In the budget, the government removed the Section 116 tax barrier, a barrier that has prevented Canadian emerging technology companies from obtaining international investment dollars to be truly globally competitive. A summary of Section 116, courtesy of Deloitte (www.deloitte.ca) , is as follows:

Withholding and Section 116 certificate process — The overwhelming majority of foreign VCs are not subject to Canadian tax when they sell an investment, but face a delay of many months to work through the Section 116 tax clearance process until funds can freely flow to them. Many foreign VCs are structured such that each of the investors in the VC — sometimes hundreds or even thousands — is subject to this clearance process as if they held the investment directly. This delay results in lower returns and frequently causes direct financial loss to investors. Canadians who invest in the United States, the United Kingdom and other major global markets do not face such taxes or delays from red tape.

Requirement to file Canadian tax returns by foreigners who don’t owe taxes creates hundreds of pages of unnecessary paperwork — Canada imposed tax filing requirements in circumstances where no taxes were payable by these investors. When a foreign VC sells an investment, each investor of the foreign VC has to file a Canadian tax return even if they don’t owe any taxes. This results in literally hundreds of pages of documents that are required for signature and processing for a single sale. This tax return filing issue also applies to certain Canadian public companies.

What does this mean for emerging technology companies raising funds from foreign investors from the US and abroad? It means those companies with high potential will be able to more easily attract foreign investors. It means that more foreign capital can come into Canada to invest in some of our leading knowledge based enterprises when large amounts of capital are still lacking. It also means that Canada can remain and grow competitively in the global marketplace, showing the world that we are innovators most innovative people and companies in the world.

If you would like more information on Section 116 and the federal budget, there are a plethora of resources including the Government of Canada website. Many of OCRI’s members and partners also have commentary and position papers including the CVCA (www.cvca.ca), BIOTECanada (www.biotech.ca) , CATA Alliance (www.cata.ca) to name just a few. Watch for upcoming professional development sessions from the Investment and Commercialization Group at OCRI (www.ocri.ca/investment ) to further educate CEO’s of emerging technology companies in Ottawa about the impact of this change on raising capital.

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The approach the City chooses  to economic development is key to all of our success.  The consensus now is that we can no longer simply default to expansion of the Federal Public Service as our engine of prosperity.  Your voice in this discussion is important.  I would like to encourage you to participate as well by logging on to OPINIONOTTAWA.CA where you will be able to review position papers on subjects including the role of knowledge-based industries, talent and more and comment on them in the discussion forum.

Please take the time to make your opinion heard as an actively involved member of our community and business leader.  Ottawa has a great economic future filled with potential across so many industries. 

Let’s do what we can to ensure that the City has significant and sincere input that they can use to define an approach to economic development that reflects the realities of our great city!

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IPeak is a great Ottawa example of a company that started with a good technical idea and a desire to learn how to turn that idea into a successful enterprise.  Not only did Matt Williams, founder of IPeak, help develop the company’s core technology but Matt was very open to learning from others who had built companies before.  He was able to gather the best people around him early on to move the business forward.

IPeak was a two-man operation when OCRI’s Investment and Commercialization team began working with them three years ago. When they graduated from the OCRI Business Accelerator they had expanded to seven employees, had secured their first sale, and raised over $1M in angel financing. They also were selected as a winner of the Canada’s Top 10 Competition which gave them exposure to a broad range of investors in Canada and the U.S. at an early stage.

Pulling together the right team has been one of Matt’s key strengths as a founder. He was not afraid to let go of the reigns as CEO and focus on his strengths on the technology side of the business as CTO. Couple that with his passion for the IPeak product and validation from key markets that his company met a market need and he was able to attract a high caliber CEO in Martin Horne to help grow the company to the next stage.

IPeak is just one example of how founders in our portfolio are working to build success in their own verticles and businesses through working with our team. It is an approach we think will result in the growth of more leaders like Matt and more growing, competitive companies like IPeak.

That’s the type of development that OCRI is working towards for Ottawa companies and entrepreneurs.

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It’s easy and tons of fun – register your team online (you can make up your own team – ringers, good skaters, bad skaters, top scorers, no scrappers please). 22 hand picked teams  get to play a minimum of three games and more if you actually can function as a team!  You will also get: certificates for Stanley’s Restaurant & Bar to ensure your team has a good time after the on-ice action is over; a tournament souvenir; and entry into the Wednesday night tournament banquet.

