[Report] A New North Star: Canadian Competitiveness in an Intangibles Economy

Public Policy Forum | Robert Asselin and Sean Speer | April 4, 2019

a new north star canadian competitiveness - [Report] A New North Star:  Canadian Competitiveness in an Intangibles EconomyRise of the intangibles

When New England Patriots quarterback Tom Brady played in his first Super Bowl in 2002, there was no iTunes store, no Facebook, no Instagram, no Airbnb, no Gmail and no Skype. Today the companies who own these intangible assets are worth more than $4 trillion. The rise of the intangibles economy will have sweeping policy implications that will become clearer over time. Nobody knows for sure where this is heading.

Our overriding objective in this paper is to help catalyze a bi-partisan policy discussion about a new “north star” for Canada’s economic competitiveness and the types of policy reforms needed to start us on this path. As part of this process, we set out a series of policy recommendations that cover the classic drivers of competitiveness such as taxation and regulation and drivers for the intangibles economy such as data governance, intellectual property retention, and the race for talent. But as important as these prescriptions are, the main takeaway for policymakers and the Canadian public is that the rise of the intangibles economy requires that we test old assumptions and are open to new thinking. Canada’s economy cannot afford complacency in this new economic era.

We need a new competitiveness consensus

In the world of policy and politics, short-termism and complacency are difficult to resist. They trump partisanship. They trump best intentions. Pressure mounts on any government or political party to respond to immediate issues and keep an eye fixed on the four-year election cycle. Both of us observed these demands in our respective positions as economic advisers to national governments.

See: 

Advancing Competition in a Changing Marketplace

Competition Bureau weighs in on fintech: urgent action required

Canada’s Regulatory System for Fintech is Complex, Costly and Chaotic. It is Stifling Fintech Innovation

NCFA Letter to Ontario Economic Development on Burden (Jan 2019)

The problem is that reactive governance is inconsistent with the mix of long-term policies required to promote broad economic participation and growth. For a competitiveness agenda to maintain and raise Canadians’ quality of life, it demands discipline, focus and a vision that extends beyond the election cycle. It thus requires a multi-partisan commitment. A change in government may naturally result in new preferences and priorities, but it should not cause us to lose collective sight of the common bases of competitiveness, productivity and jobs, and the greater opportunities and outcomes they produce for successive generations.

 


