Speaker 1 [00:00:01] Hi, it’s John here. I’ve been studying and writing about Canadian business for a few decades now, and if there are half a dozen expressions that would capture that span of time, I got to think hollowing out would be one of them. Sure. We’ve seen the rise of some great Canadian companies. I’m thinking of Lululemon, Shopify, Cirque du Soleil. Over the decades. But we’ve also seen some other great names, Alcan and Nortel slide away because they didn’t have global scale. We’ve seen this in fairly blunt terms in the pandemic, too. When you think of the shortages of the last year, whether it’s PPE or foodstuffs or even toilet paper, it was often a function of global supply chains built for scale, built for efficiency, but not built for the kind of resilience that we need in more disruptive times like we’ve seen in a pandemic. We don’t have enough global champions rooted here in Canada. And as we move past this pandemic, we’re going to need to rethink our approaches to what used to be called industrial strategy for a post-industrial age when we’re going to need a lot more Canadian champions in a lot more of these emerging sectors that are going to shape our lives in the decades to come.

This is Disruptors, an RBC podcast, I’m your host, John Stackhouse. For all our supply chain challenges, one of the sectors set to emerge as a post pandemic winner is Canada’s talent rich biotech industry. Canada has had a world leading reputation in biotech for almost a century. It goes back to that famous discovery that we all studied in school of insulin at the University of Toronto lab in nineteen twenty two. And just last year, a Vancouver startup AbCellera Biologics developed what is now the leading antibody treatment for covid-19. COVID crystallized the vital importance of Canadian biotech, an industry that has the potential to develop the tools, treatments and vaccines to make the next time more manageable and less deadly. By early twenty twenty one, Canada’s 10 largest biotech companies and of Celera is tops among them, had a combined market cap approaching 30 billion dollars. The origin of AbCellera, just like Banting and Best’s treatment for diabetes, can be traced to a university lab. In AbCellera’s case, at the University of British Columbia. Back then, in twenty twelve, there were only six employees, one of whom is my guest today – AbCellera’s founder and CEO Dr. Carl Hansen. Carl, welcome to Disruptors.

Speaker 2 [00:02:57] Thanks, John. Good to be here.

Speaker 1 [00:02:59] Carl, you’ve been researching and working in the biotech sector for almost two decades, but I wonder if you could step back and describe with that benefit of hindsight, the state of the industry right now.

Speaker 2 [00:03:11] It’s something I think about a lot, in fact. And if you’re outside of this space, you may not appreciate what a tremendous trajectory the industry is on right now. You know, one of the things that comes to mind is I started in this field originally in engineering and then as a grad student, Caltech, and it was my second year at Caltech that to big fanfare, they announced the first draft of the human genome. So that was in two thousand, about 20 years ago. That’s a blink of the eye in the course of technology development. And since that time project that took about three billion dollars in 10 years to do, technology has moved so that we could do that hundreds of times in a week in a single lab. So the underlying foundational technologies for searching, for understanding biological systems have only just come of age. And what we’re seeing is a watershed moment across the entire industry. You’re seeing that in a big influx of capital and innovation that is now finally reaching patients with new therapies. I believe that we are only at the very beginning of this. You ask yourself, how much do we understand about biological systems? It is very, very little. And I really think over the next 30, 40 years, you’re going to see tremendous advances in our ability to understand and ultimately to treat patients.

Speaker 1 [00:04:27] It’s remarkable the way you frame it, that it took us the span of human history until 2002 to map the human genome. And then in just 20 years, we figured out how to do that in almost the snap of a finger. And what are we going to be able to do in the next 20 years?

Speaker 2 [00:04:44] Absolutely. If you made the analogy to the semiconductor industry, this would be like the nineteen fifties. Like we have the first transistors and people are getting excited about removing vacuum tubes. No one is yet understanding that we’re going to have supercomputers in our pockets. And biotechnology I think is on that trajectory. I’m not aware of any field or any discipline where the rate of data acquisition has gone up nearly as quickly as it has in biotechnology over the last 10 years, merely a factor of a million in the course of a decade, which is unprecedented.

Speaker 1 [00:05:14] What if the last 16 months taught you many things?

Speaker 2 [00:05:17] I mean, the last 16 months, obviously, the whole world got taught a few lessons about the importance of having a robust sector and what investments in technology can do when things hang in the balance for us. We had spent the last nearly decade in developing technologies to better search and analyze and explore natural immune systems to find antibodies, which are these naturally occurring molecules that our immune systems make, and then use those either to treat or prevent disease. So we’ve been doing that with a heavy emphasis on technology, trying to solve the hardest problems in drug development. And during the pandemic, we had the opportunity to step into the breach and apply that technology to in record time and find a therapeutic antibody to help treat patients. For me, what that really underscored was that what we had been pursuing for 10 years, this concept of heavy investments in technology, this concept of collaboration with other groups, was the winning formula in what was probably the most competitive antibody discovery effort that’s ever happened and an opportunity to prove the technology, to prove the team and really make it Celera, a household name across biotech. I mean,

Speaker 1 [00:06:25] it’s remarkable what you but so many other biotech companies have done in these these 16 months, and we’re still in the midst of it. What surprised you most about your own abilities to innovate over those? Over those?

Speaker 2 [00:06:38] Months, I’m not sure that we were surprised, I mean, we had been working on this problem for a long time, in fact, two years before the pandemic occurred, we had even had a program that was funded with an agency in the US, the Department of Defense, that was specifically trying to solve this problem of rapid pandemic response. So we had done the work. We knew we were ready. We believe that we would be able to come up with solutions faster than anyone else in the world. Maybe what surprised me was the massive impact that that could have in such a short time. It normally takes you 10 years. We work in an industry where it takes a decade to go from an idea through to an approved drug. In the course of the pandemic, we were able to solve the front end of that very quickly and then collaborate with Eli Lilly in the United States and also collaborate with government agencies, including the NIH and, of course, working closely with the regulatory agencies. And we’re able to shrink that timeline. Usually a decade before an approval, down to less than a year before this antibody had been through clinical trials, had been granted emergency use authorization, and as of today has been used in nearly half a million people in the US alone. We believe it saved tens of thousands of lives and tens of thousands of operations. So as a company, when you’re pursuing that mission all the time of finding drugs for patients and you expect it to be out in the future, to have that that whole experience compressed into 12 months is a tremendously satisfying and rewarding experience and one that really brought the team together and I think made everyone really, truly believe in what we’re doing in the long run, which is trying to do this again for other therapies.

Speaker 1 [00:08:17] And maybe I should stop you there and ask you to explain for our listeners who might not be biotech experts, what AbCellera does and how that differentiates from many other products, including vaccines that they may be familiar with.

Speaker 2 [00:08:34] So first off, AbCellera is a technology company. I often make a point of saying that we’re a technology company and not a biotech company. I make that distinction because most biotechnology companies are focused on bringing their own therapeutic products through the clinic and ultimately to approval. We set up a company very differently. We set up the company to assemble the best in class technologies, modern technologies from genomics, from competition, from cell biology, from engineering to make it much easier and faster at the front end of discovery to going from that scientific insight or that concept of what a therapeutic should be to the actual molecule that can be moved forward. Now, the way we do that is that we look through natural antibody responses, either in humans as in the case of covid-19 or in animals, and we sift through millions of different antibodies to find those that have those perfect qualities that make them able to neutralize the virus and also easy to manufacture and distribute as a drug out in the world. So that’s what we’ve been focused on. And the product that we were able to help develop during the pandemic is an antibody therapy that essentially can be given to patients and acts like synthetic immunity to stop the virus in its tracks, to keep people from getting sick, to keep them out of hospital and to keep them from dying.

Speaker 1 [00:09:56] You talked a bit about the pace of innovation through the pandemic, referencing largely US institutions and partners. But I wonder if you can give us a sense of Canada’s preparedness. We’ve seen a lot of restructuring of sectors, including biotech, over the decades, in some ways made us more competitive in other ways, made us perhaps less resilient. What’s your take on Canada’s position in terms of especially the biotech sector and our global positioning right now?

Speaker 2 [00:10:27] I don’t think that anyone would try to make the case that Canada was well-prepared for the covid-19 pandemic. And perhaps that’s not a terrible indictment because that was true broadly across the world. One of the things I would say is that if you look at the solutions that have been brought forward, the vaccine development, the therapeutics, the contact tracing, these have come from countries that have a very well-developed technology and biotechnology sector. And in many cases, those solutions, particularly things like the Moderna vaccine, the Pfizer vaccine, you can map their origins back to investments that were made in the US by the government, focused on finding new therapeutic modalities to treat cancer or even to treat vaccines. So Canada, unfortunately, over the past several years, I think I’d characterize as a nascent biotech sector what has happened over the past few months or year, I think has shown everyone the importance, not just for the economy, not just for creating jobs, not just for helping to do your part as a country in innovation, but also for national security and having your own supply chain and your own capabilities take care of your citizens. We could improve substantially some of the policies that. We have to make Canada more competitive for attracting investment for four growing businesses, also to make it more business friendly for sectors, particularly biotech, which are heavily regulated. And in many cases, Canada is actually a harder place to do business than in the US. And so with the stroke of a pen, with some good policy decisions, I think we can make a very big impact that would help to get more investment, bring more people into Canada doing biotech and probably most importantly, to make sure that companies that we have like AbCellera, can scale quickly and are incentivized to make sure that Canada remains their home base.

Speaker 1 [00:12:17] Carl, I want to go back to a point you just made about Canada being a harder country to do business in, one of the challenges for companies like yours is getting on the so-called lists of treatments. Not that that’s easy in the US, but what are some of the obstacles you face in terms of getting that kind of access in your home country versus the country next door?

Speaker 2 [00:12:40] There’s been a lot said about that, and I probably don’t want to go too far into all of the nuances of getting drugs approved and sold in Canada, in large part because that’s normally not an area that our company plays in and not one that we have a lot of attention to until recently. So if AbCellera typically would work on the front end of discovery and then we would work with partners like Eli Lilly to go through clinical development and ultimately through the commercial, one of the things that that I would highlight is that Canada has very little activity in terms of clinical trials. There are some differences between the requirements for starting clinical trials in Canada and the US. And those differences, at least in the covid-19 situation, have made it difficult to launch clinical trials in Canada. So there is, I think, a very strong case to be made to harmonize our way of evaluating drugs and launching clinical development with the US, since they are a much bigger player in this space and the proximity to Canada would make it a natural extension for those efforts. It’s worth highlighting what an opportunity that might be for Canada. So first of all, developing a drug all the way through from an idea to approval is something that requires investments in the hundreds of millions of dollars. So those investments go to the hospitals, the doctors, the data collection. And by making ourselves an attractive place to do clinical development, we would create a new industry that is new dollars coming into Canada and building up that research capability, which is so critical for the biotech sector. The other thing to point out is that there are diseases out there, unfortunately, for which we don’t have good drugs. And if you’re in Canada, it’s unlikely you’re going to be able to access those trials to get the early access to treatments that could really make a difference. To the extent we can make Canada a destination for clinical development, it would unlock value or drive investment to the country. It would bolster the environments and the expertize for clinical development of biotech. And it would be a win for patients who would be able to access those therapies more quickly.

Speaker 1 [00:14:44] I wonder, Carl, if you can shed a bit more light on your own strategic thinking for AbCellera, you’ve made a strategic decision to partner with leading drug makers. You’ve mentioned Eli Lilly and not be the drug maker itself. Maybe shed a bit of light on your thinking there and how you see things going forward.

Speaker 2 [00:15:01] We started the company back in 2012 and started it based on investments in technology development that I had been working on for about a decade at UBC and almost 20 years in my career. When we launched the company, it was really on on two main insights into the industry. And the first was that because the industry had been so focused on developing therapeutics, very little attention had been spent on refreshing and updating and improving the technologies that are the foundation for those early discoveries that lead to therapeutics. And when we really start to dig into that, we realized that most of drug development is still being done on technologies that were invented in the 70s and the 80s. And since that time, the entire world has changed. We have artificial intelligence. We have modern molecular biology, we have genetic engineering, and that is laid the opportunity or created the opportunity to reinvent that process.

Speaker 1 [00:15:58] Can I just stop you there for a second? That’s extraordinary that you’re working on tech platforms essentially from the 1970s, given the billions or over the span of time, trillions of dollars that go into the industry. Why was it so slow to evolve?

Speaker 2 [00:16:13] Of course, why? Questions are always difficult to compete in. The way I believe it has happened is in the early days, there were these technologies that were sufficient to solve the problems of the day and antibodies 30 years ago. This was not even a therapeutic type. And so people were skeptical that it would work. The early pioneers in that space had to solve a lot of problems and they worked with the technologies of the day. Once they did and it worked, they started to build infrastructure. They started to build processes and teams and ways of working that push that technology ever further. And that represented an ingrained way of doing the process and also a big sunk cost. Now, those companies, their business is to create drugs and bring them to the clinic. Their business is not to do technology development. And so at any point in time, if you looked at the current state of the technology, you would say, well, yes, maybe we could do it better, but we don’t have the teams and expertize and it would take a really long time to replace everything that we’ve done. And so there’s never a strong incentive to do it. Whereas a new company, a startup company, always has this advantage. In any industry, you do not have any such cost. You have a white page. And if you’re looking ahead, creating that vision for what a modern version of this would look like, you have the opportunity to build that right at the frontier of what’s possible. So that is the advantage of new companies all the time. It’s probably the reason that you often see small companies in the tax base, in the biotech space that reinvent processes that for many reasons should be done by the big companies. They have the people, they have the expertise, they have the capital. We set out to do that and build the company and the entire business strategy on this philosophy that long term investments in technology will fundamentally move the needle in how we develop drugs. They’ll open up new opportunities. They’ll make it faster, they’ll make it cheaper. And when we decided to do that, we made another decision that was quite orthogonal to what everyone thought was good business practice. We decided not to become a drug company, and instead we were going to build the platform or as we like to call it, the operating system and allow the entire industry to access that through partnerships. So we’ve worked now on well over one hundred programs or therapeutic development programs. We’ve worked with some of the biggest, most enabling companies in the industry right down to small startups. And the way in which we operate is they have a problem. They come to us, we work collaboratively. We bring their problem in-house. We apply our technology and we send them back the data and the sequence or the instructions for making the molecules that can then become drugs. And when those actually become drugs, we participate in the success by having a royalty on the final sales.

Speaker 1 [00:18:58] As you speak that way, Carl, we don’t always hear that kind of entrepreneurial hutzpah from scientists. You did a PhD in applied physics and biotech, as you mentioned from Caltech before, accepting a teaching position at UBC in two thousand and five. I think you’re still an adjunct professor at UBC. And I’m curious how you marry those two skills of science and entrepreneurship and whether they’re complementary or competing.

Speaker 2 [00:19:26] That’s a good question. I’ve been a scientist for many years, but I think I would more characterize what I have done as technology development. So I started my life in physics and engineering, realized after undergrad that I wanted to get myself into biotech and then began working back in two thousand. On developing technologies for biomedical research, one of the things that I learned very early on that path was that it is extremely powerful to have a healthy irreverence or credentialed expertize. So you must be willing to step outside of your comfort zone to attack problems wherever they may take you and be willing to be the novice and understand that you’re going to learn quickly. That’s an idea that I took back to UBC and we had grad students that had trained, let’s say in biology, we’re doing programing. We had programmers that were doing biology experiments. So when it got time to launch the company, the idea that we could then step into something we hadn’t done before, business or business development or H.R. or all these other things, that was not intimidating. If you’ve been a physicist that transitioned into genomics, making the transition into finance or something else, that’s just another thing that you need to learn. So I actually think in many ways that was good training for entrepreneurship. The other thing I’ll say about entrepreneurship is what it really is about is about being able to see the world with fresh eyes and to try to find the opportunities that everyone has missed for some reason. There’s a lot of work at the universities and locally in trying to somehow make a formula for creating companies and even to define what entrepreneurship is. In my view, no such thing exists. It’s really just about independent thinking and then being willing to commit to the path even when it’s hard, because the hard things are the ones that are ultimately going to be of value. That is something that I’ve been trying to communicate back to, would be entrepreneurs at UBC that you can’t create a company by consensus. You’ve got to actually have an idea. It starts with individual thought and then bring the right people around the table to make that a reality.

Speaker 1 [00:21:29] You can’t create a company by consensus. Those are words we can come back to. We’re going to take a quick break. But coming up, more of our conversation with Dr Carl Hansen of AbCellera on the future of biotech in Canada.

You’re listening to Disruptors, an RBC podcast. I’m your host, John Stackhouse. Key to the success of any entrepreneur is a keen sense of creativity. And in case you missed it, Disruptors recently dropped a special two part series on the subject with guests from iconic Canadian brands like Lululemon and Shopify, plus Richard Florida, the urban studies guru behind the book “The Rise of the Creative Class.” Find it wherever you get your podcasts.

Welcome back. My guest today is Dr. Carl Hansen, the founder and CEO of AbCellera Biologics. I’m still intrigued with the idea of the new comer advantage and what newer firms can do that incumbents may not be positioned to. And often we see recapitalizations of sectors that that enable that. And in some ways, I wonder if we’re seeing that in biotech, if not a recapitalizations, certainly in a lot of new capital coming in, that should be allowing a lot of amplification as well as disruption. What do you think all that is going to lead to in terms of what the biotech sector can do, especially from the Canadian perspective in the 2020?

