Procurement and adoption in Canada of homegrown digital technologies and services is key to growing the country’s economy, say industry and innovation leaders.

Canada also needs to take more risks, accept that failure is part of innovation, and celebrate successful innovative Canadian companies, they said during a webinar by the Canadian Science and Policy Centre.

“Canada, whether it’s private sector or public sector, needs to be the first customer for innovative companies,” Sue Paish (photo at right), CEO of the Vancouver-based federally funded DIGITAL innovation cluster.

Canada is a global leader when it comes to research. “But we kind of stop there and forget that research that is not actually commercialized, deployed for the benefit of industrial growth and economic success is really important, but it actually doesn’t help build the economy of the country,” she said.

Canada has a long-standing culture of confusing a process with an outcome, Paish said. “We quite often celebrate the process and then forget about the outcome.”

“If we aren’t looking at innovation as a pathway to develop and deliver products and services – and we only focus on the processes and the procedures that we use to help the development and we don’t talk about the outcome – it then it’s really a nice conversation, but [we’re] not doing anything to build the economy or drive the productivity improvements that this country needs,” Paish said.

“There is a tendency in Canada to confuse research with innovation excellence,” agreed Alexandra Daoud (photo at right), chair of Quantum Industry Canada, and strategic advisor and fractional chief IP officer at Montreal-based Daoud IP.

“Innovation should create value. That is the defining characteristic of innovation,” she said.

When it comes to procurement, “Current timelines and contracting rules are misaligned with startup realities,” Daoud said.

Webinar moderator Andrew Maxwell (photo at left), Bergeon Chair in Technology Entrepreneurship at York University, noted that the outcome of university research is scientific publications and universities are embedded in that outcome because of the tenure system.

“All the things that we do tend to focus on publications. That’s our metric, that’s how we’re measured,” he said.

“Isn’t there a need to need to recognize that getting your research in use is just as valuable as getting published?” Maxwell asked.

Daoud said another challenge is that the federal government is very slow to procure innovations from domestic companies.

This lack of procurement is a big challenge for smaller quantum firms, where early market validation is so important, she said.

Canada also has a very risk-adverse venture capital environment for funding deep tech. This means fledging Canadian quantum companies consider selling early or relocating or getting absorbed by a foreign ecosystem, Daoud said.

Canada should see innovation not only as a way to create wealth, but as a way to control and ensure our sovereignty, said Julien Billot (photo at right),  CEO of the federally funded, Montreal-based SCALE AI innovation cluster.

SCALE AI has developed a “bottom-up” approach to innovation that connects researchers with companies, he said.

The companies can test their innovation, attract customers, “and when you have customers you can have much better products and raise much more money,” he said.

Supporting local demand should be seen as a very critical factor to support innovation, Billot said. “It’s really about [technology] adoption is a key and the importance of having a very big internal market.”

Government should spend much more time on supporting local demand and local markets,” he said. “If we have great ideas and no customers, at the end of the day these ideas will be bought by somebody else or will disappear.”

Government should support more technology adoption, Billot said, “not adoption to integrate U.S. products – adoption to integrate Canadian-based solutions and Canadian-based IP.”

Canada needs to pick winning sectors and procure domestic technologies

Canada needs to pick its winning sectors where it has a competitive advantage, said Cameron Schuler (photo at right), chief commercialization officer and vice-president, industry innovation at the Vector Institute.

“Let’s pick the things where we have the inputs to be successful and let’s go after those,” he said.

Driving commercial outcomes and adoption comes down to: “How do you make technology faster than anyone else?” he said.

Canada has an abundance of talent in artificial intelligence, Schuler noted. For graduate students that work with the Vector Institute, he said, 90 percent of those with Masters degrees and more than 80 percent of those with PhDs stay in Canada.

The Vector Institute has more than 30 large enterprise partners representing $1.5 trillion in revenue and 3.5 million to 4 million employees, he said.

The institute works with hundreds of Canadian small and medium-sized enterprises that develop technology and have worked on over 500 different use cases.

“It is based on technology created at Vector. These companies are able to commercialize it from there,” Shuler said.

Companies have said they’ve been able to significantly cut their technology deployment times by working with the Vector Institute, he noted. “That’s a combination of knowledge transfer, how to use the technology, and actual physical code that they can use.”

Even though the Vector Institute works with hundreds of researchers, “we’re in a position where we can have a very strong focus on how do we actually drive adoption,” Schuler said.

Paish said the five federally funded global innovation clusters, announced in 2018, are “bearing fruit” after seven years of operation.

Since 2018, DIGITAL has produced 12 times return on investment, with $324 million of investment driving $4.3 billion in GDP, she said.

DIGITAL-supported projects with industry and academia have created 34,000 jobs and produced 190 products and services in commercial markets, “driving revenue for small companies.”

“When you bring the builders of technology with the buyers of technology together in an environment where they actually work together, you have the opportunity to have your adopter – your customer – your customer – right there,” Paish said.

