Tag: Financial Services

Industry Analysis: The Bigger Picture


David Mayes

Industry Analysis: The Bigger Picture

by  on Jul 19, 2013

Industry analysis is not a well-understood discipline. It sits between macroeconomic analysis and market analysis and uses tools from both. It is most commonly associated with the financial services industry which produces guides for their investors. But there are also large global consultancy firms that specialize in industry analysis.   It is an important tool for governments, regional development agencies. Companies use industry analysts to assist in their strategic planning. Those who can anticipate the changes in an industry are more likely to be successful.  This brief presentation provides an overview of what industry analysis is, examples of industry analysis in action, and why it is so important.

Industry Analysis: the bigger picture.  Presentation Transcript

  • 1. Industry Analysis: The Bigger Picture July 2013 ©David Mayes 1
  • 2. Industry Analysis: The Bigger Picture David Mayes, Lecturer ©David Mayes 2
  • 3. Introduction 1. Lecturer Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading Industry Analysis: The Bigger Picture ©David Mayes 3
  • 4. Lecturer Introduction ©David Mayes 4 Industry Analysis: The Bigger Picture
  • 5. Industry Analysis Lecturer Introduction David Mayes: LinkedIn Profile: http://www.linkedin.com/in/mayo615 Google+ Profile: https://plus.google.com/u/0/118299264663896711410/about Email: david.mayes@ubc.ca mayo0615@gmail.com UBC Office: EME 4157 (250) 807-9331 Hours: Thurs. 12PM – 2PM or by appt. Cellular: (250) 864-9552 Twitter: @mayo615 Experience: Executive management, access to venture capital, international business development, sales & marketing, entrepreneurial mentorship, technology assessment, strategic planning, renewable energytechnology. Intel Corporation, 01 Computers Group (UK) Ltd., Mobile Data International, Silicon Graphics, Sun Microsystems, Ascend Communications, P-Cube, Global Internet Group LLP, New Zealand Trade & Enterprise. ©David Mayes 5
  • 6. Introduction 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 6 Industry Analysis: The Bigger Picture
  • 7. What is Industry Analysis? ©David Mayes 7 Industry Analysis: The Bigger Picture
  • 8. Industry Analysis What is Industry Analysis? A Proposed Definition of Industry Analysis: Industry analysis looks at long-term trends and forces that affect an overall industry. It is a strategic analysis tool used by governments, economic development agencies, financial services & investment firms, management consultancy firms, and businesses. Current estimates and future industry projections may include consideration of a broad range of global and local factors: economic, supply and demand, individual competitors, other external future forecasts, and government policy affecting the industry. Industry analysis is commonly performed within the framework of macro- economic analysis as well as market analysis theories and tools. ©David Mayes 8
  • 9. Industry Analysis What is Industry Analysis? Industry Analysis As A Discipline: • Best known in the financial services industry • Industry performance & forecast guides for investors • High profile industry analysis consultancy firms • IDC, Gartner, Forrester, dozens of others in vertical markets • Used as a strategic planning tool by companies • “How to” guides/textbooks very limited, but masses of primary statistics and reports • Seen as between macro-economics and market research ©David Mayes 9
  • 10. Macro Economy: Global, Regional, National An Industry: Global, Regional, National A Market: Can Be Industry Sub- segment(s) Competitor(s) Us Industry Analysis What is Industry Analysis? Hierarchy of Economic Analysis OUR FOCUS ©David Mayes 10
  • 11. Industry Analysis What is Industry Analysis? IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012 IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012 Business Wire FRAMINGHAM, Mass. — December 15, 2011 “Despite the continuing global macroeconomic problems, semiconductor inventory overbuild early this year, and current DRAM oversupply, semiconductor revenues will register positive year-over-year (YoY) growth of 3.4% and 3.1% with $296billion and $305 billion for 2011 and 2012, respectively, according to the year-end 2011 update of IDC’s Semiconductor Application Forecaster (SAF).”The 2011 year-end update reaffirms the views IDC expressed in its qualitative SAF update published in November 2011….” Yada yada yada… Full Report Price: $1,000, other reports up to $10,000 Industry Analysis Example ©David Mayes 11
