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As chair of the Council of Canadian Innovators, Balsillie is spearheading an effort to shape public policy to help companies scale globally. The problem, as he sees it, is that policy-makers haven’t recognized that competing in technology is fundamentally different from how it’s done in traditional industries. Balsillie is the rare Canadian exec who’s actually scaled a tech firm. As co-CEO of BlackBerry (he stepped down in 2012), Balsillie built the business and commercialization strategy that helped turn the company into a global player that hit $19.9 billion in revenue at its peak.
How so? Intellectual property [IP] works on a principle of restricted rights or constraints—essentially, government-granted monopolies. The government makes the market for ideas and intellectual property. It’s the exact opposite of free trade and of the traditional economy. You only have a market if the government’s there. And you only have a market that advances prosperity if CEOs and the policy community are talking. You need to understand that we’re decades late in this approach. This is how I saw innovation economies work around the world, and we don’t teach it. You cannot craft policies in a sophisticated fashion if you don’t understand how the game is played. It’s like playing chess and not understanding how the pieces move.
If commercialization is the problem in Canada, then that presumes there’s an abundance of unique, original ideas here, right? We’re world-class in ideas. We invented the Internet search engine. That was OpenText. The University of Toronto invented the touch screen. We have invented lots of great stuff. And that shows in science and technology—we get lots of peer-cited stuff.
You said earlier that we’re decades behind other countries. So why isn’t the situation hopeless? There’s tremendous reason for optimism. First, Canada has tremendous entrepreneurs. Those I’ve encountered are incredibly smart, hard-working, and globally oriented. The agent of innovation is an entrepreneur, with a company and a product. So if you have that, that’s the first basis of optimism. The second is I’ve found a handful of senior civil servants in Ottawa and Queen’s Park who are very open-minded about updating policies. The third is that both of these communities are ready to meet each other and start to figure this out.
What has to change first? The most important thing is education. We have not updated our policy thinking since the 1980s. It’s the same discourse. This includes entrepreneurs, policy-makers, the business community and educators. Getting money for ideas and managing restriction systems is a very precise, technical and surgical exercise. And we don’t teach it. We’ve had a bunch of failed policies and outcomes. When they didn’t work, the narrative of the policy community—unsubstantiated by any facts—was to say Canadians have a lack of fire in the belly. We’re not outward looking. Too complacent. They say all this stuff and they make it up, because their orthodoxy didn’t work out. If you don’t teach CEOs how the game is played, if you don’t mentor them, if you don’t have an ecosystem that supports the game, how do you expect anybody to scale? When you tell your entrepreneurs that it’s a hands-off, free market out there, you’re sending them to a gunfight with a knife.
You’ve been quite vocal in your criticism of the Trans-Pacific Partnership, or TPP, saying it benefits countries that already play the standards and regulations game. Canada hasn’t ratified it yet. What’s your read on whether that will happen? It’s become political football during the U.S. election season. I don’t know what’s going to happen any better than anyone else. But TPP is not a free-trade deal. The free-trade gains from TPP are a rounding error. Barack Obama has said publicly that TPP is about writing the rules for the 21st-century economy. It’s about controlling the rules of the restriction systems in a way that helps those companies that have large, pre-existing IP positions. Canada has only one of those companies, which I built, called RIM. I’m simply saying TPP makes it much harder for a smaller emerging company to break into the club.
You said in a talk to entrepreneurs in August that TPP will make it “impossible” for them to scale globally. Is it truly that definitive? Without a doubt. There will never be another company like RIM in Canada because we’ll have locked in a rule system that makes it much, much harder for new players to emerge.
Until a year ago, you were keeping somewhat of a low profile. Was there a moment you decided to take this on? I was at a conference for technology CEOs a couple of years ago, and a former head of Canada’s civil service said the government has done all of the policies right, and now it’s time for the business community to step up. I had had more than one interaction trying to explain to that community that, “No, no, no, you’ve got to understand that it’s different now.” The orthodoxy was so set in. When he said that, I thought, These guys are just driving these poor entrepreneurs over the cliff. It was my Martin Luther moment.
Via our friends at CB.