Speaker 2 [00:23:04] Well, obviously, the influx of capital, which is happening south of the border and also in Canada, is a huge tailwind for biotech. This is a sector that is very difficult to succeed in, and I mentioned it before, but the typical timeline from initiating a program, having a drug approved is somewhere north of a decade. If you factor in a failure, probably a couple of billion dollars on average per approved drug and certainly hundreds of millions for a program that is successful. So it’s an industry that requires investment. It requires long term investment in patient capital to ultimately create value, which only happens when we finally get therapeutics to patients. So all of that is very positive. Canada in particular, what I think we’re seeing is a renaissance of new companies that have been built in a different way from what we had maybe a decade ago. So a decade ago, we had some high flying companies, many of which were really focused on one or two drugs that they were moving forward. And when that works, it’s of course, it’s wonderful, but it’s always fragile. There can always be something that comes in and replaces it based on what was, I think, a real decline in our sector here in Canada. The new companies that came up really got built at a time when there wasn’t much capital and they found ways to bootstrap up and to take a more diversified and platform approach to building their business. So the new companies that we’re seeing are companies that are really focused on building the capabilities from which you can take multiple shots at doing drug development and then having those capabilities, being able to make deals with large pharma companies, with small pharma companies, to find revenue, to find validation until they get to that critical mass where they can start to develop their own drugs.

Speaker 1 [00:24:48] Curious what advice you might have for other Canadian companies, entrepreneurs especially wanting to get noticed by global investors and attract that kind of especially smart capital to whatever it is they’re doing.

Speaker 2 [00:25:01] It’s probably several things that I could say about that. Maybe the first would be that this is not something that you just flip a switch and you’re connected to these investors and you close these deals. These are relationships that need to be built over time. And so spending time in the big centers, taking the calls, networking, that’s a critical part of it. The other advice that perhaps is targeted really towards Canadians is to be wary of being too conservative in your plans, not bold enough in the vision that you’re you’re projecting. I’ve certainly noticed that if you’re north of the forty-ninth parallel, people are often criticizing you for being unrealistic and what you’re trying to achieve. And the same plan, if you pitch in in San Francisco, people would ask you why you’re wasting their time, because it’s not big enough. So if you are not setting the bar high enough, if you’re not going after that really big market, something that could be a global company, you are not going to attract the interest of the really best investors because they’re not looking for incremental. They’re looking for game changing ideas.

Speaker 1 [00:26:00] That’s great advice. I’ve heard from investors in Silicon Valley that whenever we hear a number from a Canadian entrepreneur, we usually add 20 percent because they’re always low balling it. That’s just the Canadian way. I wonder if you might share some reflections on the state of universities in this country. You’ve spoken very highly about UBC, which you’ve got a strong and long attachment to. And I’m wondering what we need to think about for the decades ahead in terms of the continued advancement of Canadian universities to be at the center of a thriving, globally relevant biotech sector or sectors.

Speaker 2 [00:26:37] I’ve actually thought a lot about that in my last two years as a professor at UBC, I had the unique perspective of being both an educator and an employer that was growing the company and had the opportunity to interview many, many employees. One of the things I would say, first of all, is that I don’t think there’s any requirement to revise the technical curriculum. If anything, we could take material out of the curriculum because most of what people need to know is the basis of science. Then they will learn what they need on the job. If anything, I think we need to better expose students to information about what is happening in the sector to make them first and what are the new technologies and what does it take to succeed in this space. So they get excited about it so they can better understand the relevance of what they’re doing. And perhaps third is spend more. Time emphasizing, if not developing those professional skills that are going to make the difference between being hired or not and that once you’re in an organization, ultimately determine how impactful you’re going to be and how high you can rise up in the organization. And so perhaps it’s not the most conventional view, but I think within the STEM fields, we’re probably have an overemphasis on the technical and not enough of an injection of the big picture and maybe even some of the liberal arts types of courses that help to round out a character and make someone a better a better employee and a better citizen.

Speaker 1 [00:27:59] And one of the common critiques is, you know, also is that we don’t commercialize enough, especially IP, whether it’s coming out of universities or other sources. What should we be thinking about as a country, especially coming out of the pandemic and with all the IP that we’re likely to see in fields like yours to ensure that more of it stays in Canada and becomes a stronger base for economic growth?

Speaker 2 [00:28:22] Well, intellectual property is critical. I think the very best way to get these technologies into the world is through the formation of companies getting more people interested in that space and providing the resources to help launch these companies, that it’s a hard thing to solve, but it’s one that gets better and better as you have local successes, perhaps a very practical thing that I think would make a huge difference, at least at UBC, and I suspect it’s true across the country, is that the technology transfer offices that manage this intellectual property and need to make those decisions on protection early on are woefully underfunded. If you look at the total budgets for discretionary funding, it’s a small fraction of what would be appropriate for a research organization of that size. I’m talking about low single digit percent, if even that high. So because of that, I’m sure we’re losing a lot of value that even when it gets picked up later by a company, perhaps it wasn’t filed as broadly as it could have been. That is something that’s easily corrected and that if we do it, I believe it’s going to keep more value here in Canada, both in terms of the IP and also the companies that are launched on it.

Speaker 1 [00:29:30] Tell us a bit about your own ambition for AbCellera. You started off with just six employees not so long ago and earlier this year it was just over two hundred. I think you’re planning to double that by year’s end. That’s pretty aggressive. You’re building a new campus in Vancouver. I’m wondering what gives you so much confidence about where things are heading to bet on this growth today?

Speaker 2 [00:29:50] I think we’re approaching three hundred employees and we’ll be well north of 450 by the end of the year. And the campus that’s getting built is three hundred and eighty thousand square feet, I believe, ballpark with additional plans to expand into manufacturing facilities. These are absolutely big plans, unprecedented, an unprecedented footprint here in Vancouver and of course, the creation of hundreds of well-paid, highly skilled, cutting edge technology jobs. One of the things that I am most excited about in the company is that emphasis on technology, our long term vision, is to become the undisputed leader in technology for therapeutic antibody development in the world. I actually think we are knocking on the door of that right now if we’re not already there, and to not just maintain, but to extend that advantage for decades to come. If AbCellera is a bold strategy on long term investments, on technology that could help to open up new therapeutic areas, make things run faster, and what you’re going to see from us is R&D. You’re going to see technology and licensing and acquisition and probably most importantly, building out the capacity, the people, the systems, the infrastructure that allow us to have as big an impact as possible on the entire industry. So I see that as a technologically advanced factory, the input of which is the problems of drug discovery and the output is innovation and the intellectual property that can lead to new therapies to treat patients. The biggest ambition is to show the world that when you take a long view on technology and you get the right people in place, you can build an organization that people are proud to be a part of and one that does one that has a real positive impact in the space and in particular in making it easier and faster to get therapies to patients and to do that in a way that reaches more people and is more cost effective. And I do believe that that that starts with getting the people right and the technology and the mission of the company. And I feel like we’re on we’re on a great path.

Speaker 1 [00:31:58] What an incredible vision. Incredible conversation. Carl, thanks so much for being part of Disruptors.

Speaker 2 [00:32:03] Thanks so much, John.

Speaker 1 [00:32:04] My guest today has been Dr. Carl Hansen, the founder and CEO of AbCellera Biologics. I’m John Stackhouse and this is Disruptors, an RBC podcast. Stay tuned in the weeks ahead as we bring you some of our favourite episodes from the past year and update some of the amazing stories of Canadian resilience. Talk to you soon.

Speaker 3 [00:32:32] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more Disruptors content like or subscribe wherever you get your podcasts and visit rbc.com slash disruptors.

This is Disruptors an RBC podcast, I’m Trinh Theresa Do, sitting in for John Stackhouse. In the first half of this episode, we’ll welcome an expert panel to discuss the state of digital health in Canada and get them to crystal ball what the future might hold for this fast changing sector. And in the second half, we’ll talk to the co-founder of a Montreal based telemedicine company that promises to put a human face on digital health care. While the digitization of health was well underway prior to 2020, the pandemic changed the rules of engagement almost immediately. Experts were projecting that 30 percent of all the ambulatory encounters in North America would be virtual by next year 2022. Compare that to just two percent at the start of 2020. Of course, those numbers are actually even higher in the middle of last year because so many of us were afraid of going to the doctor’s office or you know, even leaving the house. So where will those numbers land once a new normal or new comfortable reality is established? To explore this question and many others. I’d like to introduce two of the leading players in the Canadian digital health industry, Dr. Brett Belchetz is co-founder and CEO of Maple, a national virtual care provider connecting patients and health care practitioners for online medical visits. He’s also a practicing physician in Toronto and former management consultant with McKinsey and Co. Welcome to Disruptors, Brett.

Speaker 2 – Dr. Brett Belchetz [00:02:50] My pleasure. Thanks for having me.

Speaker 1 [00:02:52] And also here with us today is Hamed Shahbazi, the founder and CEO of Well Health Technologies. A serial entrepreneur, Hamad also founded payment solutions provider Tío Networks, which was sold to PayPal in 2017. Hamed, welcome to Disruptors.

Speaker 3 – Hamed Shahbazi [00:03:06] It’s great to be here. Thanks for having me, Theresa.

Speaker 1 [00:03:08] Before we get into the state of this fast moving and complex industry, I’d like to understand how you both got into it in the first place. Brett, you’re an E.R. doctor. That’s probably a very busy and demanding job. So why did you decide to launch Maple back in 2015? And how do you balance that while still doing some shifts at the hospital?

Speaker 2 [00:03:28] I would say my experiences in the hospital are actually one of the primary drivers for what led me to start this company. Every time I went to work in the hospital, I would see patients waiting eight hours to see me for three minutes of my time for really simple needs, like a prescription renewal, treatment of a urinary tract infection, to have a rash looked at. And at the same time, what I was noting is that my friends and family members, they didn’t have to have that unpleasant eight hour wait in the emergency room. So my friends and family members, they got to text me and they got to FaceTime me and I was able to solve most of their issues in a matter of a few minutes while I was at home and while they were at home by text message or by FaceTime. And that made me realize there was an opportunity to bring that kind of convenience of health care to everybody in the country. And that was really the moment that led us to say, let’s build that platform. We didn’t see anybody else that was doing that. We didn’t see anything like that in Canada. Let’s build that ourselves and let’s bring that kind of convenience to all Canadians. When we started Maple, I was working a full time set of emergency room shifts at the same time as running Maple. And typically I would run Maple from 8:00 a.m. until six p.m. and then go to the hospital in the evenings. And that was not an enjoyable life and not very good for friends and family relationships either. That’s definitely been dialed back over the years. And so typically I’ll do a couple shifts a month, typically on weekends, just to keep my skills up. But by and large, my Monday to Friday schedule is all about the business.

Speaker 1 [00:04:46] Hamed, when you founded well, in 2010, it was a network of yoga studios, I believe, licensing, the Deepak Chopra brand. And you’re a long time tech entrepreneur. So what was the appeal of health and wellness and why did you ultimately pivot away from yoga?

Speaker 3 [00:05:00] I had a relationship with Dr. Deepak Chopra and thought that it was really a phenomenal opportunity to bring his practices and teachings, especially the consciousness-based meditation and yoga practices that he was teaching in his Lucosta centre down in California. And Tio was sold in 2017, and I was pretty busy operating that business. I’ve always been interested in, I’ll just call them wellness technologies. I think yoga is a wellness technology. So is meditation. So exercise. And I’ve always been kind of a bio hacker and an entrepreneur at heart. And I think the journey as an entrepreneur often leads you to a place of wanting to aspire to greater and greater impact. And there’s no more juicy opportunity for impact, if I could use that word, than health care, because I think it’s sort of the original impact investment sector and the opportunity to tech enable businesses with something that really gave me confidence to understand that I didn’t need to necessarily be a doctor like Brett to make a difference, I could make a difference by bringing whatever gifts and talents that I had, but also bringing together talented people like Brett. My experiences in medical clinics in British Columbia definitely were instructive and helpful to understanding that there was a lag in health care digitization and modernization — and a tremendous opportunity to get involved with that and really push that along. And a recognition that no sector evades digitization, so this is going to happen at some point in time. And what a great opportunity to be a part of. And so while, Well, does have telehealth services like Maple, we also do a bunch of other things. We own health care clinics and allied health and primary care. We have secondary care practitioners. We have electronic medical records, services. We have billing and back office, just a whole suite of, I’ll just say, practitioner empowerment and enablement technologies and tools.

Speaker 1 [00:07:01] And that’s a good lead in actually, I’m curious if you can give our listeners a quick description about where Well and your respective offerings, where do they fit into the broader health care landscape in Canada?

Speaker 3 [00:07:11] So much of health care is driven by those workers, those frontline workers, the physicians. And I think a big reason for the lag in digitization and modernization is just how busy and burdened this group is and how little time they have for change management. And I think that’s where covid was both treacherous and valuable. Stepping back, that’s what, Well, really set out to empower the two most important subjects in the health care equation, the patient and the doctor. And we started our focus on the doctor and other health care practitioners. So, again, the vast majority of all the different products and services that we have, even though they’re organized in different business unit, that’s really sort of the unifying principle that they’re assisting physicians in and supporting their business.

Speaker 1 [00:07:58] Brett, I’d like to turn to you with the same question. Can you give us a quick overview of Maple and how it fits into the landscape in Canada as well?

Speaker 2 [00:08:06] If you go back to the premise as to why we started the business, the number one thing we were solving for was that it was very, very difficult to get access to primary care, specialty care, etc. And so our entire system looked at this problem set, which was contrary to what is the common misconception in Canada, that we have a lack of access to care because we don’t have enough doctors. In fact, the problem is that we don’t use our existing physician workforce well. If you actually look at the statistics of physician workforce utilization in Canada, what you’ll find is that 50 percent of primary care doctors and 50 percent of specialists actually do not work full year full time. So there’s tons of hours up for grab. And there’s many, many reasons why we’re not using all of those physician hours that are available. I would say that probably the number one driver of that is the way the physical health care system is designed, is that it makes it very hard for a physician to want to work or to be able to work full time. If we go back to what we do, we built a platform that really allows us to tap into all that excess capacity to make it available in the virtual world to patients that are across the country. So we’re able to blow away wait times that you would see and shift based systems that you see in the physical health care system. So our average wait time in that system is about two minutes, so from the time a patient clicks to say, I need to see a doctor, they’re typically speaking to a doctor in about two minutes time.

Speaker 1 [00:09:22] Hamed, your company has bet big on bricks and mortar. Well is the single largest operator of primary health care clinics in B.C. and the fourth largest operator in Canada, I’m sure your background in payments was very helpful in handling medical claims processes for physicians and other practice management needs. My question is, why was it important for, Well to be in the practice management clinic operations business?

Speaker 3 [00:09:45] Well, again, had a bit of a different mission and objective than Maple. And for us, we were really wanted to invest and grow in areas that we felt would also be benefited greatly by digitization and modernization. So in our view, there was a really valuable opportunity to help progress the plain vanilla medical clinic and to make it the clinic of tomorrow. And what does that really mean? That means elevating the software and workflow and tools and capabilities of clinicians and practitioners. It also means elevating the cybersecurity. It means improving the payment technology – it means so many of these clinics were operating in the Stone Age. And and so it just seemed like a really valuable endeavour, both from a value creation perspective, but also from a purpose perspective. Given how many of these clinics are out there and the need for them to continue to be there.

Speaker 1 [00:10:42] I want to quickly turn to the use of technology in your work, in providing access to services and improving health care outcomes, but also lean into the physical question, the bricks and mortar question, which will always be a mainstay in health care. And Brett, I understand you’re driving towards an omnichannel health experience. Can you tell us more about that?

Speaker 2 [00:11:01] I think from clinical experience, I can tell you that about 50 percent of problems are pretty transactional and don’t require me to touch a patient, but 50 percent of problems require me to do something that is physical. And so speaking about omni channel, then the question is how do we then enact an omni channel strategy for a company such as ourselves that exists only in the virtual world? And I think for us it’s not about building out our own chain of clinics. I think there are many people that have excellent powerful chains of clinics and we don’t need to replicate that. There are companies like Hamed’s company that they have a fantastic presence in the physical world, our partnership with Loblaw and Shoppers Drug Mart, who made a very large investment in our company in the fall of 2020, they have one of the largest physical presences in the country in terms of a physical footprint of health care clinics. And many of those clinics are able to be increased in terms of the level of care they’re providing. So I think in terms of omni channel, where we go is we’re awesome I think in the virtual world, I think we’ve created a great experience there. But those who have really done a great job perfecting the in-person experience, what we want to have is a system of very well orchestrated handoffs between the physical and virtual world. I don’t want to go and build a chain of physical clinics. I want to work with those who’ve done it and I want to coordinate that very well.

Speaker 1 [00:12:11] Concerns over data and privacy have been very big topics recently, especially so. I’m curious, how do you allay the concerns and objections from some patients, doctors and others in the sector about how privacy is handled? Brett, I’ll turn to you.

