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Do you miss your BlackBerry? Canada’s innovation sector does too

A new movie celebrates the spectacular rise of the Waterloo, Ont.-based company BlackBerry. But in a way, the film is really about innovation and serves as a reminder about why Canada desperately needs a new innovation policy. 

New movie highlights gaping holes in Canada’s innovation policy.

The Blackberry rose to prominence as the world's first truly smart phone

The new movie BlackBerry is a celebration of the much beloved phone. It stars Hollywood actors and gives a behind-the-scenes sense of the rise and fall of the Waterloo, Ont.-based company RIM.

But under all that, it’s a love letter to innovation. The BlackBerry changed how we work, how we live and how we communicate.

“How profoundly important the innovation that these nerds above a diner in Waterloo in 1996 came up with,” the movie’s star, Jay Baruchel, told CBC News at a recent red carpet event.

It’s easy to look back at the spectacular rise and fall of BlackBerry and focus on the fall. But Baruchel wanted to make a movie that celebrated the rise — and the way one small Canadian company changed the world.

“The way that we participate in the world, the way that we relate to one another, all of it stands on the shoulders of what they created, for better or worse,” Baruchel said.

“They’ve toiled in anonymity for long enough. And I want people to know that we innovate and hustle and make as much shit as anybody else.”

A man with grey hair and a striped dress shirt slouches and hugs his body while holding a Blackberry phone, in a crowded room.

Shortfalls in Canada’s innovation ecosystem

The rise of BlackBerry showed Canada is as well placed as any country on earth to build and engineer new technologies. Those engineers above a diner in Waterloo created an entirely new product class. At the same time, just outside Ottawa, engineers at Nortel were breaking similarly important ground.

When they eventually failed, there was no system in place to support the ideas, and the work that was still being done.

“In a system where you have the correct kind of innovation policy and real innovation environment, the demise of both (RIM and Nortel) would have immediately created a massive amount of small companies which could quickly scale up,” said Dan Breznitz.

He’s the chair of Innovation Studies at the Munk School of Global Affairs and Public Policy. He’s also the co-director of the Innovation Policy Lab and a fellow of the Canadian Institute for Advanced Research (CIFAR).

He points to Silicon Valley in the U.S. When Sun Microsystems collapsed in the wake of the dot-com bubble, dozens of smaller companies were positioned to fill the void.

“Look where Apple and Google headquarters are now. They sit on the old Sun campus,” he said.

But as Canada’s tech giants toppled, there was nothing to emerge from the wreckage.

“In Canada, they just disappeared. If you actually look at many of the best resources that used to belong to Nortel, and BlackBerry, they belong now to Huawei,” Breznitz told CBC News. “That’s a clear indication of a horrific failure of innovation policy and a really horrific environment for the creation of innovation.”

‘We need to go back to basics’

The co-CEO of RIM and the man who helped build the BlackBerry into a global must-have, said there’s an urgent need to need to fix Canada’s innovation problem.

“I have never been more convinced that we need to go back to basics – build capacity for the knowledge-based economy inside our policy community,” said Jim Balsillie, the chair of the Council of Canadian Innovators and founder of the Centre for International Governance Innovation and the Centre for Digital Rights.

A look at a laptop screen with a question and an AI-generated answer.

He is a long-standing advocate for better innovation policies in Canada.

“Canada has no chance of having an innovation-economy until we get our policymakers to understand which way is up,” he wrote in an email to CBC News.

If anything, the global environment has become more challenging than it was when Balsillie was building BlackBerry. Economists like Royce Mendes, managing director at the financial services company Desjardins, said the pressure on Canada is even higher now.

He points to recent developments around AI and features like ChatGPT.

“Innovation is working at a breakneck speed, we need to keep up. We cannot use policies or model the economy in the same way we were in the last century; things are very different today,” Mendes told CBC News.

The first step in getting an innovation plan is making sure policy makers know what innovation means. That may sound simplistic, but most experts agree politicians don’t always have a good handle on the difference between invention and innovation.

An invention, said Breznitz, is a new idea while innovation is about building a market and a system of support to help foster more inventions.

‘Innovation is uncertain and risky’

Once that is settled, the next challenge is convincing Canadian businesses to innovate. And Breznitz said that’s harder than you may think.

“Business leaders are not stupid,” he said. “The profit margins of Canadian businesses are actually extremely high; innovation is uncertain and risky.”

An environment where businesses can make profit without much risk is bound to struggle with innovation, he said. If you look at the biggest companies in Canada, from mining to forestry, from telecommunications companies to banks, there isn’t a lot of competition and the regulatory hurdles are significant, he added.

Businesses like Shopify have shown how innovation can drive growth and profit. Financial services companies like WealthSimple have changed the way Canadians think about the banking sector.

Shopify headquarters in Ottawa in May 2022.

But that level of innovation remains rare in Canada’s elite business circles.

And regulatory obstacles make entrepreneurs think twice before trying to build something in Canada.

Breznitz said an entrepreneur has to consider whether they can build a product. Then that entrepreneur has to think about whether customers will buy the product. But even if you manage to do both, you still don’t know if you’ll be allowed to sell that product in Canada.

“So multiple entrepreneurs and companies just either don’t bother to try, because the uncertainties are so high, including regulatory uncertainty. Or we just move to the U.S. to do that. And they say, excuse my language ‘f–k it,'” said Brenitz. He points to regulations in everything from new green technology, to financial services that prevent businesses from even trying to launch in Canada.

Mendes agrees too much regulation can be an obstacle. But he said the real trick is finding a balance, pointing to the banking crisis which clobbered the U.S. financial system.

“A heavy hand on regulations sometimes can protect the Canadian economy: 2008-2009 is a prime example of that,” said Mendes. “There’s a careful balance that we need to strike between regulation, competitiveness and innovation.”

For all the problems, everyone interviewed for this article expressed a keen sense of optimism about the future. They say Canada has amazing universities that have churned out a highly educated workforce. And slowly, they say, politicians are taking action.

In February, the federal government unveiled the Canada Innovation Corporation, with a hefty $2.6 billion budget over four years.

The CIC will provide funding ranging from $50,000 to $5 million per project. Larger-scale R&D projects could land as much as $20 million per project.

A woman in front of Canadian flags looks up.

Breznitz is being heralded as the architect of the CIC. He sounds cautiously optimistic about its prospects for success.

“In two or three years, we should already start to see some change,” he said. “And then 15 years from now we’ll say, ‘Wow, we actually did it.’ But it’s a very big if.”

One of the best parts of the BlackBerry movie is watching entrepreneurs Mike Lazaridis and Jim Balsillie hustle to grow and build. Their team is thriving. And the world fell in love with their product.

Policy alone can’t replicate that. But government policy absolutely can put in systems that help entrepreneurs thrive and mitigate failures when they happen.

ABOUT THE AUTHOR

Senior Business reporter for CBC News. A former host of On the Money and World Report on CBC Radio, Peter Armstrong has been a foreign correspondent and parliamentary reporter for CBC. Subscribe to Peter’s newsletter here: cbc.ca/mindyourbusiness Twitter: @armstrongcbc

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Credit belongs to : www.cbc.ca

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