However, she pointed out that over-regulation is one of the top three challenges – along with commercialization and technology adoption – in Canada.

“The degree to which companies, innovation and the [digital and high-tech] sector overall are regulated really does choke out many, many small companies who just can’t afford the time or the expense and don’t have the bandwidth to go through the procedural hurdles and the regulatory hurdles to get a product to market, let alone adoption.”

When it comes to procurement, companies can go to the National Health Service (NHS) in the U.K. and essentially make one set of submissions to a procurement facility to get approval or not through the NHS, Paish said.

But in Canada, in just one province – British Columbia – procurement approval requires 28 different vehicles for submission, she said.

“If each province had one procurement approach, that would significantly enhance the ability to deploy some of the health care technology that’s grown out of some of the best health research in the world and fantastic technologies coming out. But they’re not being deployed in Canada,” Paish said.

Telewound Care Canada, Orphyx Medical Technologies, and MetaOptima Technology are all examples of companies that have developed innovative medical technologies that have sales and are being used in other countries, but not in Canada.

Telewound uses AI to deliver remote wound care to the most vulnerable patients. Orphyx offers a sensor-based insole and accompanying program that monitors foot health in diabetes. MetaOptima’s skin-magnifying technology enables patients to take medical-grade images for early detection of skin cancer; the company also offers a dermatology imaging platform for physicians.

Paish said the companies that DIGITAL works with often say that before they can get even a meeting, let alone a fulsome conversation with a potential customer in Canada, potential customers want to know where else the company’s technology has been adopted.

Canadian adopters, whether in the private sector or public sector, need to see Canadian technologies as their first choice – not as the choice they will make after the U.S. had adopted the technology, she said.

“Whether that adopter is a college in Canada or a ministry in a province or a Canadian private sector organization, that cultural shift can fundamentally change the trajectory of innovation adoption, company growth, economic growth, and [produce] a net virtual circle of having research feed the innovation engine that feeds the commercialization that then feeds the adoption and the growth,” she said.

Celebrate and amplify Canadian successes

Billot said encouraging innovation is fine, but Canada needs to move from “isolated innovation” to creating industry players that have industrial solutions they commercialize locally and then internationally.

“At the end of the day, if you want to be a sovereign country, you need to have an industry that’s able to create homegrown solutions and Canadian IP world solutions, and with a sufficient critical mass so that all these companies are not bought one after another by the U.S. or by other countries,” he said.

Shuler pointed out that Canada ranks eighth in the world for artificial intelligence, but used to be third. The companies that work with the Vector Institute, including Canada’s banks, are leaders in AI adoption, he added.

However, when it comes to investment in the digital sector and high-tech companies, Canada needs to drive a sense of urgency in attracting private investment, Shuler said.

“Data sovereignty really matters,” he added. “Our data is being used [by U.S. tech multinationals] to monetize us after we’ve already paid.”

Evan Solomon, federal minister of AI and digital innovation, told reporters this month that the updated national AI strategy will expand the government’s Buy Canadian policy to digital infrastructure and using Canadian-made technology whenever possible.

Budget 2025 included a $925.6-million investment over five years to develop a large-scale, sovereign public AI infrastructure and a Canadian Cloud. The budget also committed to a new Office of Digital Transformation to lead the federal government’s adoption of AI and other new technologies.

Daoud said government not only needs to provide more support to industry but also needs to understand industry more. “Communication between government and industry is really key when we’re trying to generate the most value.”

Canada should be taking advantage of the shifting global landscape to reboot the country’s National Quantum Strategy and transform it into an industry-led, mission-oriented strategy that focuses on commercialization, manufacturing and adoption, she said.

Startups also need to a better job of transitioning from being research labs to actual deep tech businesses that focus on value creation and commercialization, Daoud said. “We see spinoffs from research labs that continue to operate very much the same way they did when [they were] in the lab.”

There needs to be better guidance or some sort of system to help startups make the transition from lab to commercial business, Daoud suggested.

Paish said the organizations DIGITAL works with get a lot of encouragement and engagement from the federal and provincial governments at the startup stage.

But then they grow to 50 employees and perhaps get an international customer, “and then it’s often as if nobody’s home in the government context. The company is on its own.”

Canada needs to celebrate not only the startups but the scaling companies when they reach milestones, Paish said.

“We need to celebrate and amplify the successes that Canada has in the technology space, and marrying research, innovation, tech startups, growth and adoption, not just to build a better Canada but to build a better world through Canadian technology.”

The COVID pandemic showed that Canada can shuck off its risk-adverse culture and move fast to deliver life-saving vaccines and other technologies, Paish noted.

During COVID, DIGITAL was able to deploy $60 million in investment in 60 days to mostly SMES to develop technologies for us to combat the virus.

“We’ve got a lot of challenges. They’re just amplified a little bit by the geopolitical shifts, but they’re not new. They’ve been around for decades,” Paish said.

“And we have the solutions right at our fingertips. We just need to act on them.”

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