Speaker 2 [00:12:26] End to end, it starts with, we have a very basic set of requirements in Canada around what our privacy law requires. There’s some very well accepted standards around what you have to do in terms of data security. And we have to make sure that we very transparently communicate how we adhere to all of those requirements under Canadian privacy legislation. And certainly, I think in the early days of digital health care in Canada, there were a number of players that were not properly adhering to that. And even during the early days of the pandemic, we saw the use of platforms for virtual care that did not adhere to Canadian privacy legislation requirements. We saw many health care providers thinking that they could use FaceTime for a health care visit, which you cannot for a number of reasons. I think the other side of it is, when you look in the digital health space and especially in the United States, what you’ll see is there are many, many businesses whose entire economic model is based on the monetization of patient data. And that is quite problematic. I think while there is a certain segment of the population that is probably OK with that, I think many patients would feel very, very concerned about the fact that they are viewed as an asset to be monetized and especially with their health care information. We as a company, for instance, have taken a philosophy from the beginning that we will never monetize your patient data, we will never sell your data to others. We will never let others profit off of your data.

Speaker 3 [00:13:42] Yeah, so I would echo what Brett said. I think he laid it out really nicely. And we have precisely the same philosophy. We do not monetize patient data under any circumstances. We also have, you know, a ton of data. I think that’s a really important statement for a player like us to make. We have the third largest EMR in the country on a portfolio of telehealth assets, which is something I haven’t really talked much about, which is a sizable portfolio, depending on what metric you use. I’m sure we’re somewhere in the top three, but we probably have well over 20 million consumers in our combined EMR databases, and that’s not even considering some of the other assets that we have. So we have a tremendous amount of data. And to us, it’s incredibly important to draw a hard line, a very clear line about that.

Speaker 1 [00:14:32] Where do you see things going post pandemic? What opportunities are there for entrepreneurs and leaders like yourselves who want to improve the way health care is delivered in Canada? Brett, we’ll start with you.

Speaker 2 [00:14:44] So I think we’re really at a crossroads as we come out of the pandemic. I think we’re in a place where we’re either going to achieve remarkable gains in terms of where we go or we’re going to see things back track. Unfortunately, a lot of where we go will depend on what our governments decide to do next. We’ve had an attitude for a little while with government is that we want to sort of have our cake and eat it too, which is we’re going to be able to reduce our capital spending on hospitals because we’re going to move a lot of care to be virtual, but we’re not going to fund the virtual infrastructure. So now we can just take a lot of money and save it. And I think that’s where the attitude was. And I think you’re starting to see a growing realization on the part of government here in Canada. And you’ve seen a lot of announcements of investments in virtual care where they’ve started to say, in fact, we should fund virtual infrastructure the same way we fund physical. We want patients and doctors and allied health care providers to have very strong and good experiences in virtual. We want it all interconnected. So we are actually going to realize that we need to dedicate similar to what Kaiser did, very large amounts of funding that we’re going to save in the hospital system to virtual care. At some point in time, every entrepreneurial company, no matter where you’re born, has to say what’s the most receptive market for us? And I want it to be Canada because I’m very proud Canadian. I want our government to create awesome digital infrastructure. But in the end, we as a company are going to go where there’s opportunity and I hope it’s here, but if it’s not here, we’ll go to where the opportunity is.

Speaker 1 [00:15:59] It sounds like some cautious optimism, but still big questions ahead. How about how about you, from your perch, what does the future look like?

Speaker 3 [00:16:05] When I ask people, what do you think is the most important factor in maintaining good health? You’d be surprised. The answer, access to quality health care rarely comes up. It turns out your behaviours, your lifestyle is what really drives the greatest influence in terms of where you go from a health and wellness perspective. The problem is a lot of people just don’t know how to act. They don’t know how to eat. They don’t know that there are gently eroding their good health over time. Patient empowerment platforms that bring your data together demonstrate how you’re doing against those benchmarks and nudge you gently and maybe sometimes not so gently are incredibly important.

Speaker 1 [00:16:49] As we’ve said, this sector is very complex and there are a lot of challenges facing us. But from our conversations today, both of you have expressed a lot of optimism and enthusiasm for the challenge. So thank you both for being here today on our show. Hamed and Brett, I really appreciate your time.

Speaker 3 [00:17:07] Thanks, Theresa. I really appreciate it. And thanks to Brett as well.

Speaker 2 [00:17:10] And thank you so much for having me. It was a real pleasure and also a pleasure chatting with you again Hamed.

Speaker 1 [00:17:15] My guests today have been Brett Belchetz, CEO of Maple, and Hamed Shahbazi the CEO of Well Health Technologies. Coming up, we’ll talk to another leader in the telemedicine space about how they aim to humanize the delivery of telehealth services.

Midpoint – Speaker 1: You’re listening to Disruptors, an RBC podcast. I’m Teresa Do, filling in for John Stackhouse. Key to success of any entrepreneur is a keen sense of creativity. And in case you missed it, Disruptors recently dropped a special two-part series on the subject with guests from iconic Canadian brands like Lululemon and Shopify, plus Richard Florida, the urban studies guru behind the book, The Rise of the Creative Class. Find it wherever you get your podcasts.

PART 2

Welcome back. As our previous panel laid out, digital health is a vibrant sector full of opportunities, but some Canadians are still hesitant to log on, preferring the in-person intimate experience that they get with their primary care provider. The question is, can digital health care providers offer the same sort of intimate care that your local doctor or clinic can? Can virtual care show love? To answer that question, I’d like to introduce Anna Chif, the co-founder and chief strategy and product officer for Dialogue, a Montreal based telemedicine company. Dialogue promises to, quote, humanize health care and offer a more personalized approach to digital health care delivery. Anna, welcome to Disruptors.

Speaker 4 – Anna Chif [00:18:56] Thank you. Thank you so much, Theresa.

Speaker 1 [00:18:58] So the story of health care is ultimately the story of human beings. And everyone’s journey through the health care system is a very personal one. Anna, can you tell our listeners the story about your grandmother and how it is you came to found Dialogue back in 2016.

Speaker 4 [00:19:15] So, you know, I always speak about the founding of Dialogue as an alignment of stars. We came, we’re three co-founders. We were part of Diagram and we all came to working on Dialogue from a very personal experience and mine that still inspires me today and gets me out of bed is, in early 2016 I was taking care of my grandmother who was in palliative care. She was struggling from from a cancer that took over her body and was exchanging with my mother quite a bit, kind of the shifts in staying with her. And every time we had a question, we, it was a struggle to get answers. And I vividly remember this one night where she was very sick and I tried to get a hold of her doctor. And the nurse of our oncologist basically said, look, like he can see her, but you need to bring her to the emergency room. And I was like, it doesn’t make sense, it’s 2016, and there’s got to be a different way. And that to me was like this deep motivation for building a service and a product that has empathy and care at the core of what we do. And today we serve thousands of individuals every day. And what I think about the fact that some of them come with these sorts of issues that couldn’t be answered five years ago, I think it’s just it’s something that today is still really, really motivating, at least, you know, to me personally.

Speaker 1 [00:20:40] My my grandmother, she passed away last year. And I remember before she passed, she was in and out of the hospital because of her diabetes, which gotten very severe. But I remember there was one acute point where she was so afraid of going back to the hospital because it felt very inhuman — you wait there for hours and then you see a doctor for a few minutes and they kind of look at you, they look away and they leave the room. And I remember that being so heartbreaking because you want to care for them. You want them to have the best possible health they can where they are. And and yet sometimes our system doesn’t allow for that.

Speaker 4 [00:21:16] And you know, what’s really kind of special, I would say, in Canada is that the providers that we have, the doctors, the nurses that work in our health care system, the reason they do it is because they care for people. So what to me is so special about technology and virtual care is just this ability to redirect a portion of the population being treated differently so that the people who really need this in-person care get it and get that attention, and that it’s not just a few minutes coming from a physician who probably has the best intentions, but it’s just not set up in a way yet to tackle every person.

Speaker 1 [00:21:51] You’re based in Montreal, which was ground zero for, unfortunately, casualties in the first wave of the pandemic, especially among seniors and long term care homes. How did those first few months affect you personally, especially as someone working in the health care sector?

Speaker 4 [00:22:06] One of the investments that we’ve done earlier on at Dialogue is investing in smart triage, so we have, we call her Chloë. It’s it’s an automated medical assistant. So what we did is within a few days, hackathon style, we made that Chloe available to all Canadians. And that was before every government had their own guidelines and regulations. And so everybody, especially when it hit and all of Canada went into confinement, people were looking for information. So what we did is we made Chloe accessible to everybody and we were redirecting based on symptoms and questions and province or location, we’re redirecting patients to the right next step in the right information. At some point, we’ve welcome a million users in a week. So we had to scale up our platform and make sure that all these people could gain access if they needed to the platform. And the other part of the story, and that’s something we hear in the news quite a bit related to the pandemic, but we see it in the numbers. It’s mental health issues doubled on our platform between 2020 and 2021. It’s massive, right? It is, thankfully, getting more and more destigmatized because I think more and more people are living it. But the number of people who come on the platform at the brink of burnout because either their employer is cutting employees and shutting down or putting everybody on temporary leave or some other sectors like the virtual care sector that are booming and that are expanding so fast that how can you keep up with that scale up and the remote work and kids at home and young kids at home. I had a covid baby. And so just personally learning to manage having a baby that didn’t see anybody, not being able to see my family, my family, not knowing him, you know, working throughout that. And I think it’s just it just brought these virtual medical services to be much more human and to use that approach in every single interaction.

Speaker 1 [00:24:08] You hear of people who are more comfortable speaking about their struggles in the comfort of their own homes. And yet there are also others who have trouble connecting with practitioners over the screen. So how are you approaching that?

Speaker 4 [00:24:21] So that’s a really great question. And we actually pre pandemic launched a mental health program that we called a very high touch mental health program. So what we did in that program specifically was, every member who would come in, who would have access to that specific mental health program with any health or wellness concern, we would surround that patient with, first, a case manager who acts as an accountability partner or somebody who follows up, but also a doctor and a therapist. And different people react to different things. So it’s not just therapists in person or in video or not. Some people are much better reacting to medication because of the way they are. And they trust more the kind of, the external solution or medication then working through painful realities that they’re going through, and so it depends. So we would have this multidisciplinary team that works with that patient to bring them to remission as quickly as possible. And then we maintain ongoing follow-up to make sure that these people don’t dip or don’t go back to some of those mental health issues that we know can be recurring. But you’re absolutely right. That approach is not for everybody. And one of the new programs that will be launching in 2021 is actually Internet based cognitive behavioral therapy. So something that is much more patient led and that also can address a wider scope of mental health issues. Often a lot of individuals don’t perceive themselves as suffering from mental health issues. They might say, you know what, I’m just having a really stressful time and so getting into that direction of having cognitive behavioral therapy that you kind of do on your own pace becomes really interesting and important.

Speaker 1 [00:26:06] I’d like to pivot towards the broader approach of the company. There was a strategic decision to target employers for your services rather than going directly to patients. Why was that decision made?

Speaker 4 [00:26:17] Our platform has always been this B2B. So what is B2B mean? It just means that when we make the platform available, we make it available to employers for their employees or through channels. It could be insurers such as Canada Life, Sunlife and others. It could be student associations. The reason we took that approach is that we always believed and that I think resonates quite well with just the Canadian health care system, is that a patient should be empowered to use a service whenever they need when it comes to their health and wellness. And so we don’t have this notion of the individual paying for consultation. And it also doesn’t create this obligation on the medical side to deliver something. So we have a team that we recruit, that we train, that we train the Dialogue kind of empathy way, but we always make sure that what the team does for any given member or patient is the best thing for that patient, despite somebody coming in and saying, well, I want antibiotics. So there isn’t that that expectation. So for us, having the employer pay made it more accessible and also remove that odd dynamic where because I paid you as an individual, I’m now expecting that you do what I paid you for. It also allowed us to train our staff in a certain way, very much around empathy and follow ups and follow ups are obviously free because it’s all included as part of what your employer offers to you. And it’s also a way to focus for us. I think every company picks an angle of focus and for us, making sure that we work with our clients to ensure that as many employees as possible in those organizations use the service is our focus.

Speaker 1 [00:28:07] You mentioned the Dialogue way a couple of times. And I’d love to ask you more about, that, how does that approach stand out and what goes into developing that empathy?

Speaker 4 [00:28:18] You asked me for stories, so I’ll start with a story. So we, when we were getting started, we had this nurse, Chloe, and by the way, our medical automated assistant is called Chloe after this wonderful human being. But she was she was a nurse that was working on Dialogue. She was our first nurse. She joined us before Dialogue even had a name. And for her, the reason she went into nursing is because she deeply cared about every individual. And at the very beginning, when we had two patients a day and then 20 patients a day, she was handling every single one of them. And she knew those patients and she was following up. And I remember we were sitting in a cafe with her and I said to her because we hired a second and a third nurse, and I said, Chloe, we need to we need to codify what you do. We need to like, write it down. And that list and that cafe became this initial training that we started giving every single member that was coming in. And so back then, there wasn’t a Dialogue way. It was just that’s how we wanted to treat every single person who came on the platform. And as we hired more people, we started screening for people who deeply care, who see medicine as a way to improve and make people’s lives better and happier. And over time, this bullet list on a piece of paper drawn in a cafe turned into a real training that every single professional who works on our platform today, whether it’s a care coordinator, a doctor or a nurse practitioner.

Speaker 1 [00:29:48] What challenges do you see over the next 14 months in scaling this platform and now that you’ve gone public, bringing more and more Canadians onto it?

Speaker 4 [00:29:58] So certainly one of the challenges and opportunities is to make sure we prioritize the right products and services for our members and make sure that people continue using it and continue coming back to Dialogue. From the early days, when, we said don’t Google it, Dialogue it, because when you Google something, it’s quite terrifying. And when you come to Dialogue, it’s quite reassuring. So I think it’s continuing to build that, to build that habit. I would say those will be the right challenges. How do we continue scaling that, offering the right products? And quite frankly, I certainly don’t want to take it as a given that our Dialogue way or that our culture is something that is nailed forever. I think as we continue scaling, as we’re bringing more and more individuals as part of the team, that is certainly top of mind.

Speaker 1 [00:30:44] So then my final question following on that, is where do you see virtual care going in Canada next year and beyond?

Speaker 4 [00:30:52] From a Dialogue standpoint I think it’s going more and more into this proactive and predictive type of medicine where patients come in, maybe share some information and over time, we’re able to give them something more relevant and capture issues at the very, very kind of nascent point of them, as opposed to treating issues that have been lingering for years. So that’s definitely somewhere I see both Dialogue going. But I think medicine overall is moving from I’m sick, I’m getting care, to: here are some behaviours you can change and here are some tools to do that in order to ensure that you don’t go down a path that leads you to sickness.

Speaker 1 [00:31:34] A much more proactive balanced, holistic way of living and approaching one’s health care. That is so fascinating, Anna, thank you so much for your time and for this conversation.

Speaker 4 Thank you. Thanks, Theresa.

Speaker 1 My guest today has been Anna Chif, the co-founder of Dialogue. I’d also like to thank Brett Belchetz, the CEO of Maple and Hamed Shahbazi, the CEO of Well Health Technologies. I’m Teresa Do and this is Disruptors, an RBC Podcast. Join us next time when we’ll talk to some of Canada’s leading indigenous entrepreneurs about the skill sets required to create the leaders of tomorrow. Talk to you soon.

Speaker 4 [00:32:16] Royal Bank of Canada is an investor of Maple (RBC holds Class A Common).

Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more Disruptors content, like or subscribe wherever you get your podcasts and visit RBC Dotcom slash disruptors.

Unidentified [00:00:06] Hey, it’s Theresa,

Speaker 2 [00:00:13] did you tune in back in February when Perseverence hurdled through the thin Martian atmosphere to become the latest spacecraft to reach the red planet? It was really, really exciting to be able to watch the landing in real time and then two months later, to see NASA’s Mars Ingenuity helicopter make history as the first paragraph to fly on another planet. But this is only the latest in a string of big happenings beyond Earth’s surface — from Space X’s inaugural crewed mission to the International Space Station, the first human launch from American soil in nearly a decade, to news that a Canadian will join the U.S. and Artemis two in 2023. You could say things are really taking off with the launch of about one. In September of 1962, Canada became the third country to put an artificial satellite into space. And over the past six decades, Canada has developed a world leading reputation in robotics and satellite and earth observation technologies as we approach our seventieth anniversary in space. The question is, what will it take for Canada and Canadian companies to continue to be seen as leaders in space? This is Disruptors, an RBC podcast. I’m Trinh Theresa Do sitting in for John Stackhouse. In the first part of the show, we’ll talk to one of the pioneers of Canada’s robotic sector, a company that put this country on the extraterrestrial map. We’ll talk to the Canadian engineer behind an upstart satellite maker based in Silicon Valley who’s now making waves around and above the world. But first we ask an expert, what are the opportunities for Canada in space right now?

Speaker 1 [00:02:00] My name is Manon Larocque. I am the executive director of Strategic Policy and Domestic Affairs at the Canadian Space Agency, CSA. It is an exciting time right now to be in space. There has been a lot of changes in business models, namely with the advent of commercial space. So more and more space entrepreneurs that are looking at what can be done in outer space and are investing significant amount of resources to go and explore space, explore the unknown. In Canada, we have been active in the space world for many, many years and have certainly recognized how space provides a unique vantage point from which to observe Canada, significant land mass and coastal areas to connect Canadians as well. Space challenges us to think about our place in the universe, pushes us to further explore, constantly innovate and the right. Now is a perfect time to be doing this with some global opportunities on the horizon.

