Insider Only Techopia

Op-ed: Innovation, leadership and collaboration needed to reclaim Ottawa’s tech glory

July 26, 2023
3:38 PM
ET

“As the tech scene seemed to gain momentum pre-pandemic, the post- pandemic era now brings uncertainty, urging us to examine the issues that have led to this concerning situation,” writes Sacha Gera.

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In the ever-changing landscape of the tech industry, Ottawa has been both a witness to remarkable successes and a victim of disheartening losses. As we look at the below list of former public tech companies in the region that have been acquired, privatized or lost since 2000, it becomes apparent that the city’s tech sector has experienced a significant hollowing out of publicly traded companies — in fact, there are at least 39 such examples. Who will be next? Well, that’s a scary question. This trend raises questions about the state of local tech entrepreneurship, the city’s ability to retain existing companies (as they scale globally), and its capacity to attract new talent. As the tech scene seemed to gain momentum pre-pandemic, the post- pandemic era now brings uncertainty, urging us to examine the issues that have led to this concerning situation. The state of downtown in the post-pandemic world, coupled with the lack of transborder and international connectivity to our airport, is hampering the attractiveness of the National Capital Region to retain and attract talent. Despite moving up to 11th spot on CBRE’s list of top tech hubs and now boasting about 94,000 tech jobs in the region (very impressive growth), these jobs are increasingly associated with non-Ottawa headquartered companies — in essence, we are increasingly becoming an R&D branch plant for multinationals. The long list of acquired companies raises a red flag — there are too many, and this poses significant risks. A continuous loss of companies can lead to a lack of innovation and competitiveness in the local tech ecosystem. It is crucial for a healthy tech sector to have a balance of mature, established companies that can mentor and support startups, fostering an environment of growth and learning. The concept of “pay it forward” has been pivotal to our past success and was a key factor in what drove the past honour of earning the label “Silicon Valley North” — a term coined by Denzil Doyle, who famously created the “family tree” of Ottawa-Gatineau tech companies. Are Ottawa’s tech anchor tenants of today continuing to pay it forward and are we fostering a collaborative environment that encourages that? One of the potential factors contributing to the slower growth of publicly traded tech companies in Ottawa-Gatineau in recent times might be the region’s reputation for a gentle and secure lifestyle. While this is appealing for many professionals and families, it raises questions about whether the relentless drive required to build massive, game-changing companies might be missing. However, Ottawa has witnessed global success stories like Mitel, Cognos, JDSU, Corel, Cognos, Nortel, Newbridge, Calian, Kinaxis and Shopify, proving that thinking big is possible in this region. Another prominent issue is the absence of a coherent industrial strategy in the country and even within the region itself. A clear and focused industrial strategy would provide direction and incentives for tech companies to scale and thrive on a global stage. Related to this is the challenge of attracting sufficient in-country capital to support the growth of companies beyond a certain revenue threshold. It is vital to address these issues and work toward developing a supportive ecosystem for tech companies to flourish. Canada ranks among the best OECD countries when it comes to producing tech companies that scale to $100 million in revenues but ranks near the bottom when it comes to scaling companies past unicorn status (valuation of $1 billion). At a recent town hall with Prime Minister Justin Trudeau at Kinaxis HQ in Kanata, I had the opportunity to ask him about just that. His answer was honest: “That’s a question that successive governments in Canada have struggled with for many, many, many years,” Trudeau told the audience. “There have been a lot of different attempts over the years to try and figure out that scaleup program.” The need for visionary leadership within the region cannot be emphasized enough. While some tactical initiatives have been helpful, a high-level industrial strategy is imperative. Further, leadership within the region, inclusive of the City of Ottawa, the City of Gatineau, Invest Ottawa, Hub 350, Innovation Gatineau and others, is critical to derive one voice for technology advocacy across the economic region. The failed bid for the Amazon HQ2 some years ago was a great example of the economic region coming together with one voice (albeit, I suppose this initiative may have agitated local tech superstar Shopify, a disruptive competitor, perhaps for good reason). We also need to rebuild the region’s tech brand. As an example, one can look at Calgary: “Live Tech Love Live.” What differentiates our economic region, what is our tech tagline? Remember our short-lived branding of “Technically Beautiful”? For me, it’s the quality of life, the outdoor adventures the city offers nearby, being able to live in a “little big city,” having access to both Kanata “deeptech” and downtown’s emerging “SaaS-tech,” and being able to gain mentorship from dynamic entrepreneurs to grey-haired execs that have been there and done it. When you add all that up, we punch way above our weight and it is why we’ve had a track record of conceiving quality tech stars versus quantity. Has any other city in Canada enabled the quality of publicly traded tech companies that Ottawa-Gatineau has produced? Despite the challenges, Ottawa still has significant potential as a technology HQ hub. The presence of reputable universities and a favourable environment for raising families makes it an attractive place for tech workers. Given geo-political factors, “deeptech” is increasingly cool and important again. I suspect this will bode well for the city as the world needs Ottawa right now and our deeptech expertise. However, for the region to support more publicly traded companies, it needs better access to investors with substantial capital, akin to what Toronto, Montreal or Vancouver have to offer. This would enable tech companies to scale beyond the initial VC funding rounds and remain rooted in the Ottawa region. Further, we need to get the word out to business leaders on all the amazing city transformation that is happening today and the infrastructure projects in progress, planned and potential — we need to excite our key business leaders and influencers and validate their choice to anchor their companies in Ottawa. We also need to be loud and proud about our beautiful city and show some swagger. If you or your employee believe Ottawa is boring, try following Ottawaisnotboring on Instagram and playing a tourist for a weekend. We are very fortunate. As we reminisce about Ottawa’s glory days as a prominent technology HQ hub and compare it to other thriving tech scenes, we must analyze the factors that have contributed to these divergent paths. It is time for all stakeholders — industry leaders, government officials (on both sides of the river), universities, the airport, and investors — to come together with one voice and devise a comprehensive strategy that fosters a vibrant tech ecosystem in Ottawa-Gatineau. This should include measures to support local startups, encourage innovation, attract diverse talent, improve airport connectivity, and promote collaboration between academia and industry. The region has the potential to reclaim its position as a technology powerhouse, but it requires collective effort, leadership and forward-thinking policies to ensure that the hollowing out of its tech sector HQs becomes a thing of the past. The time for action is now and the consequences of inaction could be detrimental not only to the city but to Canada’s overall tech competitiveness on the global stage. Let us seize the opportunity and work toward a future where Ottawa-Gatineau thrives as a hub for innovation, growth and prosperity. Ottawa public tech companies lost, acquired or privatized since 2000: