Problems of the Future

Is Alberta’s innovation ecosystem designed to help solve the problems of the future? Are we being short-sighted with the support programs now in place? I think we might be.

I read an interesting interview with the new CEO of Innovate Edmonton, Catherine Warren last week who indicated that one of her goals is to ”position Edmonton as an innovation capital ripe to tackle megatrends such as the climate emergency, public health and feeding the world."

Those are broad goals but if you want to start a company as an entrepreneur, what does that mean for you? What should the next generation of entrepreneurs focus upon?

I get asked this question a lot and my response is to make the choice based on a problem that needs to be solved – and to make sure that problem is worth solving. Problem selection is the number one thing to think about.

What are the problems of the future?

But, where do we find these problems? Problems that need to be solved are everywhere and if I asked a group of people to brainstorm a list of what problems society will be facing in the future, I suspect there would be a lot of overlap with Catherine’s comments of “climate emergency, public health and feeding the world”. 

I would list things like mitigating the impact of climate change, shifting to low carbon energy sources, treating an aging population, reducing healthcare costs or even how to come up with vaccines more quickly during a pandemic.

There are many product opportunities buried within these generational challenges and all have global market potential. 

Looking a bit deeper, it would also be safe to say that potential solutions for these problems will very likely involve some sort of physical element. It won’t just be software, a digital solution or branch of artificial intelligence represented by ones and zeros.

There will be atoms involved as physical components will need to be married with digital ones. Low carbon energy sources such as hydrogen will require a new type of combustion engine; raising sea levels due to climate change will require new types of engineered physical barriers; an aging society will need newly designed physical facilities and treatment tools; and improving labour productivity on construction work sites will need advances in robotics.

What I find interesting – and what I would suggest is a key challenge facing Innovate Edmonton as it starts up – is that our existing innovation ecosystem support system (in Edmonton at least) is not well equipped to develop new and innovative hardware-related components. The vast majority of funding, programs and facilities in place today mainly support the development of digital products. 

VCs in Alberta Prefer Software Deals Over Hardware Deals

In fact, in many conversations with VCs, there is a clear and almost overwhelming preference to fund software or digital companies versus hardware-focused companies. I can understand why - hardware represents another element of technical risk, development timelines are longer and in general profit margins are lower. However, if that attitude prevails locally, we may be missing out on some great opportunities.

The Existing Innovation Ecosystem Perpetuates This Preference

Creating digitally-based products requires people, office space, computers and rock-solid internet connections and this is what most of our community support programs are geared to support.

In contrast, if I wanted to take a soldering iron or a circular saw into a co-working space or other office building downtown to build a physical product, I would probably be kicked out for violating the fire code.

Aside from the wet lab spaces available at Enterprise Square and TEC Edmonton (and what is their future with the upcoming wind down of TEC Edmonton?), we lack the “maker spaces” in downtown Edmonton that can be genesis of product solutions with a physical component. 

To build-out these out from scratch it would take millions of dollars and many years before funding and space were secured and programs became operational.

Fortunately, before this happens, there is an interim solution (in theory). World class lab, testing and development spaces already exist locally and most are only a 10 minute LRT ride from the downtown core.

Both the University of Alberta and NAIT already have excellent facilities in place as does Alberta Innovates in those big red (former Alberta Research Council) buildings south of 23rd avenue and east of Calgary Trail.

The downside of these existing facilities is how difficult it is for entrepreneurs to access to them. In most cases, the time, expense and bureaucracy involved to put a project together creates too much friction to make it worthwhile for an entrepreneur to even consider. I'm sure there are logical reasons why but they are an under utilized resource.

Some programs like the NanoFab in the Faculty of Engineering at the U of A offer open access but what about the millions and millions of dollars in other facilities that are currently in place? 

As a specific example, did you know there is an autonomous vehicle testbed infrastructure in place at the University of Alberta South Campus (next to the Saville Centre)? I was involved in two potential startups (one local and one based in Asia) who could have used this infrastructure and in turn it would have been a key reason for them to grow their operations in Edmonton. Unfortunately, after repeated inquiries even at the highest levels at the U of A, I was not able to get even basic information on how this test infrastructure could be made available to startups or other external companies. More recently the U of A and Telus announced a $15 million investment in a partnership for a "5G living lab" that highlighted this same test facility. This is great news but what was absent from the announcement was how the startup community and the private sector could take advantage of it (the U of A's focus remains on research).

Under-utilized assets are a wasted opportunity for our entrepreneurial community. These facilities are predominately paid for by the Alberta tax payer and I can’t help to think that making access easier (both for startups and established businesses) would fuel the creation of a whole new series of hardware-centric startups that will solve the problems of the future.

Isn't this is a solvable problem? Any ideas on how we can change?