Let’s talk about wealth. To catch up with their neighbors, Quebec and Canada have the same strategy: invest in innovative hubs, technological clusters, ecosystems of promising start-ups. However, they share a bad habit: they then refuse to buy their products.
It’s not just Bombardier that deplores the government’s lack of interest in Canadian products. This has angered Quebec and Canadian entrepreneurs in the technology sector for years. “Revenues are more important than subsidies. It’s simple: government agencies must buy our products,” summarizes the founder and big boss of Mappedin, Hongwei Liu. The Waterloo company maps the interiors of commercial buildings. Looking for the music room on a huge college campus? Mappedin has the solution for you.
Mappedin benefited from Canadian public assistance. She also benefited from a financial boost from a federal program in the United States, to the tune of one million dollars. “Afterwards, the American government became our client. We are still waiting for a first purchase from the Canadian government,” adds Hongwei Liu.
In other words, Mappedin has the solution if you are visiting a college campus located in California or Europe. “It’s a good thing that in the United States, they think we’re an American company, and in Europe, they think we’re European…” Because in Canada, the reception is less good.
Quebec techies are also plagued. The problem is the same at the provincial level as at the federal level. Quebec SMEs that spend to comply with the requirements of the Quebec government too often find themselves in the water, because they are considered less reliable than foreign giants.
We have heard this refrain in recent years in the health sector, in transport and in digital services. Today, it is in artificial intelligence that it is beginning to resonate.
Add one plus one
What the boss of Mappedin says illustrates a problem that is of historic caliber in the growth of Canadian technologies: governments spend billions on subsidy programs that generate significant business creation… which are unable to wean their dependence on public assistance.
It’s not for lack of trying. Before these programs run out, businesses naturally turn to the organizations they are most familiar with in the hope of converting them into customers: the government is often at the top of the list.
However, to sell to the government, you have to go through its call for tenders system. This system is criticized from all sides these days. Calls for tenders, both federally and provincially, often have criteria that are too broad, or too precise, for Canadian SMEs to submit their applications.
The result is that the state subsidizes companies and then buys the products or services of their competitors. Most of the time, these rivals are large American multinationals that we already know quite well and which do not need government assistance to make ends meet.
The same thinking applies in several cutting-edge economic sectors, “value-added” sectors, which are “wealth creators”, to use fashionable expressions in the government apparatus.
For example, Quebec generously subsidizes Quebec manufacturers of electric vehicles. The Quebec public apparatus manages an enormous fleet of vehicles. Imagine for a moment if the State made a plus one…
Perhaps we would see fewer police officers operating radar from the driver’s seat of an expensive and fuel-intensive Ford pickup truck, when they could do the same thing in a small electric vehicle designed in Quebec.
The example of Big Tech
Ironically, if they wish to better support innovative companies here, governments could imitate the American technology giants. They have their own start-up support programs. They all organize large conferences where these new companies are showcased for the rest of the tech world.
Obviously, these young companies have developed products and services that use the technological platforms of these giants. They had to invest in training their staff so that they could master the tools of their extremely wealthy partner. When they complete a sale somewhere on the planet, they at the same time inflate the turnover of the tech giant that supports them.
Conversely, if the tech giants need more specialized partners to respond to calls for tenders, they draw on companies they already know. Companies generally emerging from their own start-up development programs.
Canada and Quebec have very few technological giants. But governments are probably the most important customers for this industry.
Contrary to the well-known adage, the customer is not always right. In the world of technological innovation, the customer who doesn’t buy, when that customer is also the one who financed your company with billions, is probably the one who is most in the wrong.