This event is held at THE best facility in the nation’s capital, and put on professionally by a group with an incredible reputation for THE best hockey tournaments anywhere! The Bell Sensplex has 4 arenas (3 NHL, 1 International), a sports bar & restaurant and wireless high speed internet throughout the building! 

Everyone is encouraged to come – bring family, friends and co-workers to cheer your team on. A portion of the proceeds will be donated to a local charity.

Hard to think of a better reason to re-work your day to fit in a hockey game or two….If you’ve played in this tournament before – post details of your favourite play, winning game, most hilarious moment…

More information here: http://www.bellsensplex.ca/tournament-adult-details.php?tID=316

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In the city’s first broadband plan, access to the internet and addressing the digital divide were key issues to overcome in order to become successful in the new global economy.  Programs such as Smart Capital and National Capital FreeNet helped to establish Ottawa as the most connected city in the world.  Not only was technology and access to the technology provided to Ottawa residents, training was also available for those who needed help to develop a level of comfort with the new technology.  Smart Capital was funded by the federal and provincial governments to push forward Ottawa’s broadband connectivity plan. A variety of programs provided the framework for Smart Capital including: Digital Ottawa, Altogether Ottawa, FreeNet, E-Government, Smart Libraries, E-College, E-Democracy and Smart Sites. Today, a number of those programs no longer exist due to the fact that their mission was completed but some continue to serve the community to this day. Their range of services has evolved and changed to reflect the current needs and interests of the local community. 

In addition to technology-based inclusion, Ottawa is a firm believer in providing today’s students and our future leaders with the proper tools they need in order to learn effectively while in school. For that reason, we support learning and skill development for students at all levels through partnerships with the community, government and businesses to develop the talent Ottawa needs to support a globally competitive knowledge-based sector. Some of the community’s most valuable programs in this regard include OttawaReads – a literacy program, JUMP Math – numeracy program, Winning Innovations in Schools (WINS) – joint projects with local cleantech and life science companies for high school students, the High School Technology Program – hands on tech and programming experiences and the School Breakfast Program which provides a nutritious breakfast to 11,000 children in 145 schools each day.   

Did you know? The Ottawa Public Library (OPL) provides services free of charge to increase digital inclusion and the everyday use of technology. The Library works with many local, provincial and national partners to extend and enrich service. Free Internet access has been available at the Ottawa Public Library since 1996 and free high-speed Internet access has been available at all 33 branches of the Ottawa Public Library (OPL) since 2001.  High-speed wireless Internet access was first piloted at the Ottawa Public Library in 2007 and was installed in every branch of the OPL in 2008.  The Ottawa Public Library has 373 public access workstation that provide high speed internet access and a variety of software applications. Wheelchair-accessible computer workstations are available at all wheelchair accessible libraries. All courses at the Ottawa Public Library are offered free of charge. In 2008, 947,499 people used a public Internet access workstation at the OPL. In 2008, the Ottawa Public Library held 376 computer training sessions aimed at teaching older adults and newcomers how to use a personal computer, 1,512 people attended these sessions.

OCRI Entrepreneurship Centre Satellite Kiosks - As entrepreneurial activity spread across the vast Ottawa region it became evident that the one stop shopping approach taken by OCRI’s Entrepreneurship Centre was not adequate for the growing demand for its services. The concept of satellite offices was explored and pilot tested in Orleans with great success. Subsequently, two additional satellite kiosks in Kanata and Barrhaven have been opened.  The impact on the community has been significant while helping minimize costs for staff, travel and overhead and maximizing the use of digital technology to provide easy access services and business advice to constituents.  In 2009 alone, over 1000 people attended networking events hosted at the kiosk centres.

Ottawa Carleton District School Board – Special Education Allocation of laptops to students with Learning Difficulties. Each year, hundreds of laptops are loaned out to students with special needs through this ministry led initiative.  Hundreds of students, teachers and families benefit from this digital inclusion initiative. In the last five months, technical training has been provided to over 600 teachers, on a wide variety of subjects:  wikis, Google Apps, Photoshop Elements, Gizmos, ComicLife, Podcasting, PhotoStory. This year, the school board is introducing a new Interactive Whiteboard (IWB) training for elementary teachers. 

