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Shopify CEO frustrated by Canada, a land of tech ‘micro-companies’

Shopify founder warns about U.S. tech giants invading the Canadian market

Shopify CEO Tobias Lutke insists Canada needs more of one type of technology company — big.

The man behind the popular Ottawa-based e-commerce platform said 98 per cent of today’s roughly 40,000 Canadian tech firms are “micro-companies.” That’s a problem, he said, if the country is serious about becoming a global hub for high-tech innovation.

“What we need is a couple of bigger tech companies, because they have a very outsized impact on the ecosystem,” he told the Elevate tech week conference in Toronto on Tuesday. “I can talk about this from a personal experience of having a hyper-growth company for the last 12 years now.”

Shopify’s (SHOP.TO) growth been a virtual outlier in Canada’s tech sector, which has produced few global breakout stars since the height of BlackBerry’s (BB.TO) popularity in the early 2000s.

Innovation, Science and Economic Development Minister Navdeep Bains joined Lutke on stage for the discussion, which ranged from the importance of teaching computer coding, to the need for better high-speed internet access in rural Canada, and stronger protections for intellectual property.

The sit-down between the government minister and the tech industry leader coincided with the release of an interim report on Canada’s global competitiveness, including proposals on six “high-growth potential” sectors.

The chapter on digital industries found Canada is “exporting our most precious assets to the benefit of other countries,” and “needs to double down on our own inventiveness to capture more of that wealth at home.”

Bains said Canada has fallen behind the U.S., China and European countries when it comes to protecting intellectual property.

“Only nine per cent of small business actually have intellectual property. Only 10 per cent actually have IP strategies,” he told attendees at the conference.

Lutke, who chairs the federal government’s digital industries table, said he hopes visitors to Canada will one day be in awe of the country’s tech sector. The CEO went so far as to say he wants people to feel like they left a time machine to the future when they arrive.

Both he and Bains are confident that the “all hands on deck” approach being led by industry and supported by government will see that dream realized in time.

“At this point right now, a lot of companies sell (to an international buyer). That is something that hasn’t been addressed by the spectrum of government programs before,” said Lutke.

“Governments aren’t going to pick winners and losers,” said Bains. “We’re not in the business of betting on a particular technology. We want to create the conditions for success.”

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