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From Friday’s Globe and Mail
Published Thursday, Oct. 28, 2010 12:18PM EDT
Last updated Thursday, Oct. 28, 2010 5:58PM EDT
Speaking at a conference on innovation Thursday, Royal Bank of Canada (RY-T54.390.270.50%) president Gordon Nixon said newcomers are “one of Canada’s great competitive advantages,” along with our resource base and the country’s location next to the largest market in the world.
Innovation in turbulent times
“This is a country that to a large degree has been built by newcomers willing to take risks” he said, and those attitudes should now help Canada shift to a culture of innovation at a time when many established executives are complacent and risk-averse.
Other speakers at the conference, held at the MaRS centre in Toronto agreed that welcoming more immigrants is key to making Canada more competitive.
“I absolutely believe that ongoing immigration is going to turbo-charge this economy going forward,” said Loudon Owen, managing partner of venture capital firm McLean Watson Capital.
Immigrants have a fresh view of Canada, and bring ideas from their country of origin that may be new to Canada, he said. They are often driven to succeed in ways that Canadians aren’t, he added.
Mr. Nixon told the conference that Canada has lots of early stage research that has the potential to be developed into innovative businesses, but the “Achilles heel” is financing startups.
But banks can play only a limited role at that point, he said, because they are not equipped to make equity investments at the venture capital stage.
“We are not venture capitalists, we are bankers,” he said. “It is unrealistic to expect (banks) to put money up at that early stage as equity investors.” Regulatory requirements such as “mark-to-market” rules make it impractical to do this, he said, so the banks’ main financial role must be limited to debt lending at later stages of a companies’ development.
Still, he said, banks can often act as “facilitators” to help connect entrepreneurs to angel investors and venture capital firms.
Governments also have a key role in providing research tax credits and creating specialty funds to help boost innovation, Mr. Nixon said.
The creation of a large knowledged-base sector is crucial, he said, because growth in resource-based businesses is not going to create enough employment to change what has so far been a jobless recovery
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