Speaker 2 [00:02:57] Canada’s history in space dates back decades, but there is a definite sense of momentum right now. And one of the companies that’s been there from the start is Brampton, Ontario based MDA. Just last December, it was tapped to develop a third generation A.I. based Canadarm three. It’s the most advanced robotics technology yet and destined for Gateway, a NASA led lunar orbiting International Space Station is an exciting new technology that promises to open up a whole new world of opportunities. To discuss that and more, I’m joined today by MDAs chief executive officer Mike Greenly. Mike, welcome to Disruptors.

Speaker 3 [00:03:33] Thank you for having me. It’s great to be here.

Speaker 2 [00:03:35] So, Mike, you’ve spent more than twenty five years in the defense and security sector before joining MDE in twenty eighteen. Why did Space appeal to you?

Speaker 3 [00:03:44] Actually, Space has always appealed to me. Back when I was a student in university, I was actually in a co-op program. I did work terms, defense research labs and the defense research labs where we’re doing analysis and research work with the the first six astronauts the candidate ever had. So very, very early in my career, I got to work in space and and study what it means to go to space and study space sickness and space orientation. And that kind of got in my blood right from the start. And then I spent a lot of time in defense and aerospace, like you said, and now I get to come back to space and have a great run here with NBA.

Speaker 2 [00:04:17] That’s perfect. You are so well positioned to tell the storied history of our sector. And MDA is considered a legacy company within the sector, responsible for a lot of the reputation, the esteem that Canada has built up over the years. Because if people know anything about Canada’s efforts in space, it is the Canada arm with the Canadian flag emblazoned on its side and appearing in countless photos and videos. How important has the Canadarm been to the development of our domestic space sector?

Speaker 3 [00:04:46] I think it’s been really important. Like you say, it’s become the iconic kind of sort of brand icon of Canada’s participation in space. Canada was the third country to go into space. People don’t know that we didn’t go into space by going to the moon. Everybody else was trying to get to the moon. But we started doing business in space, putting communication satellites up. That was then followed by Earth observation satellites. And we started to do economic activity and nation building capability in space because Canada is such a large and diverse nation, such a large piece of real estate. If you want to be able to observe the goings on around Canada and our borders, it’s easy to do that from space. If you want to bring communication or TV signals and everything to such a large country, then it’s easy to do that from space. In addition to the inspirational element that comes from participating in space exploration, going to the moon, having an international space station, having an astronaut corps, and then, like you say, that iconic Canadarm on that space station. It has become when you survey poll Canadians and I’ve I’ve sat behind two way mirrors and listened to focus groups about Canadians talking about space. Everybody knows the Canada arm. It’s on the back of our five dollar bill. It’s become a very important iconic element, but it represents that that full, broad range of participation in space that I just described.

Speaker 2 [00:06:01] I’d love to dig into the company a little bit more because MJ is more than just the Canadarm, along with robotics and space operations. You’re involved with geo intelligence and satellite systems. Can you share with our listeners how these business lines work together in support of the company’s mission?

Speaker 3 [00:06:17] We are an advanced technology provider across the space sector. That’s what MDA is where we’re based in Canada. We’re a Canadian based company, but we’re a global technology provider around the world, across the space sector and almost every element of space except launch. When you look at what happens in space, we have. At the first level, this space to earth economy and in the space to earth economy, we have communication and earth observation and earth observation. We put up satellites to observe the Earth and we sell and deliver images of the activities on Earth to customers around the world. Every day. A large body of work in the satellite systems business is building communication satellites that go into geosynchronous orbit to bring us our TV and broadcast signals, for example, and then new constellations in low earth orbit, which are going to start to bring us broadband Internet and the Internet of Things and 5G communications in observation around the Earth in robotics and space operations. It’s all about that space exploration. We put robotics on the space shuttle and flew one hundred missions. We put robotics Canadarm2 on the International Space Station like we’ve been talking about. We’ve operated that for 20 years. And now, as you said, we’ve been contracted for Canadarm, three artificial intelligence based robotics for Lunar Gateway, the new space station that’s going to orbit the moon. It’s my secret wish someday that NDA will be the community mobile communications provider to the activity on the lunar surface.

Speaker 2 [00:07:40] And perhaps that day is not too far off. I’d like to stay on the satellite systems for just a moment. It’s an increasingly competitive area with more and more being lost every day. How is Emdur continue to innovate over the past 50 plus years? What keeps your technology fresh?

Speaker 3 [00:07:56] MDA, the world’s largest independent merchant supplier of satellite technologies across the satellite industry. So as a result of that, we get to supply satellite technologies to a wide range of satellite companies, and that really keeps us fresh and current. So everything that’s happening in the satellite industry and digital intelligence satellites, in addition to low earth orbit satellites, we get the opportunity to bid satellite technologies into those programs. So we’re constantly advancing our antennas, our electronics, our payloads and our complete satellite production capabilities towards a wide range of customers in the satellite business around the world. Some of the biggest trends these days that we’re dealing with is that the digitization of satellite satellites transitioning from analog to digital so the satellites can now become a reconfigurable in orbit. You don’t just put it up to do one purpose and operate in one way.

Speaker 2 [00:08:51] I’d like to pivot slightly now to talk about some of the innovations that we’ve been seeing with regards to the space sector. And one is the entry of big tech into the sector. And recently, MDA and Microsoft announced a partnership to reimagine space missions using mixed reality. Can you describe for us what that is and why it’s important for future space missions?

Speaker 3 [00:09:11] I’m sure in that particular project we’re using definitely mixed reality to be able to not only participate in the design, obviously when you design something in space, you’re putting robotics on a space station that’s going to be orbited by the moon. Our current space station is is four hundred kilometers away. The new space station, Lunar Gateway will be four hundred thousand kilometers away. And so we have to design systems that are going to go up, get installed remotely and operate the first time and operate every time thereafter. So the ability to be able to design that and visualize it and experience the operations of it, mixed reality represents an excellent environment for that. In addition, we’ve been using that same environment for training, training of the astronauts so that they can have a wholesome, immersive experience in learning how their robotics operates and then be able to control and visualize the control of those robotics use and mixed realities. That’s what we’ve been doing lately, collaborating with with Microsoft in that area.

Speaker 2 [00:10:11] So that sounds to me like foundational technology to one day venture into deep space exploration. Is that correct?

Speaker 3 [00:10:19] No, actually, it can apply to that as you’re using those mixed reality environments to be able to do design and use training, then potentially you’re creating environments that have the opportunity for next generation control systems in terms of your ability to use those types of environments for operations in deep space. And there will be growing opportunity for operations in deep space. It’s not just like we talked about in the 1960s to go on space exploration, visit the moon and come home as we return to the moon in the next few years. We’re going to live there now and we’re going to start to have on orbit assembly, on orbit manufacturing in orbit between the Earth and moon. We’re going to have habitats on the moon where we live and and grow food in mind and create fuel and everything. The level of in space and deep space operations will be greatly expanding. And these are all fundamental technologies to be able to expand that.

Speaker 2 [00:11:11] Yes, that is fascinating and so exciting. In April, MDA had its IPO, which is the latest event in a long string of expansions and growth overall in what feels like this new space economy, which is slated to grow to a trillion dollars by 2040. As you know what’s changed over the past few years, that’s driving investment in the space sector.

Speaker 3 [00:11:31] Now, it’s one of the biggest things that’s changed. Over the last number of years has been a decrease in the cost of launch. So if we go back to the nineteen seventies and eighties and nineties, it was about eighteen thousand dollars a kilogram to be able to launch something into space. Right now, we’re down to about three thousand dollars a kilogram. And the folks in the launch business are trying to get that down to five hundred bucks. And so the cost of getting something into orbit is dramatically decreasing. And so I think that’s the biggest enabler of activity in space. With that, it now opens up literally a new economic frontier. Businesses can now, if they have an idea of a business that they can run in space, they can get into space and they can run that business because the cost of launch has decreased. So now we’ve seen venture capital into space based companies double every year for the last three years to go back to twenty eighteen. It was around three and a half billion a year that twenty nineteen it was five point seven billion a year and then twenty twenty was eight point nine billion a year. And so there’s hundreds of new space companies that are being created around the world now every year who can conceive of what can I do in next generation earth observation. What can I do a next generation communications? How can I secure communications in space? What manufacturing space so they can’t manufacture on Earth in a gravity based environment? What kind of chemical reactions could I cause or metals could I create? So people are consuming all of these ideas and if they can get financing for those ideas, they can get into space.

Speaker 2 [00:13:02] Stories about space have often been about a geopolitical race in the space race. It’s a competition. The first man to the moon. But the International Space Station and we’re Canadarm two currently lives is a project of cooperation, including between some terrestrial adversaries like the US and Russia. Can you share a little bit more about why cooperation and collaboration are so important in the space business?

Speaker 3 [00:13:26] I think it’s important because space is hard. So I hope hopefully I’m not making it sound easy and that it’s getting more affordable to get into space. It’s still a very hard, complicated engineering challenge to create technologies that can go into orbit, that can work the first time and work every time and can last in that very harsh environment. So the benefits of having experience in space are still extremely important. So collaboration is necessary because it is difficult. And I think that because of that challenge, SpaceX has developed a culture where it is naturally collaborative, it has transcended and continues to transcend terrestrial geopolitical conflict. And people do work together. We are seeing a new space race of sorts in terms of all the activity going to the moon over the next few years. We see the United States through the Artemis program kind of repeating a type of International Space Station type of a thinking, working with multiple countries to be able to set up capacity on the lunar surface. It includes Gateway, that new space station we talked about, the Canadarm three will be on. It will also include the habitats and vehicles and communication networks and medical capabilities to take care of people living on the moon. Everyone needs to work together for that because we’re trying to do large, complex things in a short period of time. China and Russia have recently signed a collaboration agreement. They’re going to work together as two countries to put a lunar base on the moon.

Speaker 2 [00:14:49] Canada is a relatively small player in the space sector, especially compared to big players like the US and Russia, France, China or Japan. So what has allowed this country to stand out, get noticed and get contracts?

Speaker 3 [00:15:04] We’ve been strategic in picking areas where we’ve been strong. So Canada has been historically a strong country in the area of communications and became strong in space based communications. Canada chose strategically a few decades ago to become strong and radar based Earth observation was based on our challenges as a country and our desire to monitor all of our large, broad coastal areas with three maritime coasts. It makes sense to do that with radar based satellites from space. So we strategically chose to go there and stay in a world leadership position in space exploration. Canada chose robotics as an area that was wisely chose. I would say I’m a bit biased, but I think that was a wise decision. You can’t be part of everything, but you need to pick your shots and then stand behind them.

Speaker 2 [00:15:49] As we mentioned earlier, MDA has a contract to develop and construct Canadarm three, which is a part of our contribution to the Lunar Gateway program. And two years from now, a Canadian astronaut is going to be part of the first manned moon mission and more than 50 years. What is the opportunity for Canada in space in the next decade? How far can we go?

Speaker 3 [00:16:09] We can we can go as far as we want. But so certainly, like you say, we’re putting Canadarm on Gateway. That’s caused a couple of astronaut missions, one in a couple of years to go around the moon. Like you said, there’ll be further missions out to Gateway in the future. There will be the opportunity for Canada to participate in the colonization of the moon. Canada will have the opportunity to pick areas where we contribute to technologies on the lunar surface. I would expect that the. Those contributions would start to cause women and men from the astronaut corps in Canada to start to go down to the lunar surface and live and work there as we go through the next decade. The same pattern will repeat itself as we look out towards Mars to be able to participate in those missions in the 20 30. So Canada continues to on the space exploration side. Canada continues to have a strong opportunity there if you look at that space to earth economy. I think that Canada could have a great opportunity to significantly contribute to space based communications, to be able to bring broadband Internet to people no matter where you live. It’s the ultimate equalizer. There’s a lot of room for growth still to come before Canada.

Speaker 2 [00:17:11] Seems like the final frontier is just a jumping off point. Mike, thank you so much for this conversation. Thanks for the time. My guest today has been the CEO of MDA, Mike, recently, but don’t go anywhere. Coming up, we’ll look at that space to earth economy that Mike just talked about and examine the role of satellites in building a world of affordable and accessible high speed communications. You’re listening to Disruptors and RBC podcast. I’m Teresa Doyle, filling in for John Stackhouse. If you’ve been tuning into Disruptors lately, you’ve probably heard our two part special series on creativity, which featured the CEO of Cirque du Soleil, Daniel Lamarre and Gil Moore from the rock band Triumph, among other stellar guests. But we also want to draw your attention to the companion research led by the RBC Economics and Thought Leadership team that looks at creativity as an emerging power, skill and labor markets and how we can leverage it. You can find the link in the show notes of this episode and be sure to like and follow disruptors wherever you get your podcasts.

Welcome back. Today, we’re talking about space and Canada’s important slice of this ever expanding universe. While legacy companies such as MDE continue to innovate in some of the entrepreneurial space ventures, especially in satellites that are increasingly getting noticed, big players like Elon Musk’s SpaceX or Jeff Bezos Blue Origin get most of the headlines. But there are a bunch of fast growing players in the satellite industry that are also making waves. One of them, Swarm Technologies, a Silicon Valley based company co-founded by a Canadian with 30 employees on Earth and over 90 satellites in space and swarms lofty mission to bring high speed Internet to underserved countries and markets around the world. A revolutionary development that truly would be one giant leap for humankind. And joining me now is Swarms co-founder and chief executive officer, Dr Sara Spangelo. Welcome to Disruptors.

Speaker 4 [00:19:18] Thanks for having me.

Speaker 2 [00:19:20] Tell us a bit about swarm’s technology, the world’s tiniest two way communication satellites. What are they being used for and how do they stay out of harm’s way up there?

Speaker 4 [00:19:29] The concept of small satellites is not new. Satellites have been shrinking over the past many years. Maybe in the 80s and 90s, satellites that were about a thousand kilograms were launched to do connectivity missions, imaging, et cetera. And we’ve seen those satellites generally shrink for a variety of reasons. So obviously electronics have been miniaturized. Turns out your cell phone is smarter than most satellites in space today. And then access to space has also become more available, particularly for these smaller payloads. So in the early 2000s, the concept of a CubeSat, which is about the size of a loaf of bread or a shoebox, about ten by ten by thirty four centimeters, started to become pretty popular. And a lot of people were building science and exploration missions that were this small when that was seen as very revolutionary. At that time, rockets started to make space for these small payloads so they could go up as secondaries or piggyback on those rockets and then actually got to work on some of those CubeSat missions while I was in grad school and about five years later realized that we could do something really novel if we could make the satellites even another 10x smaller in size. You’re right. We developed the world’s smallest two way communication satellites. They’re about the size of a grilled cheese sandwich. So if you took that loaf of bread and you slice it into 12 pieces of bread or 12 grilled cheese sandwiches, you got a swarm satellite

Speaker 2 [00:21:00] for companies that are outside of the space sector. What do you think they should understand about the utility of satellites?

Speaker 4 [00:21:06] First of all, satellites are extremely powerful. I think a lot of us forget that the GPS that we use every day, all the time is using a satellite. And then what we’re bringing to market is this lower cost connectivity piece. So right now, I think businesses tend to think, oh, I’m within cellular range. I can connect my device back to the Internet, I can bring back data through a cell phone tower. And if I’m out of cellular range, I’m just out of luck. There’s no way I can connect. Like when I go for a hike and I’m out of cell, I assume I cannot not send a message back home that I’m in trouble. And that could be an agriculture sensor truck, a ship, railway, whatever. And what’s changing with swarm and the whole industry is that we are allowing people to connect regardless of where they are on the entire planet. So now you should think that connectivity is available anywhere that you are at all times. And at a price point that is for the first time affordable on the order of four US five dollars per device per month, which is less than a Netflix subscription.

Speaker 2 [00:22:09] How has the space sector changed and how is the opportunity grown for startups like you? I know you mentioned you’re in the Bay Area. I’m sure that also lends itself to a lot of collaboration and support just in the region.

Speaker 4 [00:22:21] The last four years, I think from a just from a launch perspective, there have certainly been an increase in access to space. So there are more players. Now, Rocket Lab has really come into its own. Companies like Astra and Relativity and Virgin are on the brink of offering services, which will help us as well. Prices have lower due to space x’s innovations, and they’re kind of launch program. And then there’s been startups that have continued to act as third party integrators for more difficult launch opportunities like Sølve, which is in India, Viega, which is through the French government. There’s a lot more opportunity and access to space that is more accessible to startups. The price has come down a little bit, not as much as I would have liked to have liked it to. And then I also think that the market, in terms of our customer base has grown considerably over the last four years. So the interest in connecting assets and devices. Doing kind of Iot Internet of things, which is really just a fancy word for M to M machine to machine, which was termed in the 80s, which is just tracking assets around the world. It’s a it’s actually very simple concept. I think there’s more interest in that because operators of logistics systems, supply chains want to know where their assets are and want to do a better job of kind of improving operations, reducing environmental impact, reducing CO2 emissions. And then there’s a lot of interest in environmental monitoring, fire monitoring, covid vaccine monitoring to make sure they stay at the right temperature. So I think the pull on the demand side is actually growing and has grown since we started, which is awesome for us.

