Action required to enhance Ontario's status as fourth largest global cybersecurity hub

A new report on Ontario's potential for becoming a global cybersecurity innovation hub says the province must act quickly or be overtaken by competitors. It is urging action in all five areas deemed essential for a healthy innovation hub – infrastructure, talent, ideas, access to capital and markets.

Commissioned by the Ontario Centres of Excellence and the Toronto Financial Services Alliance, the report says the vibrancy of the cybersecurity sector is strongly linked to the future of innovation in the financial services sector. It depends on an adequate supply of talent, greater collaboration between R&D and cybersecurity problems.

The report recommends more R&D and investment in areas of strength, and a coordinated strategy as well as policy and regulatory support for innovation.

Canada's cybersecurity ecosystem is currently ranked fourth globally with the greatest concentration in Ontario, supported by natural clusters in the Toronto, Ottawa, and Kitchener-Waterloo regions. The large majority of firms active in the sector are small (39%) or medium in size (27%) with strength in data protection, identity and access management, and application security products and services. R&D is also strong in the province, particularly in the areas of machine learning and artificial intelligence, quantum computing, block chain technology and privacy.

Venture capital is active in the sector, with $58 million flowing to 10 Ontario firms in 2015. There is also a vibrant network of incubators and accelerators to support industry growth.

But the report notes that the regulatory environment is unclear and "may hinder innovation in both fintech and cybersecurity". Cybersecurity innovators are also facing a visibility problem and a "relatively risk-averse domestic client base".

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