In the early 1990s, Estonia emerged from the collapse of the Soviet Union with little capital and a limited industrial base. It had no obvious path forward as an emerging nation looking to define itself. It made a deliberate bet: treat its entrepreneurial class as a national asset to help grow and scale companies that could establish the country’s reputation as a nation of builders and founders. Today, Estonia has more unicorn companies — privately held startups valued at over US$1 billion — per capita than any country on Earth. Skype was built there. So were Wise and Bolt. A country of 1.3 million people decided to take control of its own future, and it did. Similarly, Germany’s post-war recovery was not built on a handful of dominant conglomerates, but on what they refer to as the Mittelstand: hundreds of thousands of small and medium-sized manufacturers . They now account for more than half of Germany’s economic output and nearly 60 per cent of its jobs. More than 600 of them are world market leaders in their fields. This was the product of a deliberate government decision to build from the middle out, rather than from the top down. Canada has never made that bet on the same scale. What we have instead is a small number of large, entrenched players. These are the oligopolies and family dynasties that have shaped our economy for generations. That’s what happens when capital concentrates and procurement flows to the familiar; when we play it safe, ostensibly. The result is a country where the instinct to build something from scratch is not rewarded, and where the fastest path to scale often runs through a foreign parent company. The resulting brain drain is a policy failure with a long history and a familiar shape. We train exceptional engineers and founders and then watch them leave because there is rarely anything here worth staying for. As I built my defence company in Canada, the same story surfaced again and again. I met with sharp, hard-working Canadian engineers who had spent years in the United States. It wasn’t so much that they wanted to leave, but they knew that if they stayed, they would be cogs in large, foreign machines, advancing another country’s IP and contributing to another country’s future. It was good work, it paid well, but it was neither theirs nor Canada’s to own. There are Canadians who want to come home, but only if there is something worth building here. Keeping our best and brightest from going south requires the kind of environment that gives an entrepreneurial Canadian a reason to bet on their country. That means procurement that moves at speeds required for a startup. It means contracts structured to build and scale domestic IP. It also means a culture inside government that treats an initial purchase contract as a bet on a future Canadian success story, instead of a financial risk. As a country, we also need to dream big. To borrow a sport analogy, we need to go for gold, and not just a podium finish, to attract top talent. Most of Canada’s legacy industrial policy was calibrated for safety and designed to minimize risk rather than maximize outcome. We set our sights on participation and being a respected supplier, but that is not how you build an industry or retain the talent to sustain it. Opinion: Canada’s competitiveness should start in the classroomFinding domestic workers may hamper progress on new defence industrial strategy Canada’s Defence Industrial Strategy marks a new path forward, but it must be executed with that same unflinching intent. The Build-Partner-Buy framework is correct in principle, but frameworks must be matched by real action. Initial purchase contracts and procurement speed are two concepts we must embrace. For a promising founder, the signal that the government will support and buy from our country’s emerging defence primes will be the difference between staying in Kanata or taking a call from a defence contractor in Virginia. Canada is beginning to understand this. Private capital is moving into defence in ways it has not for decades. The federal government has promised to reimagine the procurement cycle to move at the speed this moment requires. The brain drain is not inevitable but the consequence of past decisions. We have an opportunity to choose a different path and truly harness the ingenuity of Canadian founders. Eliot Pence is the founder and CEO of Dominion Dynamics
Highly skilled Canadian workers want to come home — but we need to give them a reason
