Rewind to the turn of the century in Ottawa. The Internet was growing, the telecommunications industry was booming and entrepreneurs were driving Ottawa’s high-tech economy. Financially, venture capitalists were plentiful and eager to invest in “the next big thing.”
But a concentration of telecommunications companies combined with a global recession and lack of seed funding caused Canada’s technology mecca to collapse.
Fast-forward to today. Ottawa’s high-tech sector is not what it once was and there isn’t the investment that was around during the boom to fund tech startup companies.
But there is reason to be optimistic, as the city’s tech sector is in a favourable position to benefit from a powerful new corporate network and fresh government initiatives to drive innovation.
As a starting point, this city has talent. Say what you will about Nortel’s accounting principles, but the company and its local competitors did leave a lasting impression on the city’s technology economy.
While the infrastructure is in place, the next generation of high-tech small businesses needs money from venture capitalists – or “angel” investors – to get them off their feet, but money is tight across every industry. The same millionaires are more reluctant to invest in risky ideas or products that aren’t proven.
Entrepreneurs in Ottawa have the option of reaching out to “C100,” a group of prominent Canadian tech company executives, veteran startup entrepreneurs and venture capital investors in Silicon Valley.
These successful tech gurus from up north have bound together to share their entrepreneurship and investment experiences – and Rolodexes – with Canadian-led startup tech companies.
The non-profit group’s cause is noble and its pedigree is impressive.
Startup companies can get mentored by CEOs, network with the group’s executives at Apple, Facebook and Google and schmooze with angel investors representing more than $8 million in capital.
It is that type of networking that is bound to get startups on the right track.
In addition, it is generally becoming easier for Canadian small businesses to succeed.
Innovation – or Canada’s lack thereof – has been at the top of the federal government’s economic agenda.
In October, the Conservative government commissioned a task force on innovation, which proposed ways to improve research and development. A key suggestion was that Canada’s small businesses need to be more innovative in order for the economy to grow.
The federal government will be responding to the report in the upcoming federal budget, which could mean an increase in dollars devoted to research and development.
Canada’s tax incentive programs for small business research and development are already among some of the most generous in the world. Last fiscal year, the government dished out $3.5 billion as part of the Scientific Research and Experimental Development tax incentive program.
In addition, the Red Tape Reduction Commission was created last year to identify barriers to businesses that have detrimental effects on growth, competitiveness and innovation.
A recommendations report released last month identified 2,300 irritants and will aim to implement policies that will limit daunting regulatory burdens and promote innovation.
Tech companies are key to economic growth and the government will be looking to drive innovation as much as possible. Even after Research in Motion’s tumultuous year, Stephen Harper says he won’t allow a takeover of the Waterloo-based tech giant.
With the federal budget looming and innovation at the forefront, maybe we’ll see the Conservatives provide incentives for seed-funding investors.
If not, Ottawa still has savvy local infrastructure, a powerful network of Canadian industry execs to the south and a federal commitment to innovation.
Who knows, a high-tech resurgence in the capital may not be so far off.