When an industry rallies — what’s happening with the “blockchain supercluster” proposal in Canada?

Typically, when the private sector rallies over a matter of weeks to pledge close to $50 million to a cause, something significant going on — especially when it’s in Canada, a country often criticized for being more risk averse to core investments in innovation, let alone blockchain innovation.

So what happened?

On July 24, the Canadian government received over 50 proposals to build superclusters, large clusters of talent, technology, and infrastructure across high growth industries, far exceeding officials’ expectations.

What is the supercluster program?

As part of the most recent federal budget, Minister Navdeep Bains announced a $950 million investment to support a small number of superclusters over five years. Each supercluster must have financial support from large, medium, and small companies, academic institutions, and relevant non-profits. The program will match eligible contributions (cash funding) from the private sector dollar for dollar, thereby amplifying private sector investments and spurring innovation and growth. This initiative is part of the government’s mandate to direct investments for the public good, without picking the winners and losers.

Where did the idea for a blockchain supercluster originate?

Out of necessity. Running a business is complicated. As with Internet startups 25 year ago, blockchain leaders have a set of core business activities specific to this new technology and their position within the space:

• Building the technology that differentiates one company from the next, be it platform, a decentralized application (“dapp”), a development shop, or a technical consultancy
• Marketing products and services to a target audience
• Hiring experienced blockchain staff
• Training non-blockchain staff on the requisite blockchain skills
• Meeting with investors
• Working with lawyers (and deciding whether to take their advice)
• Investing in core technology research and development

Most leaders end up playing many roles and participating in the following important but peripheral activities, all of which benefit the industry enormously but indirectly benefit their individual organizations:

• Leading or participating in relevant thought leadership communities, whether conducting research or socializing new ideas in media and the press
• Educating the broader market and hosting blockchain-101 style sessions, conferences, and meetups
• Identifying and getting in front of future customers who know nothing about blockchain and less about a company’s product or service
• Getting in front of potential hires by participating in university conferences or wherever established talent hangs out
• Engaging with regulators and providing them with background so that they can approach this new industry with open minds and make well-balanced decisions
• Educating investors, many of whom have heard of this technology and are meeting with countless companies but have no intent to invest
• Educating lawyers about the blockchain business, their particular niche, and the broader blockchain industry such that general counsel can provide better guidance on how existing rules and frameworks could apply to blockchain
• Supporting consortia and open source projects that complement their core business but are impractical for their organization to do

This led to the idea — why not create a separate vehicle for doing all these activities on behalf of the industry?

It was a logical choice to align with the leading Canadian organizations to put together a comprehensive strategy for blockchain in Canada. ColliderX, alongside ICTC, Blockchain Research Institute, Blockchain Association of Canada, and Blockchain Canada led this worthy cause .

Based on our collective experiences, we started to map out what an end-to-end blockchain strategy for Canada, coast-to-coast, could entail. ICTC then started the process of writing a submission to the government and gathering letters of commitment and letters of support from the entire industry.

Who supported this initiative?

We received overwhelming support from the private sector, raising millions of dollars of pledged funding, and broad support from academic institutions.

We approached the challenge in a manner consistent with the ethos of the blockchain industry.

• We built a website, www.blockchainsc.ca (kudos to Kyle Kemper from the Blockchain Association of Canada for pulling this website together in record time!) We’re still collecting additional letters of support.
• We garnered close to 600,000 impressions (number of views and interactions with social media content) with videos from key players
• We received well over 50 letters of support from Canadian organizations and global ones impressed by this type of innovation initiative

Jeremy Depow, vice president of policy and research at ICTC, was a key member of the group that worked tirelessly to pull this bid together. He summarized the results:

“In a few short weeks we raised approximately $16 million of private-sector cash contributions and $19 million in in-kind contributions. We raised the overall private sector expectations to 28 million, for one-to-one matching of 28 million in federal funding for a total of 56 million over five years. Including this 56 million, plus other financial commitments (that are not applicable to matching), plus in-kind contributions; the total budget came to $81 million. There were well over 50 letters that came in.”

