The Next Wave of Innovation in Canada
The accelerated pace of innovation is transforming companies across sectors and generating new opportunities for Canadian business.

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Get the PDF of our Next Wave of Innovation in Canada report, with Torys commentary on sectors and areas to watch, as well as practical takeaways for business leaders looking for opportunities to grow and evolve through innovative business models, governance and dealmaking.

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Executive Summary

With significant momentum in the wake of worldwide disruption, our growing innovation economy is offering Canadian companies and investors new ideas and opportunities. In this report we explore how innovation is transforming sectors and raising new transactional and risk considerations for market participants looking at these areas of growth.

Pandemic as Accelerator

The systemic disruption of the pandemic “shook the trees” of international innovation as businesses, researchers and policymakers pivoted to address resource, technology, health care, supply chain and socioeconomic crises. The variety and scale of these challenges have served to accelerate innovation, with some saying to the effect of five years’ worth of innovation at a pre-pandemic cadence. Canada’s response to the COVID-19 pandemic was a reflection of rapid development of new technologies and other innovations that were already occurring in business and government.

The federal and provincial governments have been strategically supporting this momentum in Canadian innovation through a range of programs, funding resources and tax incentives. Among such programs is the federal government’s Innovation Superclusters initiative which will, in the next two years, infuse investment into five superclusters earmarked as areas of global competitive advantage—digital technology, protein industries, advanced manufacturing, scale AI, and ocean—to drive innovation, advance research and attract top talent.

Areas to Watch

The technology sector in Canada has been on a years-long spike in growth, responsible for 27% of the increase to the national GDP over the last five years. The industry is generating a wide range of advances—biotech, AI, and quantum technologies are a few examples—that are finding applications in everything from M&A transactions to healthcare patient data management. Another high-growth area is the life sciences, spurred by the pandemic, which is commercializing groundbreaking innovations and working with agricultural and biotech companies on cutting-edge agribusiness projects, including, for example, advances in plant-based proteins and medicinal properties of food.

As the tech sector expands, its outputs and results are finding more and more practical application in the innovation strategies of other sectors in Canada, including established sectors. The financial services industry continues to transform through the integration of fintech solutions into their operations and long-term strategies. Another example is “smart” integrations becoming points of competitive distinction across sectors like real estate and advanced manufacturing.

Beyond technology-driven advances, Canadian companies are also applying innovative ideas to matters of corporate governance, operations and processes. For example, as the ESG mandate rises across virtually all sectors, Canada’s oil sands are global leaders in ESG innovation in the energy sector. Infrastructure—a key area slated for government investment in Canada’s recovery from the pandemic—is adapting project and financing models for infrastructure projects and transactions. And as the COVID-19 crisis is shifting sentiments around globalization and domestic production, governments in Canada are recalibrating their approach to procurement and supply chain management.

As the sustained focus on innovation by business and government continues to yield new opportunities in Canada, business leaders will want to be agile in response to the natural ripple effects of innovation, considering new strategies and areas for risk mitigation in response to rapid change.

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