Speaker 2 [00:24:06] Sounds like you’re perfectly in the zeitgeist.

Speaker 4 [00:24:09] We’re lucky. We’re really, really lucky.

Speaker 2 [00:24:13] If I can if I can take a step back in time. A lot of kids say they want to be astronauts when they’re young, but you actually followed through. What inspired you to pursue that career? Starting from a very early age in Winnipeg?

Speaker 4 [00:24:26] My failed astronaut candidate, I did get an opportunity to apply, but didn’t make it all the way. Obviously know I was interested in space and astronomy and exploration and aviation when I was little. My dad was really into aerospace and had started his pilot’s license. So I think he was always inspiring us to look up and be curious about how planes and space worked and then just love looking out at the stars. And just like, where did we come from? Why are we here? Where are we going? Or these existential

Speaker 2 [00:24:56] questions?

Speaker 4 [00:24:57] Yeah, yeah. That kind of makes you want to explore. And then I think a key, pivotal moment for me was the opportunity to go to space camp when I was in grade eight in Quebec and got to just do all of the fun space camp. Things are simulated ISIS missions with EVAs and pretend we were astronauts, pretend we were Chris Hadfield. Go in the machine that spins around to see if you’ll get sick, which I think is just for kids, because they didn’t actually do that in the training. And that really just motivated me to pursue certain academic things, studying mechanical engineering and aerospace engineering and doing my pilot’s license and my scuba diving and trying to be in really good shape and, you know, checking all those kind of astronaut boxes. Then there was an opportunity to apply in 2017. And I was 30 and I was like, I’m not I don’t know, I’m not going to be an astronaut. But I was like, Sara, it’s your childhood dream. You have to apply. So I applied. And that was a pretty cool experience to participate in that as well.

Speaker 2 [00:25:55] So you did graduate studies in the states and we worked, I think, both at NASA’s Jet Propulsion Lab and Google X. A lot of Canadians similarly in the industry end up south of the border to seek out these opportunities. In your view, what can or should Canada do to actually foster a bigger domestic space center? And what would it have taken for you to have stayed in Canada?

Speaker 4 [00:26:16] I think for me, I wanted to have the opportunity to definitely study space. And that was more prominent at the University of Michigan, particularly with some of the coursework, and then eventually have an opportunity to go on to work at NASA. And that was kind of a personal goal, I think that continuing to invest in the educational opportunities, for example, having more aerospace specific programs, I think there was like an option when I went to the University of Manitoba, whereas Michigan has an entire aerospace department. So it’s quite a bit different scale and then continuing to grow out the professional opportunities as well, whether that’s more startups that are doing space work. And I know there are some fantastic startups like Kepler. I think it’s in Toronto that is doing connectivity with Los Altos as well. And there are many other startups pursuing the space and then having maybe bigger companies pursue opportunities to do aerospace work as well. Could be good career opportunities for individuals.

Speaker 2 [00:27:20] I’d like to turn to the question of innovation next and building on the dynamic of the partnership between commercial players and government players. There’s a lot of innovation that comes from the private sector. And you’ve mentioned you could move faster. There’s a lot more things happening in organizations like the CSA or NASA rely on these corporate partners to do what they do. But in your view, what limits, if any, do you see on the commercialization of space? And what’s that dividing line between private enterprise and the public interest?

Speaker 4 [00:27:51] Yeah, well, that’s a great question. I, I don’t really see any limits in the long term in terms of what the private sector can do. I mean, look at SpaceX. They’re doing what NASA has only been able to do for decades. So I think there are no limits. I do think that some of the regulation around the private sector can be stifling and slow the commercial sector down. And I think that the government has moved at a certain speed and the regulation has been acceptable for that speed. But the regulation is not necessarily acceptable for the speed at which small companies like Swarm or others can move. So I think a combination needs to be made for, oh, wow, these guys got funding one year and they’re going to launch nine months later. I actually think that naturally these private and public interests are very aligned because the private sector is generally providing services for the public, whether that’s connectivity or GPS or imaging. And I think that that alignment will eventually snap everything into place where, for example, the price of connectivity needs to come down because the public is only going to spend five dollars a month or one hundred dollars a month, depending on the type of service. I think as long as the companies are founded with a good intention, whether it’s, you know, communications or safety or reducing fires or whatever, I think that it is serving the public good.

Speaker 2 [00:29:21] I’d love to stay on this access to space angle a little bit because it’s still pretty expensive to put people up there think Virgin Galactic sells tickets for two hundred fifty thousand dollars each. It’s funny, my partner the other day told me that before he turns 40, he wants to go to space. And I’m like, well, at those prices, that means we can’t afford a house. But OK, do you think that space travel will be commonplace for non billionaires in five, 10, 15 years?

Speaker 4 [00:29:48] I don’t know. I think it’s it’s maybe it will be one of these, like throw things like people that like to jump out of planes or go skiing or these really like dangerous, expensive kind of. Why would you do that? Most people are thinking, I think it’s going to be in that category and it’ll be accessible for the wealthy and the pretty wealthy. I’m sure the price point will come down. Maybe it will become 50 K, which still seems like kind of insane to me. You know, a good good chunk of an annual salary. I think, you know, if you survey your friends and family, I’d say probably 80 percent of them don’t want to go. So I don’t think it’s going to be like a super tourism going to Europe type of thing that everybody wants to do in the summer. But I think it will be there for those that want it. I certainly wouldn’t go in the first hundred rides. I like to see the reliability statistics.

Speaker 2 [00:30:42] Yeah, let the other people test it out first.

Speaker 4 [00:30:44] Yeah. Yeah. I’m not know. I got a lot to do on Earth.

Speaker 2 [00:30:47] I have one final question I’d like to tap into your hopefully optimistic side a little bit. What is the one thing that you’d like Canadians to take away from this conversation and from your own experience and wisdom about what the possibilities for Canada are in space?

Speaker 4 [00:31:06] You know, I never thought that I would be able to go away for school and then I would be able to work at NASA and I would be able to work at Google and I would start a company and I would grow a team and put up satellites like this. Is this crazy life now compared to where I started and I think of all Canadians felt like, hey, I could build something, I could have an impact in this world, whether it’s in space or whatever they’re passionate about. There’s no barriers for me. And whatever my dream is of starting a company or starting a program or inspiring others, I can do that. I think that it would be incredible to see what all of those Canadians would accomplish. And I also think Canada is an amazing springboard. Like I have no student debt. That’s amazing. I have an amazing education. I had an amazing childhood. And I have amazing friends and family that are super supportive. So just be grateful that you’re from Canada. It’s a really, really special place and amazing educational and other opportunities. And, you know, don’t let anything get in your way. You never know what you can accomplish.

Speaker 2 [00:32:17] Be grateful and don’t let anybody get in your way. I love that. Sara, that is such an inspiring note to end on. Thank you so much for this conversation.

Speaker 4 [00:32:26] You’re welcome. This is really fun. Thank you.

Speaker 2 [00:32:28] My guest today has been the co-founder and CEO of Swarm Technologies, Dr Sara Spangelo. I’d also like to thank Mike Greenley MDA and Manon Larocque from the Canadian Space Agency. I’m trying to raise dough and this is Disruptors and RBC Podcast. Join us next time when we’ll talk to some of the leaders in Canada’s exploding telemedicine sector about why they think the future of health care services will be online. Talk to you soon.

Speaker 4 [00:32:59] Disruptors an RBC

Speaker 5 [00:33:00] podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service, it’s produced and recorded by Jar Audio for more disruptors, content like or subscribe wherever you get your podcasts and visit RBC Dotcom Slash Disruptors.

Speaker 1 [00:00:01] Hi, it’s John here,

Speaker 2 [00:00:02] along with Teresa from RBC Thought Leadership Team. John, can we do one of those recaps like they do on Netflix? Sure.

Speaker 1 [00:00:10] Unleash your creative spirit.

Speaker 2 [00:00:12] OK. Previously on Disruptors. I’ll do that one again.

Speaker 3 [00:00:18] Previously on Disruptors. There is no commerce without creativity. I’ve always

Speaker 2 [00:00:23] thought that creativity, imagination absolutely have to be embraced by the larger business community.

Speaker 1 [00:00:29] My view on creativity, how we teach in the business school is start by what’s the objective? What’s the purpose? What’s the thing we’re trying to do?

Speaker 5 [00:00:37] I don’t think that there’s any difference between creativity and argument. I see creativity as a form of argument.

Speaker 3 [00:00:42] I don’t think that someone’s created and they just they just wake up when the sun shines on them. I just don’t believe that’s how it works.

Speaker 2 [00:00:51] In the last episode, we started to make a case for creativity as the it skill of our time and for a renewed emphasis on creativity coming out of the pandemic. But now it’s time to dig deeper into the how

Speaker 1 [00:01:03] exactly how can we maximize our creative output as individuals, companies and as a country? And how can we weave creativity into the very fabric of Canadian culture from the classroom to the boardroom and beyond? This is Disruptors, an RBC podcast, I’m your host, John Stackhouse,

Speaker 2 [00:01:33] and I’m your co-host, Trinh Theresa Do, but please call me Theresa. Thanks for joining us for part two of our special series on creativity.

Speaker 1 [00:01:44] Once again, we have some scintillating guests lined up with really, really powerful insights to share about creativity and how to foster it. We’ll hear from Shopify, Ubisoft, Lululemon and more. But where better to begin than with a conversation about creativity in the classroom?

Speaker 2 [00:02:02] Our first guest is the head of a nonprofit focused on system change in education through what’s known as integrative thinking. It’s a concept born at the Wharton School of Management, and it’s all about using creativity to find the best possible solution to any problem.

Speaker 1 [00:02:18] Josie Fung is the executive director of I think at Rotman. And if you’re not too familiar with the Rotman School of Business, it’s certainly one of the leading business schools in Canada and among the best in the world. And it went through its own kind of creative revolution a number of years ago under a former dean, Roger Martin, who was able to transform the way management and business is taught in this country by really getting to the core of how we think. And Josie is now trying to take that a step further through the school system. She believes schools in Canada, right across the country, have had to narrow a view on creativity for way too long.

Speaker 4 [00:03:03] Historically, the education system, like the rest of us, probably put creativity in the bucket of artists. Certainly when I was growing up, that was the sense is that you went to art class to be creative. But now I think what the education is seeing is that students are amazingly creative and our job in the education system isn’t to make them more creative. It’s actually to keep their creativity alive. I have a three year old at home and what that means is like letting their imagination run wild. Something happens along the way between being three and being 18 years old, where you suddenly feel like you can’t be creative anymore. And so I think that’s what the education system is is trying to refocus itself on. About 10 years ago, Ontario came out with play based kindergarten, and I think that was a really big signal to the system to value. What does playing creativity mean? How do you infuse that into the education? We’re starting with kindergarten, but how do you actually infuse it throughout the system?

Speaker 2 [00:04:01] Josie, I mentioned integrative thinking right off the top, and it’s part of the guiding methodology for, I think, as well as the Rotman School. Could you explain what it is for those who aren’t familiar and why it’s so important,

Speaker 4 [00:04:13] so integrative thinking? Is this idea developed by Roger Martin, who said, when you’re stuck in a place where you trying to make a decision, you could go down path A or you could go down path B.. Conventionally, we feel like our job is to simply choose between the two. But what if instead we didn’t think of ourselves as as needing to choose but to actually our job is to actually create to create a new and better idea that is created from elements of both Path A and from Path B. And on a practical level, what that means is the recognition that there is no one way to do things and that our job is actually to be constantly searching for new ways to approach the problems that we’re constantly facing.

Speaker 1 [00:04:55] So if integrative thinking is, as Roger himself says, a creative act, how can we ensure students maintain that creative mindset as they enter the workforce and are faced with, frankly, some of the constraints that can come with the corporate world

Speaker 4 [00:05:11] when it comes to creativity? In our experience, what we’ve seen is creativity is actually thrives on constraints. And the key is actually the mindset of thinking what your job is. The best way we can foster young people to be thinking about their rule is being creative and imaginative. To create new ideas is to ask them instead of asking, are you doing the job you’re being told to do, or are you solving the problems that we need to solve in the world? Instead of thinking smaller, we actually need to be thinking bigger. When we started our work with I think we thought that if we gave students kind of open reign on creating ideas, that would be the way for it. And what we actually heard is that by giving a little more structure, by giving a few more constraints, it actually helped channeled their creativity.

Speaker 2 [00:06:00] If I can ask you to step back, Josie, and look at the big picture, when you think about the broader world and Canada’s place in it, how do we compare to other nations when it comes to creativity?

Speaker 4 [00:06:11] I think Canada’s up there, but I think we have some choices ahead of us. If we don’t act carefully, what makes us be really successful and have a lot of potential for being high on that creativity index is our diversity in a given classroom. Sometimes we have as many as 21 different languages being spoken in that classroom. Just imagine the number of experiences these students have, the perspectives they have, the experiences that they’ve drawn from their families, the more we can bring that. Around the table, the more we have the opportunity to create new and amazing ideas, I think that future capital is a place where there’s a hub of innovation. And instead of thinking about tech and innovation hubs being localized in one geography, it’s a nation of creativity. It’s a nation that generates all sorts of ideas that fuel the world,

Speaker 1 [00:07:03] ideas that fuel the world. You know, for an energy power like Canada, maybe we can also be a creative energy power. It’s an inspiring vision, Teresa.

Speaker 2 [00:07:13] Absolutely, John. But, you know, there are sectors where Canadian creativity is already fueling the world, like the animation industry. And that’s thanks in large part to one school in particular. Found it right here in Ontario in nineteen sixty seven.

Speaker 1 [00:07:27] If you’re a fan of Toy Story and who isn’t, you can find the roots for many of Hollywood’s greatest animation productions over the last generation. Right here in Canada, Sheridan College has been called the Harvard of Animation Schools, with grads going on to key roles at companies like Pixar, Disney and DreamWorks. We had a chance to chat with Sheraton’s President Janet Morrisson and began by asking her how she defines creativity.

Speaker 5 [00:07:54] From my vantage point, it’s a way of thinking. It’s a way of problem solving, a way of contemplating ideas, alternatives, possibilities, all to the purpose of moving the world forward. As I think about it, it really enables people to experiment and drive, change, even, frankly, when knowledge runs out. And the really cool thing about creativity is that it’s an unlimited resource. It’s constantly renewed and it can be improved upon through education, experience and stimulation. So so I think regardless of how you define it, it’s increasingly acknowledged as fundamental to the planet’s social, political and economic future.

Speaker 2 [00:08:37] Jennet is creativity something students have to have when they walk in the door on that very first day of class? Or can it be taught?

Speaker 5 [00:08:45] I think creativity can be innate to some. For others, though, my experience has really affirmed that it can be learned and that can happen through formal educational environments or through curation and lived experience. You can really honestly teach creative problem solving and human centered design, for example, that at the end of the day help people confront complex issues and the challenges they’ll inevitably face regardless of their profession.

Speaker 1 [00:09:15] How do we take advantage of this moment? The frenzy of change and adaptation caused by the pandemic to put a renewed focus on creativity?

Speaker 5 [00:09:24] Well, as the world around us is being disrupted, educators, me included, really need to evolve our programing and our curriculum, which is what we teach and our pedagogy, which is how we teach it to cultivate or curate creativity and innovation, because I think there’s a crisis of innovation in the world right now. And if we assume that creativity is foundational to that, it makes that imperative all the more clear. The key piece that I’m always mindful of is that creativity rests on ideation and distillation and so really encouraging yourself to think freely outside of the box, blue skying, some people like to say, and then working diligently to distill, iterate and ultimately prototype depending on what the process is.

Speaker 1 [00:10:21] You can’t have a conversation about creativity and innovation in Canada without talking about this next company in 2004, it was a startup that sold snowboards online today by Market Cap, its Canada’s most valuable company, an e-commerce platform. The powers, more than one million businesses across a hundred and seventy five countries.

Speaker 2 [00:10:44] And we’re talking, of course, about one of Canada’s great success stories, Shopify. And part of the reason it’s been so successful is its ability to scout and hire smart, creative people. Brittany Forsyth is Shopify as outgoing chief talent officer. Brittany, welcome to Disruptors.

Speaker 5 [00:11:00] Thanks for having me.

Speaker 2 [00:11:02] Shopify has been called one of Canada’s most innovative companies. What’s the relationship between creativity and innovation?

Speaker 5 [00:11:10] Creativity is the space in which you play, and I think innovation is the outcome that results from the creativity, actions or effort that gets put in. When I think about creativity, I think about it being the environment that you create. I think about the behaviors and beliefs that one holds. And I think the innovation, like I said, is the outcome. It’s a measurement of how creative you’ve been able to be and how bold you are in the execution of it. What I love about the creative space that we’ve formed in Shopify is that we have built an environment that allows for risk taking, that allows for curiosity and resourcefulness, that allows for reactions, because generally when you’re being creative, you’re removing constraints, you’re removing the barriers that sometimes hold us all in to just repeat and do the same thing over and over again. And with all of that comes a lot of failures as well. But I think that’s en route to innovation.

Speaker 1 [00:12:03] I wonder, Brittney, about the key characteristics of creatives, the ways in which you measure a person’s creative capacity. What qualities do you look for in potential employees?

