Government Involvement Required to Propel Canada's Tech Industry

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 3, 2016) - Last month, Scotiabank's CEO argued that the future of Canadian innovation relies primarily on the private sector to close the productivity gap between Canada and its international counterparts.

However, when it comes to FinTech and other budding technologies, there is much that must be done at the government level - from education and training, retention, regulation, and funding - to help accelerate growth needed to sustain the industry.

"Technology is one of the strongest economic drivers in the country today," says Rod Hsu, president of nTrust. "The federal and provincial government have made leaps and bounds in recent years in terms of helping the industry flourish, but sustained involvement is necessary. We need to approach the industry with the same eagerness we do others like the natural resource sector."

Education and Training

It's no secret a talent and skills gap exists between the Canadian workforce and the needs of tech employers. In fact, only 6 percent of the 527,000 students who completed a program in Canada in 2015 graduated from the IT field. Additionally, a recent report by the Information and Communications Technology Council called for reform of the country's economic policies to address the gap - suggesting computer science programs be integrated into education from kindergarten onward. More attention must be placed by the government on fostering interest in and access to the field across all groups in order to mitigate the shortage.

Retaining Tech Talent

While the majority of tech firms can now compete with the best of Silicon Valley in terms of employee perks and benefits, the larger retention issue plaguing Canada is the lack of affordable housing in major metro centres like Vancouver and Toronto, which is slowly eating away at disposable income. As a result, businesses are having trouble attracting and retaining qualified candidates to the point where is has become an economic issue. Many in the industry have called for municipal, provincial and federal involvement to search for solutions to solve the housing crises in these markets.

Innovation/Incubation Hubs

Government can also play a role in facilitating FinTech acceleration by creating a stronger middle bridge between tech companies and financial institutions and/or larger organizations in the space. Already, Canada has several of these incubators - MaRS, DMZ, BCTIA - however when compared to other parts of the world, such as the UK, we are lagging behind. In addition to connecting FinTechs to resources and support and helping to broker valuable partnerships, these hubs provide a forum for experimentation and launch within a controlled boundary.

Regulation

Despite rapid growth in the industry, uncertainty around the adaptability of the regulatory environment poses a potential risk for FinTechs across the country. Without a clear plan, FinTechs end up getting stifled in innovation with regulatory rules set for the incumbent financial system. However, regulation in the space should not be one size fits all - rather the flexibility of a tiered approach, that differs based on multiple factors such as the size of the business, would help drive further innovation rather than repress start-ups. Adaptable regulation at the government level would assist in making FinTech a viable option for users, create space for innovation, while building the critical mass needed for the industry to thrive.

Funding

Recent funding announcements by the BC government, who launched a $100 million venture capital fund for tech startups earlier this year, are a huge step forward, however, there is some skepticism around whether this will sustain the growth required in the sector considering the over 9,000 tech companies currently in the province.

The future of the industry cannot be left to one group alone, rather it is collaboration between FinTechs, the private sector and levels of government that will lead to success and longevity in the industry.

About nTrust

nTrust is a rapidly growing online and mobile money transfer platform that helps people around the world instantly move and access their money. Using nTrust, members can send money to friends, cash out to their bank account, spend money through their phone, or load funds to a prepaid card to use anywhere the MasterCard® Acceptance Mark is displayed, online or in-person. nTrust's proprietary technology uses the highest encryption standards and is "PCI-DSS Level 1" certified, which remains the top global standard for operational and technical security designed by Visa, MasterCard®, and American Express.