How can Ontario create a sustained competitive advantage? What assets can it build on, where should it invest? The perspectives of some CEOs and futurists.
What will Ontario look like in 20 years?
Will the province evolve into a harmoniously diverse and talented society that has embraced the opportunities and jobs of the fourth industrial revolution, emerging as a prosperous hub for culture, sports and technology, a centre for new and reinvented products, services and business models, an exporter to the world? Or will Ontario fall victim to disruptive technologies that lead to declining growth, employment and incomes, as determined and inventive companies in other locations take market share and jobs from Ontario-based businesses?
To gain deeper insight, we asked 33 CEOs and “futurists” headquartered or operating in Ontario — a group spanning all major sectors of the province’s economy — some questions based on fundamental issues: How can Ontario create a sustained competitive advantage over the next 20 years? What assets can we build on, what is slowing us down, where should we invest? We published our results in September in The Future Is Not Destiny: CEO Perspectives on Realizing Ontario’s Potential.
This dialogue was rooted in humility. CEOs and futurists were the first to admit they did not have a crystal ball. In a climate of growing uncertainty, their focus is on how to create advantage amid powerful external forces — steering the future instead of predicting it. But a couple of clear themes became evident:
- Widespread optimism for Ontario’s future. Ontario is a great place to live and work, offering a quality of life among the best in the world. The province and Canada overall have abundant natural resources, a well-trained labour force, strength in diversity and privileged access to the US and European markets. We have the assets for a bright pathway toward consistent growth.
- A need to transform. To sustain and build on our prosperity, we will need to transform Ontario’s economy and find new sources of growth. The drivers of economic expansion are shifting, and realizing Ontario’s promise will require skillful navigation and bold action. As in managing a specific business, deep understanding of our present attributes and sharp focus on optimal investments will be needed.
Among the nine dimensions of competitiveness that we tested (figure 1), talent stood out as our biggest strength. The province is home to a diverse population of highly skilled workers, and we have a strong educational platform. Abundant multiculturalism enriches the workforce, both by providing access to a broader pool of workers and skills and by helping businesses develop new international markets. Indeed, talent access and development and international talent attraction and integration were two of Ontario’s top three advantages.
Rounding out the top three — in second place — was the level and quality of research in the province. As one CEO put it: “We stand tall on research.” Across sectors such as information and communications technology, manufacturing, financial services and health care, research is a critical advantage, one expected to play an even bigger role in the future.
So what is slowing us down? Research commercialization capacity, capital commitment to innovation and risk-taking culture ranked the lowest for Ontario.
Overall, the innovation ecosystem is seen to be getting stronger and stronger, with many examples of excellent companies that are winning in the global marketplace. But CEOs lamented that there are too many organizations not investing to compete globally, and too often our best science is being commercialized in the United States. There has been impressive growth in start-ups, but the later-stage financing that is needed to scale companies globally can be hard to access. New ventures also find it hard to get big customers at home in the early going because Canadian companies and governments are skittish about taking a chance on Ontario-based ventures before they have proven themselves elsewhere.
Ultimately, a set of substantive ideas on how to realize Ontario’s promise emerged from our dialogue. These ideas focused on bold actions to further grow talent, to move more quickly in embracing disruptive new technologies and to share our story as we build our brand.
Moreover, a set of clear imperatives took shape. Ontario needs to do the following:
- Grow talent to increase investment. Despite a strong talent base, we are still supply constrained in many new disciplines. Increasing the supply of talent will attract new investments, which will in turn increase the demand for talent. Building domestic talent requires an educational system that is aligned with 21st-century skills — from coding to critical analysis to collaborative problem solving — and companies that are willing to invest in lifelong learning for their employees. With the US looking increasingly inward, Canada’s ability to attract leading talent from outside is unusual. The conditions are in place, and corporations and governments need to follow through on new immigration processes such as fast-track visas for companies facing critical skills gaps.
- Move faster on new technologies and take calculated risks in experimentation. CEOs, especially the futurists, stressed the importance of embracing new disruptive technologies to develop competitive advantage. These technologies are coming or are already here, and companies that experiment early and invest shrewdly will be the winners. Horizontal or platform capabilities such as machine learning and artificial intelligence, big data analytics and digital security were all ranked highly. Indeed, more than 80 percent of the CEOs and futurists ranked machine learning and artificial intelligence as the most disruptive technology (see figure 2). They recommended that Ontario attempt to embrace this technology as quickly as possible, before other jurisdictions crowd the market.
- Build Canada as a brand. Finally, we need to do more to build Brand Canada, both as a mark of quality to attract customers the world over and as a destination for further talent and capital. Canada’s stable democracy, inclusive society and openness to trade and immigration are increasingly valued around the world. We need to seize this moment and use it to build competitive advantage in Canada.
While our future is not destiny, it is in our hands to realize the promise of a more prosperous future.
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