Speaker 5 [00:12:15] Curiosity is foundational. The ability to acquire information and get curious and actually build zeitgeist knowledge. So to look for information that’s going to challenge you, that’s outside of all of our echo chambers or bubbles to really challenge us and to think anew is really, really critical to be able to then imagine a future that’s different than what is. We also look for people that have a past track record of being curious and impactful and thinking outside the box. And I would say the third point is probably just a growth mindset. So a constant learner, someone that is able to give themself permission to wake up smarter every day. Once again, they’re challenging themselves. They’re looking for information that’s going to teach them something new. They’re looking always at the awareness of what they know and what is the underlying assumptions that are driving things and challenging that to drive it forward.

Speaker 2 [00:13:13] Once you find these people, you bring them in. How do you develop them? How do you empower them to continue to grow and learn and contribute back to the company?

Speaker 5 [00:13:22] I think it starts with giving permission. It’s about telling everyone who’s joining you’re going to fail and what does it mean to fail? And it’s actually OK to as long as you don’t make the same mistake twice or over and over again, it actually then allows for learning and growth. And so we talk a lot about these mental models early on. We educate a lot about them, and we give permission to do these key things, such as experiment, fail, grow. It’s OK to say you were wrong yesterday and you’re right today to change your mind. And we create a permission, but a psychological safety around that to say, OK, this is going to happen in the environment. And more importantly than just saying it actually is the fact that we do this so many people and so many companies can say it and onboarding. They actually, I think too often lean too far to aspirational like values, culture, values or beliefs. And then after they say that, you walk into them real life of a company and it all falls short because no one’s actually living it. So on morning, we talk a lot about it. We give permission. But then once you’re in the Itoh Shopify, we do things such as Happy Days and we’ve had numerous hack day projects become like critical builds of Shopify. And the cool part about it is, had we not created this space for experimentation, for anyone to come up with the best solution, we would have never had these. And so you need to create opportunities for everyone to raise their hand and say, I have this great idea and not just shut it down right away.

Speaker 1 [00:14:53] Brittny, you’ve been at Shopify eleven years and hard to imagine back then it only had a staff of twenty people. You’ve witnessed explosive growth. I’d love to know more about how you’ve been able to maintain the startup mindset and culture and not get too comfortable or complacent.

Speaker 5 [00:15:10] Yeah, I mean, and so my story is unique. I’ve been on the exact team for about five years now in this role, but I have done many other things and actually led to. All the way through, and so the reason why I highlight that is not like to talk with the title. It’s actually the fact that I was the most unlikely, unorthodox person that should have been in that role. And one of the things that was said to me was like, your lack of doing that means we’re going to solve in a new way. And I think that’s a key to creativity and unorthodox is to challenge the status quo. And don’t get me wrong, I’m still surrounding myself with people that have done it. I like seek advice. I have a great network of people and amazing mentors. But I think that that naive ness at time or the lack of the scar tissue or the experience actually drives a new solution that maybe wasn’t possible. And I think that in the company by zoom it out for me, the fact that we have the growth mindset, we hire for people that are able to learn, we don’t just hire people that can do the job today, allows for more growth opportunities and allows for us to take chances on high potential people, which also drives new solutions and thinking outside the box. And so I always say we hire teachers and students. Each person is a teacher and a student, but it’s bringing in the right new teachers and the right students that can advocate and challenge each other. The best thing about Shopify hands down is the people who you work with, how much they’re going to challenge you, how much you will learn from each other and drive yourself and everyone else around you further as a result of it.

Speaker 2 [00:16:43] My last question for you, Brittney, if I can ask you to zoom out even further, which countries would you consider to be the most creative in the world and where does Canada stand among them?

Speaker 5 [00:16:53] Oh, that’s such an interesting question. I think each country has its assets to what would drive towards creativity. And I guess I’ve seen this firsthand with the founder, Tobi being German. He brings a lot of the German culture, such as direct feedback, challenging opinions right off the bat. And I have a very Canadian culture, which is like I like to give a lot of praise and then speak in the the criticism. And so there’s I mean, these are obviously stereotypes. So like take this with caution. But I think Canada has all the potential in the world and I think a lot of great things are going to come from it. And I think it’s about getting just more and more cultures and backgrounds into that because we are very diverse. So I think it’s all about inclusion of bringing more and more together.

Speaker 2 [00:17:40] What an uplifting note for us to end this conversation on Britney. Thank you so much for your time today and for joining disrupters.

Speaker 5 [00:17:47] Really appreciate it.

Speaker 2 [00:17:49] We should mention shortly after we recorded this interview, Britney announced she’s moving on from Shopify. But that doesn’t diminish what she told us about culture and diversity as a fuel for creativity. And it’s no coincidence Canada’s cultural mosaic is also part of the origin story for the next company. We’re going to talk about

Speaker 1 [00:18:07] as if it needs any introduction. Lululemon is a world famous athletic apparel and wellness brand. But, you know, it started out as a part time yoga studio in Vancouver’s Kitsilano neighborhood to this day. The company calls itself yoga inspired.

Speaker 2 [00:18:24] But where does creativity come into play and how is it fostered? To find out. We sat down with Tom Waller, Lululemon, senior vice president for Advanced Innovation and chief science officer. Tom, welcome to disruptors.

Speaker 3 [00:18:38] Thank you. It’s really a great pleasure to be here.

Speaker 2 [00:18:40] So Lululemon is a fitness and it’s a wellness company, but we’re talking about creativity today. So I’m curious, how would you define creativity within the context of what you do?

Speaker 3 [00:18:51] Well, creativity always needs an input into my job and within the company that I work for. What we have focused on is ensuring that we have a space, a platform that allows us to consider that we’re not done yet. I’ve brought a multidisciplinary scientific focus, which we call the science of field. And the science field physiologist becomes now a jumping off point for every category, product service experience that we might want to create. We think about how can we really engineer the sensory experience and facilitate a new kind of human connection? And can we do that in such a way that we can predict a successful outcome? And so maybe that, as you might, a set of constraints on it and it seems to accelerate creativity. It’s not creativity, craft, creativity, sake, it’s creativity around a really specific set of problems that we think we’re uniquely qualified to solve.

Speaker 2 [00:19:48] I’m very interested in that experiential aspect that you mentioned, and I’m hoping you can walk us through that journey because it sounds like creativity was woven into the DNA of the company from the very beginning. But how did that play out?

Speaker 3 [00:20:03] Yeah, I mean, I was full disclosure, I was absolutely attracted to Lululemon because of one very specific thing, which was the innovation was everywhere. It didn’t feel like it was something that they needed to add. It was something that they needed to amplify. They had a tolerance for ambiguity that was just. Palpably different. Very, very unique, and so the opportunity that I saw was to create a new way of extracting that innovation or that innovative capability. The important thing that we had to do was to not get too good at being Lululemon, to not get stuck in that identity that others would start to describe. And we would like it when when we got the kind of offers of recognition that we were having an impact in the world. And and as we got defined by observers and third parties, whether that’s Wall Street or media, it was important that we didn’t start to believe that that hype, that what was really important, it was that we believed in our vision, which was, you know, our impact on on just wellbeing as a holistic access point for all people deserve.

Speaker 1 [00:21:11] I want to go back to something you said about the science of feel. I love the emphasis on feel. And I think it’s a concept that resonates with us so much more now thanks to the pandemic when we don’t have to dress up and go out to the office. In your experience, Tom, what role do crises like Colvard play in fueling creativity?

Speaker 3 [00:21:32] These are big questions. A lot of a lot of incredible things are forged on the crisis. A lot of amazing inventions formed on the crisis. So I think that crisis is one of the greatest opportunities to apply creativity. I think that not all of us have necessarily have the gift of space this last year. I think so many of us have had to focus on security of all of our livelihoods of businesses. So, yeah, I mean, I take great pride in the in the reality that I have been able to spend time looking at this situation and acknowledging that this is a time to be creative, because those of us that create now really do have a different level of influence in the future that unfolds. I think the fact that it’s been a health crisis is really interesting because we’ve all had a brush with mortality. We’ve all really assessed our values and what our daily lives look like because they’ve got a little bit smaller. So the adjacencies of those things and the experiences that we have are now not separated by travel or trips or massively different context of the different spaces and places that we choose to visit. So we’re able to really scrutinize what matters.

Speaker 2 [00:22:59] So coming out of the pandemic, looking at the years and decades ahead, how do other companies and business leaders need to think about creativity? What would your advice to them be?

Speaker 3 [00:23:09] I think the most important thing is to be able to back off a little bit from the business model and and look a little harder at the purpose of the business model encourages us not to change the purpose, encourages us to change. So for any company looking at themselves, it’s being able to tease out what are the primary assets that that could be applied in in in more ways than the business model might suggest. Whenever we start anything new, it’s making sure that we don’t compare it to something that’s mature. Let’s say if we wanted to start a new category, we’re looking for a rate of change in that category. We need to compare that to the same time that an equivalent category was also at that stage. And so we compare rate of change to rate of change, not rate of change to maturity. And I think it’s one of the difficult things of being an innovator or taking that creative step is the comparisons. And if comparison is so often the thief of joy, the challenge that we face is that we are likely to squash new, small things in favor of the big safe things. But it’s the new, small, risky stuff that is an exploration of maybe a reapplying the assets in a new way that will probably, probably is the next. So you just got to measure it differently. There’s no one size fits all. Apparently there’s no silver bullet or magic formula. Every company has its beginnings. There is the beginnings of a lot of the really valuable things to mine and understand and recontextualize, which means that every company has a different set of metrics that they should look at as to how they know how to grow into new potential successes.

Speaker 2 [00:24:52] Tom, I have one last big question to ask. In your opinion, what are the most creative countries in the world and where do you think Canada ranks among them?

Speaker 3 [00:25:02] I think that Canada has a history of really impressive creativity. I came here not just because of Lululemon, because I could I could see something in Canada, I could see something in it its potential as a place to be creative, a place to innovate. So I think Canada ranks. Very high in potential, and wouldn’t it be a shame if we don’t fulfill that?

Speaker 1 [00:25:35] Our next guest is from what might just be the biggest creative industry of all, as we learned during our episode about EA Sports back in January, the video game sector has now eclipsed the movie and music businesses combined,

Speaker 2 [00:25:50] as Julianne Laferriere is the producer of Assassin’s Creed Valhalla at Ubisoft Montreal. It’s the latest title in a blockbuster franchise that spans centuries of civilization, weaving together history, myth, music and more. We asked him how he views the daunting task of managing an entire team of creatives.

Speaker 3 [00:26:12] I think conductor is a good metaphor for another one I really like is the skipper of a boat, because when you’re on a boat, you know, you’re a crew, you know your boat, you know where you’re heading, you know, hopefully. But you never control the weather. You don’t control the waves. You don’t control the wind. So there’s a lot of improvization, you know, there’s a lot of things that you have to react to the environment that you’re in. And this is what a game producer has to do. You know, you’re wandering in the great unknown because there’s a lot of things that you don’t know when you’re you’re starting your journey and you have to be quick on your feet to react and also, you know, inspire your team to reach this fabled shores that you’re all aiming for. You have to hope for the best and plan for the worst. You have to be and a risk management mindset of what can go wrong. And if it goes wrong, what’s what’s mine, what’s my strategy? What’s my game plan? You know, the road ahead is not charted. So you have to chart that road by, you know, trial and error, trying some things, making mistakes, and then, you know, learning from those mistakes and moving forward. And that’s that’s for me, that’s what’s important because it is pure creativity.

Speaker 1 [00:27:27] Remember, at the start of the series, we opened with a clip of Richard Florida calling creativity the skill that matters. Well, that was just one snippet of a much larger conversation. And we’d like to share it with you now because it’s a perfect way to wrap things up.

Speaker 2 [00:27:44] Richard is a noted urban studies theorist, best known for his book The Rise of the Creative Class, published in 2002. So we figured a good place to begin our chat was to ask him how attitudes toward creativity have changed since then.

Speaker 3 [00:27:57] Well, it’s funny. I feel like it’s it’s come full circle. If you look back at the criticism of the book, it was, you know, creativity doesn’t really matter and talent doesn’t really matter. What’s happened is that now, two decades later, all of that has been reversed. Creativity is more valued than ever before. You see it now when you talk to business leaders, you see it now. When you talk to community leaders, it’s the skill that matters. I remember looking at LinkedIn a few years ago, and it was the number one skill you had to have was creativity. And moreover, when you look at how communities compete, people are working from home. And communities around North America in the world are competing for talent. You know, to be honest, I wouldn’t have predicted this. I think if anything, I was hopeful. But yeah, yeah, it seems to have become kind of the norm. What was once the U.S. has now become the norm.

Speaker 1 [00:28:52] One thing I’m wrestling with, Richard, is our need to be together to fuel creativity. The pandemic has disrupted our ability to mingle, and mingling is kind of a jet fuel for creativity. How do you square the isolation that we’ve all experienced and maybe getting used to with the need to commingle to be creative?

Speaker 3 [00:29:13] What’s interesting, John, is in a nearly 40 year career as an academic, not once have I ever encountered the role of pandemics or infectious disease in abating the tide of urbanization. If you look back at history and certainly the past couple of centuries, the arc of urbanization has just gone straight upward. That tells me something that the force of people mingling, the force of density, the force of people forging, community clustering because clustering and creativity, these two things go together. And they’re not just about arts and culture and bohemianism. They are the basic motor force of economic growth. That force has powered human societies advance and culture in innovation and economics for all of time. Cities will survive. They will be fine. Even New York City, which was proclaimed dead back in March, is now seeing record sales of condominiums. Again, what I think is going to happen is that instead of going to an office and plugging your laptop into a cubicle, that the city or neighborhood will become more of what the office used to be. So your day at the office will be more like maybe you go two times a week, but it’ll be more like a local business trip where instead of just going and sitting in an office space, you’ll go to meetings, you’ll meet with colleagues to grab a coffee with friends. So I actually think this sense of commingling in getting together and density and social interaction will become more important, not let we spending less time in an office isolated and more time in our communities, our business community, our innovation communities, our ecosystems, mingling and getting together and getting stuff done.

Speaker 2 [00:30:49] Working remotely does bring challenges, as most of us have learned over the past year. Do you see the quality of creativity being reduced as a result of our increasingly virtual world? And how do companies and communities ensure that creativity stays in the spotlight in the future?

Speaker 3 [00:31:06] Well, I think for these community is really the big question is how do you build remote work ecosystems? It’s something I’m working on in my consulting. And I think what we’re looking at is not a place where remote workers all work isolated in their homes. I think we’re talking about new kinds of communities, still the third places in coffee shops and coworking spaces where remote workers mix and mingle. Going back to the 1920s after the Spanish flu, the emergence of Greenwich Village as an artistic and creative center occurred after the Spanish flu because creative Laucke there for this kind of density. I think now we’re finding that you can create a kind of analog to that in smaller communities. I certainly see it when I travel, when I travel before the pandemic. Creatives need a combination of interaction and isolation. This is why creative people like to be there, not extroverts. They don’t need human contact to be stimulated. Creative people are high in introversion. They need a lot of isolation. They did a lot of crime alone. They need a lot of time without interruption and disruption. But at certain times they want energy. They want other human energy. They want somebody to bounce an idea. If they want to go get a coffee, they want to go to a bike to for a bike ride or walk into Rabin to recharge their energy. So there’s a lot of stimulation creative people get for the natural environment. And if you tell them to report to the office and strap on a suit, they’re going to say. We’re going to go to a place that and I think what I’m seeing among high performance organization and high tech companies in the state’s leading edge companies here saying we’re going to allow people to work remotely who want to. And at the same time, we’re going to build spectacular office facilities. I mean, the Office of the Future, I’ve been working on this. You know, wellness space is meditation spaces, outdoor spaces to me, you know, coworking spaces and conference spaces, the likes of which we haven’t seen. I think the office becomes a perk as well and quite experiential, no longer a place just to work. I think this is the big change. The big change in the pandemic is the way people work. And they’re not going to back this old way, this old industrial age idea that people go to an office at night and come back and five is over for those who have the privilege, the skill and the privilege and the talent to demand that, that’s what we’ve got to really start to think about.

Speaker 1 [00:33:20] Well, we have no shortage of things to think about after that incredible flood of insights that have been shared with us during these conversations. Our thanks to Richard Florida and all our guests for joining us on this deep dove into creativity. Teresa, I wonder what stands out for you the most from everything we’ve heard?

Speaker 2 [00:33:39] John, I loved our conversation with Shopify as Brittany Forsyth. The notion of creativity will abound. If you have the right people in place, people who are able to learn, not just people who can do the job today and people who are able to challenge each other and learn from each other and drive each other for. That was really inspiring. What about you?

Speaker 1 [00:34:01] I’m taking a lot of notes from the educators we heard from. You think of shared in college, celebrated globally for all it’s done over the decades with animation. But you find the same creative juices at play in all of its programs, from phys ed to skilled trades, where creativity really is the jet fuel of skills for the years ahead.

Speaker 2 [00:34:22] Yeah, it’s so interesting to see the journey of creativity from the classroom to the workplace. And I want to touch a little bit on our conversation with Tom Waller from Lululemon, who hones in on the strategic elements of creativity, which is not for creativity sake, but for the set of problems that you’re trying to solve that a company or a group of people are uniquely qualified to solve. And that’s centering around the problem and understanding what the objective you have in mind is. Also reminds me of our conversation last time with a jackal from the Creative Destruction Lab.

