To Build Global Cleantech Champions Requires a Deliberate Effort to Strengthen Canada’s Domestic Market
March 22, 2021
We are on the verge of massive economic transformation. Spurred on by public and private sector commitments to achieve #NetZero carbon emissions, investment in sustainable technologies is growing exponentially. Recent research by PWC shows that the investment in “climate-tech” between 2013 and 2019 has risen 3750%, with investments of $16.1 billion in venture capital in 2019 alone –three times the amount that is currently invested in Artificial Intelligence.
This investment boom is great news for Canada’s #cleantech entrepreneurs, who are raising money, hiring new employees and pivoting their businesses online. But as these companies grow, their ability to scale their business here in Canada becomes increasingly challenging.
In normal times, the incentives for early-stage companies in emerging industries to leave Canada are relentless: larger foreign markets with easier access to customers and investors; regulatory environments more supportive of emerging technologies; the list goes on and on.
But these are not normal times. Current border restrictions have made international and even interprovincial visits to demonstration sites difficult (if not impossible), and the ability to translate virtual meetings into formal business arrangements and sales has proven to be challenging. On the procurement side, decision-making has slowed at larger organizations as resources needed for project pilots and climate tech adoption have been diverted to pandemic-response. This diversion of resources has created a backlog that may take months, if not years, to unwind.
The current business environment coupled with zero-cost global capital fueled by Build-Back-Better policies, net-zero commitments and the demand for #ESG investment products is accelerating the trend of Canada’s best cleantech ideas, and their associated highly skilled jobs, moving to other jurisdictions like the United States and China. We see evidence of this in the recent announcements of Canadian climate tech companies taking advantage of IPOs, reverse takeovers and SPACs -all replete with plans for the use of funds to build manufacturing and other private infrastructure in places other than Canada.
Fortunately, there is still time to counter this trend if we make a deliberate effort to build out the domestic market and strengthen supply chains in emerging climate tech industries where Canada has a comparative advantage. That is why Sustainable Development Technology Canada (SDTC) and the Coordinated Accessible National (CAN) Health Network are taking steps to chart a different future for Canadian innovators by helping to grow an integrated and receptive domestic marketplace, so they lead and grow internationally.
The CAN Health Network, a partnership of health technology companies and customers, has pioneered a “integrated marketplace” approach that benefits both sellers of health technology and buyers by identifying common challenges and establishing buying groups to both lower the risks of early adoption, while giving small firms with an opportunity to scale and grow here at home, and abroad.
By applying this model to accelerate the adoption of clean technologies, SDTC is able to leverage its broad network of high potential cleantech firms and match them to a group of buyers looking to solve common environmental challenges.
Through this marketplace, all parties benefit. Entrepreneurs can rapidly scale their business right here at home, while those adopting new made-in-Canada technologies will become more sustainable and therefore more competitive in a #low-carbon economy.
As governments and the private sector alike move to fulfill their net-zero commitments, the demand for sustainable solutions is clear. As Canadians, we have a choice. We can buy the technologies that drive our response to climate change from foreign sources or we can own the transformation and champion the homegrown technologies that will create jobs and demonstrate Canada as a leader in innovation.