘expert’ method only gets at symptoms and as a result we only ever address symptoms, not underlying causes. At the same time, they tend to ignore any actual real research because it doesn’t conform with their view of the way things should work. At one talk I gave to the Directors General of ISED, after going through the results of the research I was doing, one of them said that they couldn’t react to what I was telling them because they all had too much time invested in doing whatever they were doing now.

As an example of the lack of research, I was at a meeting of the Digital Strategy table or whatever it is called and the opening statement presented the hypothesis that we are experiencing a problem in Canada in scaling companies. I asked a simple question something to the effect of if there is a problem, have you measured the size of the problem, where we are now in numbers terms, where you think we should be and what the difference is. Of course they hadn’t done anything of the sort.

The whole idea of superclusters comes out of a recommendation regarding clusters in the Barton report but they have abandoned all economic rationale for cluster creation by creating superclusters. There is no such thing as superclusters. Successful clusters are local and best organized sectorial or vertically. And yet the superclusters include multiple geographies, multiple sectors and multiple verticals in order to create a tidy program. The Digital Media supercluster is claiming that they will create 50,000 jobs. If you do the math on job creation, basing that math on research instead of wishful thinking, it will create about 500 jobs, not 50,000.

Check out this for the math

Kevin Peesker’s, President, Microsoft Canada, has come the closest to defining success. He claims that the DMS will create 50,000 jobs. Really, I read it there. The investment “is projected to generate 50,000 new jobs that provide skilled and long-term employment opportunities for Canadians.” That seems like a pretty big number so I did some math to fact check the reasonableness of his claim.

I checked Microsoft’s own numbers to see if that’s the rate at which they generate jobs. They Have $83 billion of investment and they employ 131,000 people. That’s $633,000 of investment per employee. Based on that ratio, The Digital Media Supercluster, with $190 million should create about 300 jobs. I recently did some math on the average software company and it takes the average firm about $400,000 of capital to support an employee. On this basis, the DMS should create about 479 jobs.

479 jobs is a good sized tech company in Canada. It’s not a Supercluster but then did we really think $950 million would get us 5 Superclusters. I’m still looking forward to definitions of success that are achievable but if this is what the Superclusters are planning, then we are in for some big disappointments.

When I’m giving speeches I sometimes refer to an Article from the Globe. It talks about Canada’s 5 new R&D programs, designed because Canada lags the rest of the OECD at R&D. Sounds like it could have been written yesterday but it’s from April 1967. We’ve been spending billions of dollars on ineffective policy development for 50 years and we keep doing things the same way.

About Charles Plant, Senior Fellow, the Impact Centre

Charles Plant is a Senior Fellow with the Impact Centre, working to develop research and education programs in innovation and entrepreneurship.

He is a serial entrepreneur who has been an officer, director or investor in a dozen technology companies. Charles has also provided financing, consulting and coaching services to several dozen other technology companies. He was co-founder and CEO for 15 years of Synamics, a telecommunications software firm that provided mass calling platforms to telcos.

He spent four years at MaRS ending as CFO but spent most of his time as Managing Director, heading up a group of former entrepreneurs and specialists who developed thought leadership, provided education, mentorship, market intelligence and capital to over 2,000 technology startups in Ontario.

Active for much of his career in the world of finance, Charles has been a corporate banker, an investment banker and served on the Management Committee and as CFO of the Investment Accelerator Fund (IAF) at MaRS and CFO of MaRS Innovation.

As an educator, Charles spent seven years on the faculty of York’s Schulich School of Business teaching in the MBA program and now teaches management and leadership skills at the University of Toronto’s School of Continuing Studies. He has an MBA in marketing and is a CPA and Chartered Accountant. His blogs and other resources for entrepreneurs can be found at https://scaleupos.com.

Email: cplant@imc.utoronto.ca

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