No sacred cows for Murray

Dateline: Quebec City

If I read the tea leaves correctly, change is in the air at Ontario’s Ministry of Research and Innovation — and expectations are building within the start-up and venture capital ecosystem.

Ontario MRI Minister Glen Murray gave a keynote speech at the highly successful Quebec City Conference, and it was as nuanced and newsworthy as anything I’ve heard locally on the Innovation file in the past few years; particularly if you are one of Ontario’s few remaining providers of fresh venture dollars for the new economy. From a macro perspective, this Minister definitely “gets it”, describing his BlackBerry device as “an invention, not innovation”. It became an innovation, he says, when Mike Lazaridis went to the carriers and hooked it up to our email inboxes.

With the Chateau Frontenac as the setting, Minister Murrary told the crowd of Canadian VCs, pension funds and foreign soverign wealth funds that the time had come to have a “dynamic conversation”, and that “he was looking for articulate voices from the industry” to help him chart a new course.

He also showed a hint of a free market side, to my great relief, acknowledging that some may have discomfort in asking the government to play a role in the capital markets. There are, of course, some of us who are worried about governments crowding-out the private sector (see representative prior post “‘Bruce’ the mindless eating machine” May 31-08).

Things got newsworthy when Minister Murray reflected on what had been done in the portfolio prior to his arrival. There’s “work to be done”, he says. He described the MRI strategy to date as having been a model based upon a “returns-driven approach”. He went on to describe the Ontario Venture Capital Fund as their “struggling but optimistic fund of fund.” But he is pleased with the traction of the Emerging Technology Fund (something that the industry might take credit for, I believe, by taking it upon ourselves to band together and draft the terms of engagement for the program, post announcement). He also raised the bar for his own team and the industry as a whole, by saying that “we haven’t quite met our standard to put great pools of capital to work.”

Yes, you read that correctly. The Minister, in what I suspect is his trademark frank style, described the OVCF as “struggling”; since his speech hasn’t been posted yet, you’ll have to take my word for it. Your ever precise scribe checked with two others, and it turns out that I wasn’t dreaming.

Minister Murray drew a good parallel to the recent bankruptcies in the U.S. auto industry, which has driven innovation and profits for the sector in recent months. But, we “need less provocative ways to create innovation”. Touche. Unfortunately, Canada’s start-up and VC ecosystem has already stretched its life support as long as it can go (see prior representative posts “The creative destruction of Canada’s VC industry” April 24-10 and “Mass confusion in ventureland” Oct 15-10).

As outings go, it was a very good one; and to think our new man spent his birthday hearing from players in the sector, rather than celebrating with his family. Dedication above and beyond the call.

Hopefully, Minister Murray will wind up being the one to bring the industry back from the brink, rather than play the role of coroner.

MRM