NCFA Jan 2018 resize - [Report] A New North Star:  Canadian Competitiveness in an Intangibles Economy The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Wharton University | Nov 12, 2019 Mark Zuckerberg and Bill Gates founded their pathbreaking companies when they were still in their teens. Steve Jobs founded Apple at 21. Their stories, which get a lot of media attention, have many believing that younger entrepreneurs are the most successful. However, research from Wharton management professor Daniel Kim shows they are exceptions to the rule, and that the average age of successful entrepreneurs is actually a lot older. The study, “Age and High-growth Entrepreneurship,” determined the most successful founders in the United States are in their 40s. Javier Miranda, principal economist at the U.S. Census Bureau; Benjamin Jones, professor at the Kellogg School of Management at Northwestern University; and Pierre Azoulay, professor at MIT’s Sloan School of Management and research associate at the National Bureau of Economic Research, co-authored the study. Kim sat down with Knowledge@Wharton to talk about why middle-aged entrepreneurs bring the benefit of experience to the founder’s table. (Listen to the podcast at the top of this page.) An edited transcript of the conversation follows. See:  Bringing Good Ideas to Life: 13 Modern Ways to Innovate Knowledge@Wharton: If “age ain’t nothing but a number,” as the Aaliyah song goes, why ...
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Cointelegraph | Justin O’Connell | Apr 9, 2019 The promise is great for so-called smart cities, which will deploy a network of interactive sensors to achieve efficiency and innovation. The smart city vision includes driverless cars, renewable energy to aid a city’s power consumption, energy-efficient buildings, and communications systems that work with the location’s infrastructure to avoid waste, among other features. A report by the International Data Corporation (IDC) indicates that spending on smart city technology is expected to grow to $135 billion by 2021. That may be changing. Google is creating a smart city in Toronto, and, with the vast resources of the technology giant, the first widespread implementation of the promises of smart cities may be at hand. But there are still concerns over certain aspects of implementing the smart cities program. Canadian Prime Minister Justin Trudeau appeared at the October 2017 kickoff for the smart city being designed by Google for Toronto. “We know the world is changing,” said Trudeau, as he stood alongside senior Google executive Eric Schmidt. “The choice we have is to either resist it and be frightened by it, or to say we can step up and shape it.” Are we being over-promised? One ...
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Reuters | Nov 20, 2019 HONG KONG (Reuters) - Singapore’s central bank plans to bring bitcoin and other similar cryptocurrency futures traded on approved exchanges under its regulation in response to interest from international institutional investors, it said on Wednesday. Market watchdogs worldwide have been debating whether and how they should regulate the cryptocurrency industry. Many have focused their attention initially on investor protection issues given concerns about market manipulation and cryptocurrencies’ volatility. See: Singapore Fintech Week: Data, technology and policy coordination – BIS Speech Singapore overtakes the US to become world’s most competitive country, WEF says In a consultation document, the Monetary Authority of Singapore (MAS) said that it had seen interest from institutional investors in trading “payment tokens” like bitcoin and ether, who “have a need for a regulated product to gain and hedge their exposure to the payment tokens.” The consultation will close on Dec. 20. MAS only proposes to regulate futures traded on exchanges it already regulates. It warned investors it did not regulate token derivatives not traded on approved exchanges. “The inclusion of these products in the approved exchanges will certainly provide new opportunities for all regulated exchanges. This may create liquidity for these products,” ...
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Crowdfund Insider | JD Alois | Nov 18, 2019 Periodically, Crowdfund Insider revisits the Reg CF sector of online capital formation. Reg CF or “Regulation Crowdfunding” may have garnered most of the attention from popular media but really there are three individual crowdfunding exemptions including Reg A+ and Reg D 506c. Under Reg A+ you must file an extensive offering circular with the entire offering process costing around $300,000, according to one estimate. But Reg A+ enables an issuer to raise up to $50 million from both accredited and non-accredited investors. Under Reg D 506c, you may raise an unlimited amount of money but only from accredited investors. This is the most popular crowdfunding exemption and Reg D (5o6c and 5o06b) is a trillion-dollar market. Issuers using Reg CF may only raise $1.07 million and must utilize a FINRA regulated Funding Portal or a broker-dealer. Due to the low cap on funding, frequently issuers will do a side-by-side Reg D 506c offering to circumvent the extremely low amount you may raise. Last time CI revisited the number of approved Funding Portals was in July. Since that time, several new funding portals have joined the approved list and several have exited ...
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US funding - [Report] A New North Star:  Canadian Competitiveness in an Intangibles Economy
Highline Beta | Nov 19 ,2019 With RBC as the lead private investor, Highline Beta’s inaugural fund forms part of the Government of Canada’s Venture Capital Catalyst Initiative. TORONTO, November 19, 2019 - Highline Beta, a leading new venture development and venture capital firm known for its unique corporate innovation model, today announced the first close of its inaugural investment fund, Highline Beta Fund 2019 (“The Fund”). This predominantly Pan-Canadian fund will make up to 30 investments in startups co-created or partnered alongside corporations, and is one of only seven funds selected by the Government of Canada’s Venture Capital Catalyst Initiative, with Royal Bank of Canada (RBC) as the lead private investor. Highline Beta believes it can improve upon the features of traditional startup accelerators and corporate-startup engagement programs to achieve more meaningful win-win relationships. Highline Beta has spent years collaborating with a roster of global corporations such as RBC, Anheuser Busch InBev, Aviva Canada and American Family on growth mandates beyond their core businesses to reimagine the industries we live in through startup innovation. See:  Why venture capital firms need more women partners and entrepreneurs “Almost four years ago, we pioneered a hybrid corporate venture studio and venture capital model ...
