Ottawa Citizen reports: Canada is losing ground in the battle to create strong new technology companies because of a failure to take risks at all levels of the economy, the chairman of Tundra Semiconductor said yesterday.Adam Chowaniec told the Microelectronics Forum of the Information Technology Association of Canada that the next generation of Fortune 500 companies is in doubt because the business world, government and universities are not geared to create them.
"We have one Fortune 500 company in Nortel, and ATI is moving in that direction," Mr. Chowaniec said. "But beyond Cognos and Research in Motion, there is not much on the horizon.
"Tundra was the last significant Ottawa company to go public, in 1999. In the meantime, we have lost Newbridge, Catena, QNX Software and many others to outside takeovers."
In the new world of business, organizations can do research, develop and market products and support customers from anywhere in the world.
"When you play in a global market, ownership of the business is critical, because that is where the revenues and profits flow. If you don't have ownership, the benefits tend to drift away."
Mr. Chowaniec said there is an urgent need to address financing, education, marketing and research problems. But ultimately there must be a recognition that taking risks and accepting the occasional failure is critical to growth -- something that is not considered respectable in many circles.
"Why hasn't Terry Matthews received the Order of Canada?"
He said Canada is lagging far behind the U.S. in venture capital financing. The result is that the economic benefit of venture-funded companies on the economy is running at less than two per cent of U.S. levels.
He said Canada has created only 23,000 jobs in technology companies that have received venture capital -- far below the 200,000 it should have if Canada had kept pace with the U.S.
He said major Canadian business institutions are not providing leadership in encouraging investment in new companies.
"Our greatest invention is the income trust, which takes all the profits of a company and gives them to shareholders.
"Rather than build new international operations, our big banks want to merge, which will make no difference to the economy."
Mr. Chowaniec said the federal government is trying to encourage the commercialization of advanced research in recent budgets.
But building successful new companies means close ties among the work of entrepreneurs, researchers, government and marketplaces, he said.
"Today, the important linkages are broken."
He said Canada urgently needs to target university research to the needs of small companies across the country, but that idea is anathema to most politicians.
He said that because of the technology-sector troubles, enrollment in engineering in science programs at universities is at the lowest level in years.
"In five years' time, we will be facing a shortage of talent again. We relied on immigration to meet our needs at peaks in the past, but that does not work very well at times."
Samy Hosny, an Ottawa businessman, is promoting the creation of a microelectronics centre that would create 300 engineering and research jobs in the city.
He is lobbying politicians to fill the void created by the closing of advanced-chip foundry production operations at Nortel Networks.