And all of this was assembled in less than 6 weeks from the original conversation between Namir Anani, President of ICTC, Marc Lijour, lead of open source & technology affairs at ColliderX, and myself. We started with a discussion about ColliderX and what government programs could potentially be complementary to our neutral, non purely corporate or purely academic approach to core tech blockchain research, and that evolved into the broader conversation that brings us to today about the blockchain supercluster.

In so far as government proposals go, the blockchain community was probably the last group to put forward a proposal and still had very impressive results — a testament to the fact that the blockchain industry is becoming harder to ignore.

The global blockchain market is growing at a staggering CAGR (Compound Annual Growth Rate) of 58.7%, and ICTC estimates that Canada’s blockchain market will reach $2.5 billion by 2024, create around 107,000 well paying jobs (technical and related employment). To say that the blockchain industry has tremendous economic development potential is an understatement.

The media have also given prominent coverage of the traction in blockchain media outlets, political media, and even a live radio interview on the AM 570 show hosted by Mike Farwell that I had an opportunity to do this week.

In a few weeks, the short list of supercluster applications will move into round two of the selection process.

The waiting game is on, sure, to an extent. But we have a plan to move forward regardless.

Why must Canada remain a leader in the blockchain space?

We have more than enough industry momentum to move forward with the creation and execution of a Canada-wide blockchain strategy: We have five large, healthy banks all looking into this technology at length. We have great computer science programs in universities across the country. We have startups doing amazing work to revitalize everything from the $562 billion remittance market to deep enterprise blockchain development to solving interoperability among blockchains. Forbes named Canadian inventor Vitalik Buterin, founder of Ethereum, one of its Top 40 under 40. Government backing would go a long way in amplifying the private sector investment and solidifying Canada’s position as a country open to foreign blockchain innovators and companies. As the Tapscotts wrote in a March 2017 paper, “The Blockchain Corridor,” the time for tinkering is over. We need to strengthen Canada’s competitive advantage, and large investment in blockchain tech is a bold, safe bet.

What are the overarching goals of the blockchain supercluster?

The supercluster initiative promotes progress along five key dimensions:

Technology leadership. Collaborative projects that directly enhance the productivity, performance, and competitiveness of organizations, for example, collaborative R&D projects, demonstrations, prototype development projects with benefits for multiple firms, and private-sector-led commercialization projects.

Partnerships for scale. Activities enabling the growth of companies such as linking start-ups with strategic partners, offering business mentoring, consulting and coaching, and partnering with organizations that provide access to capital and financing

Diverse and skilled talent pools. Initiatives addressing industry needs for talent, such as repatriation of Canadian talent; development of curricula; and re-training programs for existing workforce or building awareness of industry demand for skilled talent across stakeholder groups (e.g., students, workers, firms, universities and vocational colleges, policymakers)

Access to innovation. Investing in and providing access to assets, services or resources that benefit a range of companies such as support for access to specialized technical services, access to dedicated laboratories or the acquisition of cutting-edge equipment.

Global advantage. Activities and initiatives that position the supercluster and its strengths as a world-leading organization and that enable firms to seize market opportunities and attract international investments and partnerships.

We designed the blockchain supercluster strategy to address these important areas.

There are three critical reasons.

Cross-industry applicability. Like the first generation of the Internet before it, the second generation based on blockchain will transform every industry, enabling Canada to make the shift to a true innovation economy. Blockchain is a cross-industry enabler and a key catalyst for industry innovation and growth, particularly for small and medium-sized enterprises that represent the large majority of Canada’s industrial output.

Cross-technology applicability. Blockchain is the heart of the Fourth Industrial Revolution. It is the foundational transaction platform for initiatives in artificial intelligence, machine learning, robotics, the Internet of Things, and autonomous vehicles.

Inherently global nature: Blockchain is a technology without borders, a pivotal trade enabler for fast-tracking Canada’s place in the global economy. Blockchain technology aligns with Canada’s strategic priorities as well, such as the newly ratified Canada-European Union Comprehensive Economic and Trade Agreements, a market of more than 500 million people with an $18-trillion economy (more on that in another post).

So, to all of our supporters thus far in putting together the blockchain supercluster, thank you.

We welcome comments from the community about steps forward. We also commit to keeping the community updated over the coming weeks and months as we begin to execute a Canada-wide blockchain strategy.

This was originally published on Don Tapscott’s Linkedin platform.