These are just a few of the great examples in Ottawa of programs and initiatives that really do make a difference. By bridging the gap between education and employment and providing access to technology Ottawa is definitely an intelligent city and Canada’s creative economy capital!

More grandstanding to come….

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Thanks to the great people at the City who knew where to get the most current and relevant information re: connectivity and city initiatives and all the other companies in town who are charging ahead with innovative partnerships and programs that help create skilled talent and strive to see them employed in knowledge-based jobs we were able to put together a really impressive proposal.

So, now we’re Top7, awaiting the arrival of representatives from the selection committee for a two day tour of our great city before the final announcement of the Intelligent Community of the Year in New York City in May. 

Just in case you don’t know how many super projects are on the go here’s a rundown of the projects we chose to highlight – there were many more that didn’t make the cut (we were limited to 25 pages)… Ottawa’s Rural Broadband Project, Abbott Point of Care’s Microelectronics Apprenticeship Program, Algonquin’s Game Development Program, Carleton’s VSIM lab, Digital Inclusion programs at the Ottawa Public Libraries, OCRI’s Entrepreneurship Centre satellite kiosks,  Special Education Allocation of laptops to students with Learning Difficulties at Ottawa Carleton District School Board, Lead to Win, City of Ottawa’s 3-1-1 Contact Centre, BizPal, Algonquin’s Virtual College, TalentBridge, High School Technology Program, Passport to Prosperity, Focus on IT (FIT), Wesley Clover’s Affiliate Program and Winning Innovative Networks for Schools (WINS). Like ICF said in their summary, there are almost too many programs in place to list them all!   If your favourite project wasn’t on the list – let me know so we can consider it for the next time.

Regardless of the outcome of the May announcement we should all be really proud! 

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Tomorrow, Claude Haw, President and CEO of OCRI, will speak about Ottawa’s Innovation Strategy in greater detail at the Mayor’s Breakfast at Ottawa City Hall.  Facts are… Ottawa has changed, we’ve got good news, positive momentum and diversity on our side which positions the city well for success in the new creative economy.

Over the next three months, the plan will be rolled out including objectives, targets and action items. Essentially, the Innovation Strategy will provide a road map to ensure that Ottawa’s creative class continues to build wealth and successful new companies.   

Key action items of the innovation strategy will address talent, cluster and ecosystem development, investment attraction and marketing the entire region to the world.

Check out Claude Haw’s article which appeared in this week’s Ottawa Business Journal.  He clearly outlines why and how well Ottawa is on track to becoming a leader in the creative economy.  Just like the article says – Ottawa has changed – and the new reality here includes new companies, new sectors, new success stories, renewed growth, revitalized energy and enormous potential.
 
So the next time someone asks you, “What’s Ottawa like?”, what will you say?  Tell them the real story – that Ottawa is Canada’s creative economy capital.

UPDATE: Claude Haw’s presentation is now available online http://www.ocri.ca/about/publications.asp

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Not long ago, we all gasped as Cognos was seemingly gobbled up by IBM. One of our biggest and best success stories was no longer “ours.”  Rob, who is fiercely loyal, with over 25 years at Cognos walked us through the highs and lows teaching us some important lessons that can enable all of us to be ready and able to adapt to change – regardless of what it is.  Undoubtedly, shift happens and there’s nothing we can do about it other than be on the upside of the transition. How? 1) strategically be prepared to run as a stand alone 2) talk to everyone! be connected and know who to call when you need information or advice 3) make sure your board is aware and informed 4) have up to date projections and 5) continuous strategic planning is mandatory.  Being prepared is the key – a great example of this was the way that Cognos ran simulated takeovers which allowed them to practice reacting, responding and managing all kinds of acquisition scenarios.  By including the board, management, bankers, lawyers in the dry runs, they were able to develop a very high level of readiness. It was an invaluable tool for the company and meant that when Rob received the call from IBM, he knew it was not a CEO’s decision but a board responsibility and the process began, as planned!

IBM’s commitment to building a Smarter Planet in which new intelligence is one of the key pillars, drives a global commitment to improving how the world collects, analyzes and use information.   Cognos is a “pearl” in the IBM necklace which includes some of the best people, technologies and services in the world and the Ottawa team is seen as the centre of IBM’s Analytics expertise.

