25 Jan 2017 How The Canadian Government Can Support Local Technology Companies Through Procurement
Content provided by Appnovation.
Since I founded Appnovation in 2007, a Vancouver headquartered Open Technologies Software Company; we have grown the company to a team of more than 240 staff members across three continents. Throughout our history of rapid growth, the Canadian government has provided various programs to help us get to where we are today. This includes programs such as SR&ED and IRAP. All of these programs enable us to innovate and compete against better-funded companies in the United States.
During our history, the government sector has also been one of our key verticals. In fact, about 25% of Appnovation’s revenue today is from the government sector. With this said, in the history of our company, we have only had two Canadian government customers. Our biggest government customers are all in the United States and the UK. If we look at the history of Appnovation, the Canadian government accounts for less than 1% of our revenues. All this happened while we kept growing our business with government authorities such as the California State Government and the UK Tax Agency (HMRC).
When I ask my peers at other Vancouver technology companies, what percentage of their business comes from the Canadian government, I hear similar stories. Most of my peers also derive a small part of their business from the Canadian government. As a Canadian entrepreneur, this is quite concerning for me.
I have heard of programs such as the Build in Canada Innovation Program where there are tenders aimed at innovative Canadian companies. We have also looked at joining this program, but unfortunately, most of the requests for information or proposals tend to be focused around the defense or alternative energy sectors. It is quite rare for “enterprise software” companies to find requests relevant for their business.
I personally am excited about the commitment from the Trudeau government to Canada’s technology sector. The launch of the recent consultation on “Canada’s Innovation Agenda” is a great step forward. From reading the report, there are several great ideas on how the government can better support the innovation sector.
Now that the government is working on new initiatives to drive the Canadian innovation sector, I recommend the following ideas:
1. Implementation of a SME Procurement System like United Kingdom’s G-Cloud: the UK Cloud enables SMEs to pre-qualify for government opportunities. By ensuring that opportunities are targeted towards SMEs, the government can ensure that smaller innovative companies have a fair chance at getting a greater share of the government budgets.
2. Enhancement of Funding on Commercialization of Innovative Products and Services: there are currently some great programs such as Canada Export which helps Canadian companies commercialize their innovative products. Unfortunately, one area these programs seldom cover is the cost to hire experienced sales and marketing full time staff. For a lot of companies, investment in Sales and Marketing headcount is bigger than investing in areas such as trade shows. I believe inclusion of funding for such roles will be beneficial for many innovative companies.
Appnovation and other innovative companies look forward to exploring further how we can partner with the Canadian government to better support local technology companies.