Speaker 1 [00:34:59] Yeah, we heard pretty much from every guest that creativity is a team sport, if you will. You need to bring together a lot of people and diverse groups of people if you want to really be creative in this kind of world and this kind of economy. And it’s going to be even more challenging. But maybe in other ways it will take off in the years ahead when we’re all going to explore different ways of working with hybrid models, where we’ll be working probably a bit remotely and a lot together in different ways in the years ahead. And I was really struck by some of the comments that, Richard, Florida is a great student of creativity and author about creativity, shared with us at the end, going back to the 1920s, the roaring 20s, when communities like Greenwich Village really thrived as people clustered together to take advantage of new technologies. You just think of how radio and television were taking off in the 1920s that fueled a whole new creative age. The 20s, the second roaring 20s can be equally creative, with people still coming together in the Greenwich villages of this century to collaborate to share ideas with diverse groups of people and to challenge each other to solve the epic problems that are right in front of us. We’re going to need a whole lot more creativity in the years ahead. And it was great to hear from such a diversity of Canadian organizations that are ready and set to take on this new creative age.

Speaker 2 [00:36:38] It’s a new era, the soaring twenties. I love it.

Speaker 1 [00:36:41] The soaring 20s that’s yours to retire,

Speaker 2 [00:36:44] consider it officially coined. And John, keep in mind, this podcast is just a companion piece to our much larger research hub on creativity, which will be online at RBC Dotcom Slash Thought Leadership once it launches in early May.

Speaker 1 [00:36:57] It’s an incredible resource and I’m so proud of the team for all the work that’s gone into it. I hope those of you listening to the series find it as valuable as I did and that whatever you’re doing today, that you make it creative. I’m John Stackhouse

Speaker 2 [00:37:10] and I’m trained. Teresa Doe, this is Disruptors and RBC Podcast. Thanks so much for joining us. Bye for now.

Speaker 5 [00:37:23] Disruptors and RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service, it’s produced and recorded by Jar Audio for more disruptors, content like or subscribe wherever you get your podcasts and visit RBC Dotcom Slash Disrupters.

[00:00:02] Hi, is John here, I have a question for you, do you drive an electric vehicle? Yeah, probably not.

[00:00:12] You know, rarely a week goes by without another big announcement about the switch to EVs, GM, Jaguar, Volvo, they’re all aiming to be largely or entirely electric by the mid 30s. And more and more cities like Tokyo and Montreal say they’re not going to allow anything else on their roads. And here in Canada and EV battery supply chain just moved one step closer to reality thanks to a partnership between Ottawa, Quebec and Lille or Lyon Electric. To build a one hundred and eighty five dollars million battery factory north of Montreal is centered around. A new report from RBC Leadership Group predicts EVs will make up one quarter of all new vehicle sales by the end of this decade. But right now, when it comes to drivers, the U-turn lane is awfully empty, with global sales sitting at just four percent. So what do we need to change that? And what role can Canada play? It’s one of the biggest opportunities and challenges in the decade ahead. Here’s why. Joe Biden has already declared he wants to reengineer North America’s supply chains, and he’s promising the whole federal fleet will be made up of zero emission vehicles. If we get game, we can build more factories of the future and all the technology that goes into a supply chain, especially the beating heart of an SUV, the battery.

[00:01:46] This is Disruptors and RBC podcast, I’m your host, John Stackhouse. We’re going to speak with one of the big three automakers, General Motors, in the second half of today’s episode, so I hope you’ll stick around for that. But my first guests have spent a lot of time thinking about the opportunities the EV revolution represents for Canada and about the speed bumps we might run into on the road to a fully electrified future. It’s my pleasure to introduce Sarah, the CEO of Propulsion Quebec, and Konstantin Amitav, the CEO of Ottawa based G Batteries. Welcome, both of you to disruptors. Thank you. Pleasure to be here, Jim. Maybe we can start with your back story.

[00:02:35] Sarah, let’s let’s start with you. What is propulsion Quebec all about? How did it begin and what are its goals?

[00:02:42] Well, it all started in 2017. That was really at the initiative of the government of Quebec. We thought that there was such great potential for the development of the electric and smart transportation industry in Quebec that we should be investing in a nonprofit organization whose mission would really only be to accelerate the growth of the industry in the form of a cluster where you have the companies that are manufacturing products, working with the clients, the fleet operators, for example, the whole ecosystem coming together to really grow the industry and make it a larger contributor to the province GDP and province economy. So that all started about four years ago. Since then, we gathered two hundred and fourteen members that are mostly companies working in five different subsector. So we have companies that are manufacturing electric vehicles in Quebec. We do not manufacture passenger cars. We manufacture everything else electric bikes, electric trucks, electric and specialized vehicles for garbage, for example. Then we have companies that are manufacturing, charging infrastructures or operating networks. We have manufacturers of components for connected, smart, autonomous vehicles. Same thing for smart infrastructure. And finally, we have members that are offering services in the new economy for mobility. So car sharing, car pooling, bike sharing, that kind of thing.

[00:04:15] I can see why you call it propulsion, because it’s it’s not about the vehicles. It’s about getting people and things from one place to another, which requires propulsion and propulsion, requires energy. And one of the best sources of energy we have in this country is electricity, and that’s stored in batteries. Konstantin, give us a bit of background on batteries. What what’s it all about?

[00:04:39] Yeah, absolutely. So we developed a solution that enables us to charge lithium ion batteries much faster than any conventional way, publicly known today without damaging the bathrooms. So in other words, we have developed a software based solution powered by machine learning that enables us to improve performance of lithium ion batteries that already exists on the market today.

[00:05:02] By means of software and our story, we have thought hard of what would be the simplest way we as a society can change but have a huge impact on greenhouse gas emissions. And we determined that. We realized that the simplest way for us is to switch from internal combustion engines to electrical vehicles. First of all, from the driver or user perspective, nothing really changes. You still go from point A to point B, you still perhaps may be enjoying the electrical car more than internal combustion vehicle. While you’re not changing your diet, your exercise routine, you don’t need to do anything special. You just get into your car and you’re still driving while you’re able to reduce greenhouse gas emissions by a third around the planet. So that’s what’s driving us. What’s driving us, still driving us. And that’s what we want to do, is to accelerate the adoption of electric vehicles by enabling them to charge as fast as it takes to fill up a tank of gas.

[00:06:01] I feel like I’ve heard about electric vehicles all of all of my life. And yet, as I said in the introduction, we’re still feels like an early days, four percent of global fleets. If that’s so, I wonder if you can give us your sense of how advanced we are. What’s the what’s the reality versus the hope in this field?

[00:06:20] Well, there’s really two different answers to your question. There’s personal transportation with cars and there’s all other types of vehicles for cars. We have gone from a early adopter emerging market to the more mature, I would say, market where all manufacturers have announced and EV model. So really we have access to different kinds of models. And I’m really talking about Québec here. We have great access to a public charging network. I myself almost answered your question at the beginning, like. A person who drives an electric vehicle, I’ve tried all different kinds of models, I’ve traveled in all types of climatic conditions, have done pretty much all types of journey that you can think of.

[00:07:12] And really, it’s it’s exactly, as I said mentioned, it’s just more fun. And it’s the same. I mean, you just have to take a break sometimes to charge. But the technology is evolving very fast for fast charging. And so really, we are we are now in a very mature, much more mature market and other types of vehicles. We are still in the R&D trial state. Some of them are already on our roads. Like busses, for example, are much more advanced than transportation of goods, types of products. So it’s we are getting there. We’re sort of following the same track that we are seeing for cars, but with a little lag.

[00:07:50] But that’s very common in innovation, that industrial applications tend to be much more advanced and consumer applications. There’s all sorts of economic reasons for that. So maybe that logic is just plain playing out here and we’ll see that curve accelerate with time.

[00:08:06] And I would add that because I think the podcast is probably followed by a lot of people that are interested in investing and things like that. I think this is a very sweet spot for investment in industrial applications for EVs because it’s at an early stage. But we are really seeing the same type of adoption that we are seeing in the B2C market. I think it’s a great spot for investment.

[00:08:27] Well, it’s a bit like the computer industrial computers were fairly well advanced. They seem ancient now, but in the 60s and 70s and then the personal computer took off in the 80s in a whole new opportunity emerged with that because one of one of the barriers to that application is, is battery and battery storage, as you explained in your introduction to batteries. And it feels like we’ve been wrestling with the battery question in this country also for four decades. Where are we at on that journey? Are we closer to the end of in terms of having great battery experiences for consumers or are we still in the early days?

[00:09:10] I think just like Sara mentioned, the number of applications between industrial and the personal usage of the vehicles. So I feel that Vikas the consumer cars, we are already at the level of comfort zone, especially if you start looking at Tesla like vehicles, the amount of range that you can get there, a number of kilometers that you can get out of the car on the fuel charge, on a Tesla car. It’s probably already more than what we had as a family when we arrived at Kennedy. Ninety nine, when we bought a brand new Toyota Corolla on a full tank of gas. So you already have a pretty good range of, let’s say, three to four hundred kilometers from a charge that’s more than enough to get you around town, as one of my investors often jokes, because it takes me seconds to charge my car. I says, how do you do it? So when I drive into my garage, it takes about twenty seconds to plug in my car and I go home and I sleep. When I wake up in the morning, it’s charged. So from that perspective, 90 percent of electrical vehicle car owners have a luxury of charging their cars at home. They don’t even want to think about charging stations or gas stations. They charge at home and they go in there. Are they? There’s a range of sight in their head. But once you get into electrical vehicle, once you get around the dynamics of charging and the schedule, most of the time you are OK.

[00:11:58] It’s an amazing race, if I can use that expression in terms of these technologies and of course, every country in the world seems to be in the race and number of countries with terrific tech ecosystems, including the U.S., right next door. What do you both think we have as Canadians that’s going to help us stay at the front of the pack in that race to the next generation of technology?

[00:12:21] Maybe. Maybe I can go first. I’ll speak for Quebec, because this is really my level of expertize. First, we have a long tradition of inventing new types of vehicles. And we also have had Hydro-Quebec for seventy five years. We have deposited lots of patents for batteries, for example.

[00:12:39] So really we have this expertize and this is also present in other in Nova Scotia for batteries in Ontario as well. I mean, there is lots of expertize in this country very specialized and highly targeted on innovation. The other thing that’s super important is that we have these strategic and critical minerals for batteries in Quebec. We have lithium, graphite, a little bit of nickel and cobalt, and there’s a lot of nickel as well in Ontario. So these are very strategic, I would even say geopolitically in terms of energy security, because just like Asia and Europe, North America will have to build some kind of continental autonomy for the supply of batteries for electric vehicles.

[00:13:26] We’ve just published a really interesting report, it RBC on the supply chain revolution that’s just starting in North America. It extends across a number of advanced technologies. But everything you say rings true because we have almost historic opportunity to create new elements of those new supply chains for the vehicles of the future and our rare minerals, our natural resources, as well as our our technology and our ability to manufacture and assemble really strong assets for the country. One of the things we’ve discovered in our research is the important ESG value on the rare minerals side that we need to, I think, advocate more as a country, the way we extract and develop and process those minerals that you mentioned, including indigenous ownership, including environmental standards that can and will continue to be improved but are better than most jurisdictions in the same business are important assets for us.

[00:14:31] Absolutely. And I would add that not only is it sustainable, but it is secure and it is stable. We are working at the Boston Globe with the Global Battery Alliance to develop a traceability pilot project so that you could literally scan bar code on your batteries and see where everything is coming from. So really, we could not only sort of claim that it is an easy product, but we could even trace it and prove it.

[00:15:00] In a way, that’s a great sales pitch. But you’re in some ways the customer or the intermediary, you have to put those inputs to to work through through batteries. And presumably you could do that in a number of jurisdictions. Why? Why Canada?

[00:15:15] Canada is one of the leaders in the mining industry for oil and gas, which can be translated over to mining any other rare earth metals or minerals. But on top, if you talk specifically about batteries, it takes roughly about seven to eight units of energy to build one unit of energy of Bathory. So for one kilowatt hour of battery, you need roughly about seven or eight kilowatts of energy.

[00:15:42] And a big question that the world usually asks is where is the energy coming from? Are you burning coal? Like, what are you doing is renewable or if it’s not, is the batteries actually what Sara was talking about versus coming from like is the battery is actually as green as we’re talking about. So Canada has this fantastic resource, which is hydro electricity, which is as green as it gets. We have an excess of this electricity in Canada, so we are able to build a lot of the greenest batteries. Is the local supply of materials at potentially lower cost? Canada is absolutely phenomenal place for. I might be a bit biased because our company and what we can do with the technology, but there is Hydro-Quebec, there’s our companies, there’s many battery companies in Canada that are taking the technology to the next level. It’s not just about taking the minerals, relatively inexpensive electricity, combining them together. If we can spice it up, because the technologies that we have, the technologies that Canadians have developed, Canada can become a leader in battery production and manufacturing.

[00:16:47] But that’s a great vision for what we can be. Konstantine, what’s holding us back? Because when we look at the investment landscape, Canada does have a lot of an enormous number of strengths. But we also don’t win as much investment, especially in emerging sectors, as we might like. What are some of the challenges we need to come to grips with to up our game?

[00:17:10] To be honest about this. You’re having this discussion quite often and we can’t quite pinpoint why don’t we have Gigafactory in Canada? We feel that it’s just a matter of months or years to come before a big player is going to enter this market.

[00:17:26] You mean like a Tesla Gigafactory, like Tesla Gigafactory or maybe a large body manufacturer? You’ll see what I have just said. This opportunity, maybe they haven’t seen it. Maybe there’s a better economics elsewhere. For now. I cannot pinpoint why they’re not doing this yet, but I feel that the economic packages that are coming in from the government with the growth and interest in electrification is hopefully better trade agreements between Canada and the US and the rest of the world. I believe it’s a no brainer and I believe in the next coming months, maybe years of the longest, we will see this happening here.

[00:18:02] Sarah, what do you think we need to come to grips with to up our game?

[00:18:06] Well, you mentioned it. I think that to attract an international player like that, we will have to play in the field of fiscal incentives. I know the government of Quebec is really on the ball, completely aware and looking for partners. And we need to make a concerted effort to really go after them and present a lot of those assets and make the pitch. So we need to be proactive. You know, all of us are trying. So we need to do to be very proactive.

[00:18:40] Yeah. And I don’t think we as Canadians quite appreciate how aggressive a lot of those states are in terms of soliciting, to use your word. Right. The opportunities, they don’t wait for the door to the door, bell to ring.

[00:18:52] You’re right. But we have the natural resources at the end of the day. So I think that we are very well positioned.

[00:18:58] Do we need to play hardball with those resources?

[00:19:02] The potential outcome is so great. You said almost historic.

[00:19:07] I would remove that almost and would go all in with historic. So, yes, we we really need to be aggressive. I think we we cannot miss this chance.

[00:19:17] Sara, how quickly is this moving? Because we’re all so consumed with the pandemic. Governments are consumed with vaccines and bio manufacturing, understandably. But there’s this this other shift that’s going on. How quickly is it moving?

[00:19:32] Super fast. This is a window of opportunity that won’t last forever. I think in Canada, Canada’s economy has done well during the pandemic compared to others. And I think that this might help us in the race because it might have slowed down everybody else and we exactly at the moment where we were accelerating. So my intuition would be that it was a good thing for us constantly.

[00:19:56] And Sarah looks at this from an ecosystem point of view, certainly from a public policy point of view, and has shared how governments may be viewing this. You come from the perspective of an entrepreneur and a startup. How much time do you think we have? Is this a matter of of months or years in terms of getting this right?

[00:20:16] As Sarah has mentioned, everything moves super fast. As soon as the guards of condemning borders, everything is going to go down. I feel the urgency in the growth and the demand for batteries that we hear all over the world. Battery manufacturer giga factories are going up everywhere. Europe, states, Asia. They’re just growing like mushrooms to be I feel down touch land of Canada is going to be flooded because the offers I don’t have a crystal ball, but I feel we are right at the inflection point, if I can call it where I believe it’s it’s about to get big.

[00:20:51] And if all this comes to pass, what in your mind does Canada look like in 20, 30 or 20, 40, maybe share with us your vision of where we can where we can get to?

[00:21:03] Well, this is a really good question because I’m obsessed with this question every day. So the first thing that I thought would be great is that if we would implement public policies, incentives to really help the transition to electric, we really wanted to boost these kinds of. Policy so that in 20, 30, 20, 30, five, with parity of price, you will really have an extreme boost in the market on the demand side. Now, what we need to do is to make sure that we seize this opportunity to produce enough vehicles and infrastructure to meet this demand and not import from abroad. Not so in 2030. We are not only able to meet our own local demand, but we are a major exporter of solutions for everybody who would like to transition to two electric fleets.

[00:21:55] This is such a fascinating conversation and a really, really important one. Sarah and Konstantin, thank you both for sharing your time and your perspectives. Pleasure. Thank you, John. It was fun. Sarah is the CEO of Propulsion Kobuk and Konstantin Commutative is the CEO of G Batteries after a quick break. I’ll be back with David Paterson from GM Canada.

