We took a good look around the innovation ecosystem, and this is what we see:
- Communities outside of major centres not as entrepreneurial, and economic growth is not equitable across all regions
- First time innovators (who are often researchers, programmers, academics, artisans) are forced to become entrepreneurs to commercialize their ideas, which is hard to do and results in leaving a vast amount of innovation on the table. Both public and private business incubators and accelerators rely on the “innovator as entrepreneur” model, which produces limited results.
- Our economic system has created inequality by prioritizing wealth creation over environmental sustainability and positive social outcomes (e.g. gender and race equality, healthcare outcomes, housing and homelessness, food security, natural resource management)
- Angel investment and Venture Capital doesn’t scale well, its out there, but not available to the many, and especially hard to access for companies with great ideas but are not yet generating revenue. Often Venture Capital investment results in company ownership and operations being relocation, often to the United States.
- Consumers don’t have much ability to participate in the innovation economy unless they are accredited high-net worth investors (Angel Investors and Venture Capitalists). A majority of consumer investment is in institutional funds which prioritize shareholder return and commonly offshore the vast majority of their portfolios to foreign investments or blue chip stocks. Small companies do not have the capitalization to list on stock markets, which would make them open to direct consumer investment.
- There is a vast amount of institutional endowment (e.g. university) and foundation investment principal is sitting in bank accounts not being put to work in their communities.
- We are currently reliant on government to understand and make good economic decisions that benefit everyone. We have given government the powers to invest on our behalf (e.g. through its pension funds and budget allocations). For example, In British Columbia Canada, less than 1% of its $170 billion public sector pension fund is invested in Canadian private equity. Government investment is spread across a wide range of priorities and, in British Columbia for example, is heavily rooted in supporting long-held positions in resource extraction and real estate – a scenario that is likely somewhat consistent globally. Government has not traditionally used its vast resources to be a significant player in the innovation ecosystem, which could be achieved by diversifying its investments into other industries. We are now questioning the value of those decisions as they have played out over time. We need to stop relying on government to lead economic change and lead more strongly through the private sector.
- We offshore a majority of government and consumer investment, it’s put to work developing the economies of other nations. We are not investing enough in our own economy in ways that can scale (e.g. in home-grown, scalable innovation).
- In British Columbia 98% of business is small business, but only 17% of those businesses have over 4 employees. 83% of our small businesses haven’t scaled. Small business employment accounts for 53% of the 2.1 million private sector jobs in British Columbia, this percentage hasn’t changed in over 15 years. We’re not leveraging our strong intellectual and investment capital to scale this sector.