Takeaways from today:

• innovation will pay off
• you need to follow the shifts
• be prepared
• there are huge opportunities if you follow the right areas including: analytics, social networks, cloud, and mobile with its world changing applications.

You know it was a good event when after the closing remarks and applause, nobody wants to leave.  

Looking forward to Peter Allen of DragonWave who kicks of 2010 on January 28!

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A few other questions were also on point such as “what are the top 2 things a start-up needs to know to really succeed” and “what’s more critical – getting a product out that may have a few glitches or waiting and polishing it to near perfection before you take it to your client.” Pat addressed all these and more in his 45 minute presentation at OCRI’s Technology Executive Breakfast (TEB) this morning.  With eight start-ups in as many years under his belt and dozens more in his repretoire, it was sure to be a very informative and entertaining morning.

There are five things that must happen for any company– start-up or not — to be successful. 

First of all, you must become a “category of one” in the mind of your customers. This entails effective marketing, value positioning, and doing everything you can to win the crucial “bake-off” – especially if you know you deserve to win.  Pat used a great variety of examples that we could all relate to when he explained value positioning and the case of present mode of ops vs future mode of ops (PMO vs FMO). Citing his favourite business book and the evolution of the cable excavator to the back hoe as well as the FIDO phone that makes calls and sends texts to the I-Phone with 9,500 apps he demonstrated that the value of your product must meet and exceed the expectations of the target customer base.   Winning the ever critical technology “bake-off” is a make or break it opportunity for your company. Pat’s experience with BelAir clearly showed how important it is to know your value and position it correctly and then how to rally the team to go back and fight to win.

Adapt and adapt again. Be prepared to fine tune and adjust your approach to make your interface work and increase the impact in order to produce a real solution for your customers.

Simplify the confusing functionality of your technology. Very few people need to know all the bells and whistles that make it work. The black box does more than you think – it can simplify the way you operate, simplify the installation of the application,  present the solution to your customers in simple way, and transform into what everyone likes and appreciates – an easy button.

Scalability is key.  Being a small company, a start-up or a company with a product but no scale inhibits your ability to compete on a global scale.  There are ways around this.  Find a strategic partner or a number of them that can increase your output in order to meet client demands or entice a big brother to take you on. It may takes some coaxing  and baiting with evidence of business and significant returns because big brothers (or companies with scale but no product) don’t typically search out little brothers but the results can be big. Just ask BTI who teamed up with Fujistu in order to deploy massive quantities of product.

Execute.  All great plans must be executed well if they are going to make a difference.  First, the team must be in total alignment and then all efforts must be focussed.  If the team can’t work together – they can never be aligned. You need agreement to align at all stages of the process which has three parts 1) Vision (where are we going), 2) Current Reality (where are we now) and 3) The Plan (how do we get there). It’s a tough job, but it is the CEO’s responsibility to get  everyone to buy-into the alignment concept including the board, the team, the investors and the partners. Once you’ve established that everyone is on the same path, all your efforts, tactics, approaches must be in clear focus to be effective and efficient.  Pat recalled his SiGe experience which showed how important it can be to have a leader with excellent technological skills coupled with fantastic people skills in order to rally the team and align the efforts.  Product lines may need to change, approaches may be tweaked but when the alignment and focus is bang on and the chemistry among the players is solid you can pretty much count on improved performance. Just look at SiGe whose revenues  increased from around $67 M in 2007 to almost $100 M in 2008.

As Pat wrapped up, he explained that he’s learned many more lessons than he could ever cover in a short presentation and that there is always more learning to do.  No matter what business you’re in or what customer you are after, his five key pointers can always apply but admitted there could be more that work.  Teamwork, alignment, chemistry, flexibility, he certainly covered all the bases and in direct response to Mary’s question he added that sometimes you just need to fire someone. 

Great presentation! Looking forward to the next TEB.

©2010 ocriblogs.com. All Rights Reserved.

Tickets are still available through Ticket Master  http://www.ticketmaster.ca/event/100042658B706626    

In addition to the Presentations, there is a tradeshow that is open to the public at no charge from 10:00 am to 3:00 pm happening in the Civic Centre Salons – check out the list of companies that will be at the tradeshow http://www.ocri.ca/showcase/exhibitors.asp

Hope to see you there. Read More

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