This emphasis comes after another 2018 EY survey found a 300% annual increase in the number of Canadian executives looking to sell, with 41% saying the need to fund new technology investments triggered a recent major divestment.7
As further evidence of how technology is calling the tune in business, industry convergence — which has tech as its launch pad— is the most disruptive megatrend for 33% of the Canadian middle market, higher than the rest of the world (23%), with digitization itself being the most impactful for a further 14%. EY’s Tellier says: “Digitization is proving particularly disruptive in consumer-focused industries such as technology, retail, financial services and consumer products. They are facing immense disruption as they are closely linked to consumer behavior which is changing significantly,” he points out.
Canadian fintech company Overbond is one of the companies causing — and benefiting from — such disruption. CEO Vuk Magdelinic says, “A lot of the disruptive forces that many might see as a threat, such as digitization, globalization, and the cost and availability of capital, are precisely the trends that give us our edge. We are a disruptor and we are leveraging those trends with our technology to show there is a better way of doing things.”
The middle market recognizes that technology offers opportunities as well as threats. Technology is seen as the most important factor in improving productivity (27%) and, after skilled talent, as the next-best means to accelerate growth. No Canadian respondents see reducing staff costs as the primary objective of major tech investment.
Made-in-Canada Silicon Valleys
Artificial intelligence (AI) is under a particular spotlight, with 42% planning adoption in the next two years (68%, elsewhere) and 44% more in the coming five. This comes as the federal government is investing more than CAD$750 million in five high tech “superclusters” of innovative businesses — what it calls “made-in-Canada Silicon Valleys” — including two focused on AI and digital technology.8