By: Reza Moridi, Minister of Research, Innovation and Science, Government of Ontario
Innovation is a critical means by which countries can create and sustain a competitive advantage and drive inclusive growth. Innovation has been central to the economic development of countries such as the United States, Germany and Japan. Recently, India has ranked 66 thin the Global Innovation Rankings, moving up 15 positions from previous year. In fact, among middle-income economies, India is just placed behind China. This transformation in the Indian ecosystem is backed largely due to introduction of the Digital India and Startup India Missions by the current government. With these, an atmosphere of research and development (R&D) and innovation for solving India’s social challenges is being encouraged.
Digital India looks at fostering successful public-private partnerships for creating local, sustainable innovation ecosystem, while the latter is an action-plan for boosting entrepreneurship and innovation and simplifying compliance. To make innovation accessible and thorough, the Indian government is working with the private player ecosystem to reach out to not just entrepreneurs but also to students across age groups and states. For instance, NITI Aayog, under the Atal Innovation Mission, is setting up 500 Atal Tinkering Laboratories that will provide access to hands-on experience to the startups. With great impetus to the sector at large, India is also looking at other countries for grounds of mutually beneficial synergies and knowledge-sharing.
Ontario: an innovation hub
Ontario, the largest province in Canada by population, has a vibrant, dynamic economy with a strong culture of innovation. Ontario offers R&D tax incentives which are among the most generous in the world and has a business friendly regulatory environment, considered among the best in the G7.
Ontario is building on its support for Ontario’s young innovators and aspiring entrepreneurs by extending funding for successful innovation-focused programs. The Ontario government provides grants, loans and support for start-ups run by young entrepreneurs with mentorship, training and resources, and funding up to $250,000. Up to $1 million is provided in grants and support services through Investing in Business Innovation (IBI) funding for fast-growing technology companies operating in southern Ontario, while $500,000 is offered in funding and support through the MaRS Investment Accelerator Fund (AIF) for Ontario businesses in the clean tech, ICT, and life sciences and healthcare sectors.
Incubation support for startups
World-leading companies have invested billions to start or expand their operations in Ontario. The Government of Ontario has taken up this unique initiative of partnering with a University to promote an environment of innovation and showcase the various facets of a thriving business environment.
To provide a fillip to the startup and entrepreneur community, the Government of Ontario has been hosting The Next Big Idea contest with Zone Startups India for past several years. Winners of the contest get a two-week market incubation at North American business incubator – Ryerson University’s DMZ, that provides startups with low-cost, easy-to-use infrastructure needed to scale and grow any size business. The competition seeks to discover India’s 5 most innovative technology companies who are looking to leverage a presence in Ontario, Canada, as a vehicle to expand to North America.
Past winners include Citrus Pay, a leading m-payments solutions company that has successfully raised $7.8 million. This year’s winners include Uncanny Vision, Heckyl Technologies, Data Resolve Technologies, Algo Engines, Senseforth Technologies and Cloudrino. Till date, winners across the 2 editions, have raised in excess of $12 Million.
Conducive business environment
Businesses investing in Ontario can take advantage of easy access to the broader North American Free Trade Agreement (NAFTA) region, which means ready access to the U.S. market and global business networks. With a total combined provincial (11.5%) and federal (15%) Corporate Income Tax (CIT) rate of 25.6%, Ontario’s combined general federal-provincial CIT rate is lower than the average of G20 countries, and is lower than the average federal-state CIT rate in the U.S.
Ontario is also an efficient North American hub for international investment and trade and offers direct access to the US$19 trillion North American market; a multicultural workforce; a great quality of life and more.
Ontario also has the ingredients needed to conduct research and develop new products and services. Almost half of Canada’s full-time R&D personnel are within the province, where more than $14 billion annually is spent on R&D. According to the 2014 KPMG Competitive Alternatives Report, Ontario offers the greatest cost advantage for research and development in the G7, citing a cost advantage of 23.9% relative to the U.S. advantage average.
Ontario can provide startups and entrepreneurs with mentorship, business development advice, access to investors, industry connections and valuable international experience.