A Yawning Gap Between Startups and Industry: Digital Transformation in Canada

DX in Canada
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Excerpt from the newest report on survey results pertaining to digital transformation in Canada.

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CIOs and executives in Canada are fighting digital transformation battles on two fronts: keeping up with global competition, and confronting a lack of urgency on digital transformation in their organizations.

Canada has many advantages when it comes to tech (our renowned post-secondary system, proximity to major US innovation centres, and startup ecosystem, geopolitical advantage for the “brain gain”). The results of a survey recently conducted by CIO Association of Canada (CIOCAN) to understand CIO and CFO attitudes and organization preparation for digital transformation, demonstrate that some of our largest companies are squandering opportunities to take global leadership in tech. This has already affected our retail sector, and if not addressed, may have a significant effect on our future economy: one where heavyweights like China, the US and Russia fight it out for dominance in AI and other emerging fields. “We have twenty rapidly accelerating technologies right now, something that has never happened before in human history.”  (TechCrunch, 2017)

The survey results show a yawning gap between the existing pillars of Canadian industry and Canada’s much vaunted, highly celebrated and successful startup community. The implications are significant. Canadian tech startup business innovation, with notable exceptions, has not trickled up to industry, and if not addressed, competitiveness will suffer, if it has not already.

“Is Canadian industry on the verge of falling too behind to catch up? Is Canadian industry in an analysis-paralysis mode currently, where everyone is looking and trying something but nothing substantial is being implemented?”

The results should not be a surprise, but the extent to which we are at risk may be. For years, organizations like the Information Technology Association of Canada (ITAC), through Adam Chowaniec, a technology visionary and passionate Canadian who wrote extensively on the topic, and Lynda Leonard, a former ITAC vice president, (read more on ITAC’s work in this area) have  warned against the hollowing out of Canadian industry, visible in IPO patterns and acquisitions. IDC and SAP data showed an ambivalence in Canada about digital disruption in 2016 and 2017, a slowness to transform, with gradual improvement. More recently, (quote from SAP)

This data shows that there is another, deeper issue: complacency at home even in our titans. We see the effects across the country, and increasingly outside of it as well: retailers closing, (Financial Post 2017) or being bought up, the looming threat of Amazon like a cloud (no pun intended) hanging over Canadian retail, job losses in traditional industries, the growth of companies like WeWork, and a continued slowing of domestic IPO activity. However, these are not the primary issues highlighted in our report. The question raised is this: if the Canadian titans of industry do not benefit from the Canadian tech boom and become competitive on a global scale, what are the implications on our economy? Are there enough upstarts in the wings to pick up the slack? Until the gap between tech startups and industry giants starts to lessen, we could be in for a challenging era competitively, although new models for innovation and transformation success suitable to an economy now 10th in the world, are also emerging. These models position Canada as a greenhouse and testbed for innovative technologies and products; a market rather than an enterprise innovation leader. There is a brass ring if we want to go for it, and a great example with high potential emerging out of the FinTech sector’s partnerships with the banks, but something greater than limited ambition will be required on the part of both the public and private sectors.

 

The full report will be coming soon at DXagents. In the meantime, you are encouraged to register for the webinar and moderated discussion this afternoon at 1:00 pm EST.

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