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highline beta closes first fund - [Report] A New North Star:  Canadian Competitiveness in an Intangibles Economy
OSC | Release | Nov 19, 2019 TORONTO, Nov. 19, 2019 /CNW/ - The Ontario Securities Commission (OSC) is moving forward with more than 100 specific actions to reduce burden for market participants doing business in Ontario's capital markets. As these changes are made, individuals and businesses regulated by the OSC can expect to see enhanced service levels, less duplication and a more tailored regulatory approach. "The OSC has made major progress in reducing the burden for Ontario's market participants," says the Honourable Rod Phillips, Ontario Minister of Finance. "I want to commend Chair Maureen Jensen and her entire team for moving in short order to streamline regulations without compromising investor protection." The changes will make it easier to start, fund and grow a business in Ontario, and make Ontario's markets more competitive. While these initiatives will benefit businesses of all sizes, the OSC has carefully considered opportunities to benefit small and medium-sized companies, which make up nearly 70 per cent of those regulated by the OSC, and smaller registrant firms, which make up nearly a third of Ontario registrants. NCFA Advocacy on Burden Reduction: March 1, 2019: NCFA Submission to the Ontario Securities Commission on Regulatory Burden NCFA Letter to ...
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OSC burden reduction Nov 2019 - [Report] A New North Star:  Canadian Competitiveness in an Intangibles Economy
Bitcoinist | Christina Comben | Nov 13, 2019 Top 10 Crypto Trends This Year As CoinShares states at the start of the report, “knowledge is best when shared.” In order for the crypto industry to grow, “participants and outside analysts have to be able to identify, gather, and analyze data to tell the story of why this industry matters.” So, here’s what’s going on right now. 1. Macro Trends Are Setting the Stage for Bitcoin The report starts out by taking a look at the background of how we got to where we are today. It seems that a whole host of macro trends are combining to create the perfect storm for Bitcoin. In 2019, there is a growing disparity between rich and poor. Warren Buffet, Bill Gates, and Jeff Bezos own more than the bottom half of Americans. At the same time, there is increased automation in the workplace, rising political tensions and unrest in countries like Iran, Venezuela, and Hong Kong, and increasing social backlash against capitalism and big tech companies. See:  Lock BTC, Get DAI: Lending Firm Bridges Bitcoin-DeFi Divide in Latin America This is accompanied by diminishing trust in banks and governments. More than 90% of people ...
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Coindesk |Nathan DiCamillo | Nov 18, 2019 The Takeaway The research arm of payment card giant Visa has published a paper describing the development of LucidiTEE, a blockchain system for orchestrating sensitive data among multiple parties. For example, the paper outlines a system that would allow banks and fintech applications to share data without relying on intermediary data aggregators. While Europe has relied on legislation like GDPR to set standards for securely sharing customer data, US banks had to develop agreements with data aggregators. Visa, the world’s largest card payment network, has been quietly developing a blockchain system that could upend how banks transfer customer transaction data to consumer financial applications like Mint and Credit Karma. In a paper published by Visa’s research and development arm, researchers describe a system called LucidiTEE. It outlines a system for sharing sensitive personal data on a blockchain, crunching that data within a trusted execution environment (TEE) and using history-based policies to ensure that each of the parties receive an output of the computation. (The system’s name is a combination of TEE and the word lucidity). See:  Visa Makes Its Second Investment Into a Crypto Startup The first application of LucidiTEE is sharing data ...
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Investment Executive | James Langton | November 7, 2019 Vancity Community Investment Bank to acquire CoPower investment platform Toronto-based Vancity Community Investment Bank (VCIB),  a subsidiary of Vancouver City Savings Credit Union, will bolster the bank’s impact investing capabilities by buying Montreal-based green investment platform CoPower Inc., VCIB announced Thursday. The transaction brings together a bank devoted to financing affordable housing with a platform that finances environmentally friendly projects through green bonds that are available to retail investors. Financial terms of the deal were not disclosed. VCIB says that the deal will enable it to expand its loan offerings to include clean energy and green building initiatives. At the same time, CoPower’s focus on creating impact investment products for retail investors will enable new funding sources for the bank. “Our mission has always been to move money for the clean energy transition. As a subsidiary of VCIB, we’ll be able to better serve the needs of clean energy developers while delivering a powerful range of investment products for investors looking to earn a strong return, and supporting projects that are green, inclusive and affordable,” said David Berliner, founder of CoPower, in a statement. See: Unlocking the Potential of Frontier Finance The deal, which has been approved ...
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Green Biz | Joel Makower | Nov 18, 2019 "Smart beta." It’s a term of art on Wall Street, a blend of active and passive investing strategies that typically combine an underlying stock index with an investment manager’s savvy about a potential stock’s liquidity, volatility, momentum and other factors. The strategy is said to provide a risk/return profile that is more attractive than a singularly active or passive investment product. That nerdy financial term will be among those increasingly relevant to corporate sustainability execs — CSOs, for short — as the astonishing rise of environmental, social and governance, or ESG, factors takes hold in the mainstream investing world. ESG assets under management have grown the fastest among smart beta strategies — a compound annual growth rate of more than 70 percent over the past five years, according to a recent report from Bank of America Merrill Lynch. "The opportunity is also too big to ignore," the report's authors wrote. "Bank of America estimates that over the next few decades, equity investments aligned with ESG criteria could attract assets equal to the size of the Standard & Poor’s 500 index today." The S&P 500 in October had a market capitalization of ...
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