Canada’s federal, provincial and local governments are not doing the country’s IT sector any favours, according to Mitel Networks Corp. chair Terry Matthews.
Speaking to public sector IT leaders at the annual Showcase Ontario conference in Toronto, Matthews urged large enterprises and all levels of government to both press their vendors to use Canadian technology products and buy from local companies directly. The largest systems integrators in the world, he said, are U.S. companies that predominately use homegrown technologies when servicing contracts to Canadian customers.
For Matthews, the future of Canada’s high-tech sector depends on Canadian organizations — particularly in the government — and their move to support local companies.
“When Canadian institutions want to buy systems, they almost never buy Canadian technology,” Matthews told conference attendees on Tuesday. “I hate that. I fight it every day.”
“I find it easier to sell to governments in the Netherlands, U.K. and France than I do in Canada,” he added.
For many high-tech start-ups, he said, the inability to sell to the Canadian government or big Canadian enterprises hurts their sales pitch abroad. “If you can’t sell in your local society, your competitors will use that against you when you try and sell somewhere else,” Matthews said.
He added that while Canada spends an enormous amount of money on university research and development programs, the government lags far behind other countries for direct government incentives to businesses.
Tom Jenkins, executive chairman and chief strategy officer at Waterloo, Ont.-based Open Text Corp., echoed many of Matthews’ thoughts, pointing out that 95 per cent of Open Text’s business comes from companies outside of Canada. Canada’s economy, in general, will be less productive without indigenous and successful tech companies, he said.
Open Text is a living, breathing example of how government support can help build successful companies at home, Jenkins said. The billion-dollar company, he said, was started by a couple of Ontario government initiatives.
“We have to remember at we are in a race against everybody else in the world,” he said in support of government incentive policies.
The same goes for Mitel, said Matthews, who credited the Royal Canadian Mounted Police as being his first client back in the early 1970s. The RCMP dished out $35,000 for the company’s telephony tone receiver product.
Don Morrison, chief operations officer at Research In Motion Ltd., also spoke at the event. He called on Ontario-based entrepreneurs to adapt to what he called a “fragmented software industry” that values apps and services as opposed to physical hardware and infrastructure.
Morrison pointed to examples of apps in the health-care industry that have helped bring remote access for diagnostics to diabetes patients. He said by simply creating apps and experimenting, Canadian entrepreneurs can develop cost effective ways to tackle similar problems in many public sector industries.
Matthews also offered up advice for technology start-ups, as he stressed the need for aspiring tech gurus to go out and talk with their customers before investing heavily in product development.
“Deal with potential customers upfront and then develop,” he said.
In addition to this, he stressed the need for start-ups to form alliances with their peers in order to better address global market needs.