[00:22:22] You’re listening to Disruptors and RBC podcast. My name is Sam Phillips, senior director of Economic Thought Leadership, behind that report on TV that John mentioned a few minutes ago. It really shows the urgency of this conversation among our findings. Tens of thousands of jobs could be at risk if Canada’s auto sector doesn’t pivot to any specific components. But the opportunity is also huge. A new continental trade strategy boost exports by a cumulative one trillion dollars by 20 30. You can find the full report at RBC dot com slash trading places now on with the show.

[00:23:01] Welcome back. Today, we’re talking about the road ahead for electric vehicles and how Canada and Canadian companies can play a huge role in the EV revolution. For Part two of the conversation. I’m joined by the vice president of corporate and environmental affairs at GM Canada, David Paterson. David, welcome to disruptors. Thanks, John. David, I don’t want to adjust, but I will. We’ve both been around long enough to have seen this movie or versions of it and probably feels a few times just harking back to. It’s been twenty five years since we were asking who killed the electric car? And now we’re seeing announcements like one hundred million dollar investment from the federal and state governments in a new battery factory that I mentioned earlier. In your mind, what’s different this time?

[00:23:46] Well, I think we are at an inflection point at last where a lot of the the big disruptions that we’ve been planning for many years in shifting to electric vehicles and all kinds of other technology that range from self-driving cars to flying cars are sort of on the horizon. And that sounds wild, but you don’t get there unless you take some pretty bold leaps. Technology is now at the stage where we can start to make this big change. And we’ve come out from General Motors and indicated that our intention is to effectively have all of our light duty vehicles, the electric vehicles, by twenty, thirty five. And that means everything from small city cars up to pickup trucks being fully battery electric.

[00:24:34] We’re not talking hybrids and sort of half gasoline, half battery. We’re talking about full battery vehicles. That’s a big leap. That’s a pretty ambitious change. We’re not the only ones. Lots of companies in the auto industry are now starting to to map out that trajectory of change, which is really the largest technology shift since we moved away from orses. But we’re finally at the inflection point where we can see over the horizon and it’s going to mean a lot of change right through a huge industry.

[00:25:04] And it’s interesting, you mentioned horses. We went from horses to the Model T without a lot of state involvement. What does that tell you about the state of play now in the EV sector that we’re seeing governments like ours and the Biden administration kind of leaning into this revolution, as you call it?

[00:25:21] Well, since the shift to the initial automobile world, we also have an incredible thicket of regulations that come with the incredible economic benefits we get from manufacturing automobiles. And so I tend to think of those in three big clusters. First of all, there is a very long list of safety regulations, everything from your seat belts to your warning signals. And it’s quite something to design a vehicle to meet all of those. Secondly, you have the traditional fuel economy regulations and the actually the auto industry has done extremely well there, where one of the few industries that’s actually meeting its targets for making sure that the internal combustion engine vehicles we produce are getting better and better. And then the third one we forgot about, which was NAFTA. And lo and behold, as we brought on the U.S.A., we’ve now adopted an incredible set of challenges in terms of meeting the local content requirements. So any engineer that’s going to develop a vehicle and put it on the road in three or five years has got to know that they can deliver that vehicle and meet all those regulations. And so it’s challenging. And and so government is deeply involved from a regulatory point of view. But they also see the opportunities that come from being involved from an economic point of view. And this is one of our top two industries in Canada when it comes to jobs. And it’s not just the jobs in the factories, it’s the jobs in the supply chain. And and more and more in the technology development side of it, too.

[00:26:51] You talk about the race. Many see it as a race against time. And we do have only a matter of years and certainly not many decades to get this right. How is GM going about innovation and beyond GM?

[00:27:05] The whole supply chain of creating almost a new industry is the same industry, but in many ways it’s very different in a very short span of time. That’s got to be a different innovation challenge from anything you’ve seen before.

[00:27:18] Yeah, it seems to be accelerating at an incredible pace. And really the shift in one area, which is the shift to electrification, is getting a lot of the attention. But we sort of start off at General Motors with our North Star, which is to kind of get everybody up in the morning saying, what are we trying to achieve? And for us, it is a world with zero emissions. In other words, moving to electric vehicles, but also a world with zero crashes and zero congestion in our cities so that we don’t spend all our time sitting in traffic. Those are pretty audacious goals to get to zero. But now we can see zero. And the technological challenge for that is batteries. It’s all about batteries. And so the future of electric vehicles and getting there and getting people. Who adopt these vehicles, which is a big, big challenge, getting consumers to make the switch comes down to the cost and the range of the batteries. So our future is about chemistry.

[00:28:12] Walk us through, David, especially for people. I’m not a gearhead, so I’ll be in that in that camp. What exactly the battery challenges. I just finished Bill Gates book on how to avoid a climate disaster, and he’s got a really good take on the battery challenge. And just that simple picture of the more you need from a vehicle.

[00:28:32] And he includes airplanes in this, the bigger the battery is. And you get to kind of a point on the curve where the battery is too big for the vehicle if you want to go far distances. So that’s one of the challenges that you’re up against. But how how should we be thinking through the battery revolution and what needs to be accomplished?

[00:28:51] Well, in its simplest sense, for a fully electric, battery driven car, what we want is batteries that give us more range and lower cost. What we are searching for on the horizon is something a lot of people refer to as price parity. Wouldn’t it be amazing if we could produce an electric vehicle that is not only the same cost as an internal combustion engine, but maybe even cheaper, and then all of a sudden you as a consumer are going to be delighted because you’re going to have something that’s more affordable to maintain and run. You’re not going to be doing all the same things you did with your transmission and with your engine. You can just plug it in when you come home and you’re going to have a full tank in the morning and you will be able to really enjoy a battery driven experience because you’re going to have, for example, instant talk to the wheels, the acceleration in these vehicles from the smaller vehicles like the Chevrolet Volt to the pickup trucks that we have coming out later this year.

[00:29:50] I mean, we have a Hummer EV, I think very appropriate that it’s a Hummer that’s coming back is the first big pickup truck into the market. Is it still going to be called the Hummer? That’s such an iconic name. It’s going to be called the Hummer EV. It’s got a beautiful grill on the front of it, but is fully battery electric. This is a 1000 horsepower equivalent vehicle. And we had General Motors, we know pickups, we know the large SUV market.

[00:30:15] I’m fascinated by the power of SUV and truck sales. It is the vast majority of vehicle sales in the country, as you know.

[00:30:22] And even though people say they’re committed to the battle against climate change, we continue to buy SUVs and and trucks in extraordinary numbers. So if we’re going to bend the curve significantly, it’s got to be through that path of those larger vehicles, many of them used by people who need them for terrain, for distance, for the geography that we love in this country, but is not necessarily friendly to that kind of volt vehicle that you mentioned. Is it that simple that rolling out this new generation of SUVs and Hummers is in a matter of years, going to flip the switch, if I can put it that way, to mass adoption of EVs?

[00:31:06] Adoption is a is a really interesting challenge. We’re going to need bigger batteries that have lots of range and will support the size of vehicles. People are looking for large families of four and several hockey bags. You’re not going to fit in small cars and they’re not going to work in terms of real work done across Canada, especially in rural areas. And so we can’t be providing mobility for just one portion of the population. It’s got to be for everybody and therefore you’ve got to continue to develop batteries. So for us at General Motors, we’ve made some very big bets. We’re building a three billion dollar battery plant in Ohio. We have an existing one in Michigan, and we’re going to be building more of them. But we’re changing the technology as we go. So we’ve set out with some pretty audacious goals to move, for example, from the battery range that you get on the Chevrolet Volt, which is about four hundred kilometers up to a range of a thousand kilometers. But you also need to do it in a way that doesn’t just make it twice as expensive. So over the next decade, we’re going to need to help incentivize consumers to be able to get into more expensive electric vehicles. We need to educate people. We’re just launching a major national television and online campaign called EV for everybody. But we’ve got a task to educate. We’ve got a task to make sure there’s a charging network. That’s a big challenge. And condos, people don’t have proper charging. So these are big challenges. We’ve got a decade to get it solved, but we can do it.

[00:32:38] You mentioned the education challenge. What is what is the biggest education challenge? What don’t most of us get that you’re hoping will will better understand?

[00:32:46] Well, I think there is a lot of apprehension about any technology that is different, although I’d like to think that Canadians are usually very early adopters. So people are wanting to know about the range of the vehicle range anxiety. And so that’s part of the. Challenge on us to get batteries that will give you the same kind of range as you can get with your current vehicle, so we have a big job to do, but then come back to the governments. They’re saying, oh, boy, we’re going to see a big change here. We’re going to be seeing some our engine and transmission plants starting to be less busy. And we’re going to need to think about battery plants. Well, what’s it take to create a battery plant? And we’ve got all these minerals here in Canada. Is that going to be something that’s helpful? And so there’s a bit of a I think a battery. Klondyke, happening right now. Everybody is kind of running as fast as they can to make sure that they’re going to be part of the development of jobs for the creation of batteries.

[00:33:38] I love that expression of battery. Klondyke panning for Ion’s. You mentioned a couple of the big investments GM is making in the battery space and those facilities were in the in the US. Same is true for other companies. Tesla comes to mind.

[00:33:57] What does Canada need to do to get a bigger share of that battery? Klondyke?

[00:34:02] Well, I think, first of all, it needs to have the long term confidence that it’s going to come anyway because this change to battery electric vehicles and all battery electric vehicles is going to take place right across North America. And batteries are big, heavy things. And so you’re generally going to want to produce them fairly close to the place that you’re going to manufacture them. We certainly intend to be here in Canada manufacturing for a long time. Got some very interesting investments that are taking place in the industry right now, not just General Motors. We happen to have one at our Kamei facility, which is sort of Tripoli. Interesting. I think, first of all, it’s a technology or a new vehicle called Bright Drop. So this is a cargo van and it’ll be a fully electric cargo van. When we did the innovation work on that, we actually tested this in Toronto with FedEx. And what they found is that it helped them cut their delivery time by 20 percent or more. So bright drop is a new technology for us. It’s going to be made in Canada. And I would think over time, as we make more and more battery electric vehicles, that we’re going to see more opportunity for battery plants to be here in Canada as well. The main thing is to think through the supply chain and think about the pieces that you’re missing, because a lot of us in the Klondyke kind of go right to I want to have the factory and the jobs, but we need to think through as well, not just the mining, but the mineral processing. Then we need the intellectual property to be able to develop the chemistry and put the cells together, or else we’re going to be dependent on Asian countries. It’s all that development that happens up front that we need to think through and understand and then pick our niches. What would be the niches that you think Canada could excel most? If you think of how many years we have been experts at mining, you think of, for instance, the technology center at McMaster on Minerals. You think of some of the expertize that Hydro-Quebec has developed in terms of the aluminum industry and using low GHG, low cost electricity to process iron ore to turn it into aluminum. So mineral processing is nothing new to us. We just should be doing more of it.

[00:36:07] People may listen to what you’ve said, which all makes sense and say, OK, that sounds like our opportunity is going to be at the the front end of the supply chain, more at the the raw materials and the processing and less at the final assembly, plus perhaps the Gigafactory level, if you will. How do we have a shot for those other parts of the supply chain?

[00:36:30] Well, I think we do have a shot and I think they will come. It’s just that like all new technologies, we need to make sure that we have the right intellectual property and the right development of intellectual property to be able to get there. And so we really need to continue to double down on our Canadian universities and our Canadian research and development capability. We need to see Canadians own their intellectual property and be able to develop companies that can be part of this incredible Klondyke of supply chain that’s going forward.

[00:37:04] You’ve mentioned IP a couple of times and I don’t want to take too much of a detour down that down that road. But but it but it’s critical. Yes. We need to spend more on basic research. And in the areas that you mentioned, we had your old friend, Jim Balsillie on an earlier episode of disruptors, and you’re well familiar with his passionate point of view on IP.

[00:37:27] I wonder what you think we need to do apart from being more ambitious in that space on patenting and owning our patents, what are the one or two things we could do as a country to get better game on IP as we take on this this rapidly emerging sector?

[00:37:44] Not surprisingly, I agree with Jim worked with Jim for a number of years and learned an immense amount from him and the intangibles. Economy is going to be the determinant of future wealth on our planet. You need to not just have intellectual property. You need to have an intellectual. Property strategy, it’s more a mindset of being able to own your ideas and not sell out your company when you get to 100 million dollars. Let’s keep going so that we get more companies that are Canadian domestic, they own their intellectual property, and then they grow to be 20 billion dollar companies like BlackBerry. So, you know, there are a limited number of international OEMs that are going to be making millions of vehicles per year. If you develop whatever your widget is and it goes into over a million vehicles a year, you’re probably talking about real success. We need to invent the ideas here so we know how close to a thousand people working at General Motors in our software and engineering facilities in Oshawa and in Markham. And we have some very cool things, like a new test track that we just put on the property at Ossur, where it’s a place to put code on the road. It’s a test track for software.

[00:38:57] We’ve been talking a lot about widgets, which is probably what people think about when they think about cars. But GM is, too, to your point, becoming more of an intangible company. You’re creating ideas. I love that expression code to the road and the test track that you’re developing in Oshawa, what’s the goal there?

[00:39:16] Well, because we now have such a production line of technology development, we would need to put that in a physical vehicle to make sure it’s going to work and integrate properly with all the other things that go on in a vehicle. So normally we would have to take those vehicles at a development stage down to our proving grounds and our test tracks in the United States. It would cost time and it would be inefficient. And we’re now of a critical mass in General Motors, Canada, that having our own test track here, we can use it. Twenty seven. We also have a huge cold weather testing facility in Wisconsin where we just had a virtual tour for people to to see what it’s like to test out an electric vehicle when it’s thirty one degrees below zero in the morning. And it still worked to the start. It certainly did.

[00:40:03] David, as we move towards close, I want to get your perspective and maybe GM’s perspective again on Canada’s competitiveness opportunities, as well as challenges we had from propulsion Quebec back on the first part of the show, making a very passionate argument for what Quebec is doing in the propulsion space, not just with vehicles, but with anything that moves. They want to electrify the power that that moves us capex doing some interesting things. Ontario’s got got some interesting, interesting things on the go as well. But it’s a competitive landscape. US states are all over this with their advantages as well.

[00:40:45] What are the big questions you think we as Canadians need to come to grips with as we get deeper into this very exciting space, but also disruptive space?

[00:40:55] Yeah, I mean, I think we need to figure out how we’re going to incentivize consumers to make the switch to electric vehicles over the next decade, because I don’t think we can take that for granted. In all our research, we found that once people buy an electric vehicle, they don’t want anything but for the rest of their lives, they love it. But like anything that’s new, we’re going to need to create incentives. We had some fun in a Super Bowl ad with this recently with Will Ferrell pointing out that Norway has a fifty percent electric vehicle sales rate or more, and they do some very strategic, smart policy things to make sure that people buy electric vehicles. And so it’s things like, can you imagine if because you’re going to buy an electric vehicle, you get a free ride on the ETR for seven or you got free parking when you go downtown or you didn’t have to pay for your license renewal. So I think we can be a lot more effective from a policy point of view, from an economic point of view, I think we should not forget that the auto industry is much, much more than just putting the pieces together. It’s actually inventing the future and then make sure that you own it in Canada as best you can and get your domestic companies to step forward and and see that they don’t need to just serve the Canadian market. They can serve a global market.

[00:42:10] That’s a great view of the enormous opportunity. David, before I let you go, one last question about that. Will Ferrell and Country of Lucius, great, great line. And those of us of a certain age will remember Will Ferrell and kicking and screaming, mocking the coffee shop lady about her electric bill. I thought, how far how far we’ve come. Just give us a quick sense. Where did that I come from? What did what what inspired?

[00:42:38] Well, I think it comes from a spirit of, you know, a company, General Motors, that’s been pretty conservative for a long period of time. But we’re making one of the biggest changes that is imaginable. And when we make that change, when we say that we’re going all electric, people tend to stand up and notice that, you know, I think that’s poking a little fun at our. Pointing out that we’ve got to really be all in on this stuff and we are we’re totally all in on this and somehow, you know, when you make a proclamation like we have some changes in your organization and in the way you look at problems, you’re not being held back by the past. And, boy, is it fun. It’s exciting. And so, you know, if you pick your North Star and you make some real targets and you have the confidence that you’re going to solve the problems and we do, you can change the world with a great message while kicking and screaming or otherwise.

[00:43:31] It’s great to see so many people on this journey to the battery. Klondyke.

[00:43:38] My guest has been David Paterson, the VP of corporate and environmental affairs at GM Canada. David, thanks for riding shotgun with me on disruptors. Great seeing. John, thanks so much. I’d also like to thank Constantine Almatov, the CEO of G.E. Batteries, and Sarah ued the CEO of Propulsion Quebec, who joined me for part one of this episode. I’m John Stackhouse and this is Disruptors and RBK podcast. I hope you’ll listen again next time for the first half of our special series on creativity. In the meantime, I’d encourage you to catch up on any past episodes, including that conversation with Jim Balsillie on your favorite podcast platform. Talk to you soon.

[00:44:25] Disruptors and RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service, it’s produced and recorded by Jar Audio for more disruptors, content like or subscribe wherever you get your podcasts and visit RBC Dotcom Slash Disrupters.