  • 12. Industry Analysis What is Industry Analysis? http://www.youtube.com/watch?v=31SpS3 6ynDs&hd=1 Semiconductor Industry Analysis: Intel Cuts 2012 Outlook on Hard Drive Shortage (Flood in Thailand) ©David Mayes 12
  • 13. Industry Analysis What is Industry Analysis? http://www.youtube.com/watch?v=- I50V4PO1y4&feature=g- wl&context=G25b6f51AWAAAAAAAAAA Information Technology Industry Analysis: Samsung Economic Research Institute ©David Mayes 13
  • 14. Industry Analysis What is Industry Analysis? http://www.economist.com/node/21541746 The Economist on Video Gaming: World of Warcraft vs. New Market Entrants ©David Mayes 14
  • 15. Industry Analysis What is Industry Analysis? http://www.dailymotion.com/video/xblts0_in dustry-analyst-jesse-divnich-on- v_videogames Video Gaming Analyst Jesse Divnich on the Video Games Industry ©David Mayes 15
  • 16. Industry Analysis What is Industry Analysis? Answer: Huge consumption of microprocessors for game consoles “Over the past two decades the video-games business has gone from a cottage industry selling to a few niche customers to a fully grown branch of the entertainment industry. According to PricewaterhouseCoopers (PwC): • Global video-game market worth around $56 billion last year. • More than twice the size of the recorded-music industry • Three-fifths the size of the film industry, Including DVD sales Video games will be the fastest-growing form of media over the next few years, with sales rising to $82 billion by 2015.” — The Economist. December 10th, 2011 How Does The Video Games Market Relate to the Semiconductor Industry? ©David Mayes 16
  • 17. Industry Analysis What is Industry Analysis? Leading Industries in Canada (GDP): • Aerospace (5th largest in the World) • Agri-food (4th largest exporter) • Automotive (3rd largest exporter in World) Leading Industries in British Columbia (GDP): • Construction • Manufacturing (?) • Mining & Gas Extraction Leading Industries in the Thompson Okanagan (GDP): • Construction • Manufacturing • Services (retail, tourism, etc.) Key Industries in Canada ©David Mayes 17
  • 18. Questions? What is Industry Analysis? ©David Mayes 18
  • 19. Industry Analysis 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 19 Industry Analysis: The Bigger Picture
  • 20. Industry Analysis Why Industry Analysis? ANSWER: Large scale economic shifts caused by demographic, geographic, political, technological and social changes can create new opportunities or can lead to the demise of a company. Competitors that can anticipate these large-scale economic shifts are more likely to survive. Why Industry Analysis? ©David Mayes 20
  • 21. Industry Analysis Why Industry Analysis? • Government Policy • Taxation, incentives, international export market development • Focused Economic Development Programs • Which industries should be promoted? • Example: New Zealand Trade & Enterprise* • Institutional/Individual Investment Management • Tracking Industry Trends and Growth • Management Consultancy Firms • Strategic Business Decisions on Markets • Individual businesses Why Industry Analysis? ©David Mayes 21
  • 22. Industry Analysis Why Industry Analysis? • Federal, Provincial Ministries & Economic Development Agencies • Canadian Ministries of Industry and International Trade • BC Ministry of Energy, Mines and Petroleum • Central Okanagan Regional Development • Financial Services and Investment Firms • BMO, CIBC, RBC, TD Canada Trust, credit unions • Stock brokerages • Financial news networks • Management Consultancy Firms • Accenture, BCG, HP, IBM, PWC, Forrester, Gartner, IDC • Businesses • Executive management, strategic planning units • Corporate positioning, SWOT, long range planning Who Conducts and Uses Industry Analysis? ©David Mayes 22
  • 23. Industry Analysis Why Industry Analysis? Example: New Zealand Trade & Enterprise Marketing an Entire Nation as an Industry http://www.nzte.govt.nz/Pages/default.aspx http://www.youtube.com/watch?v=eh-0knDpn5g ©David Mayes 23
  • 24. Industry Analysis Why Industry Analysis? Example: International Data Corporation (IDC) http://www.idc.com/prodserv/maps/consumer.jsp ©David Mayes 24
  • 25. Industry Analysis Why Industry Analysis? Example: Central Okanagan Economic Development Commission http://investkelowna.com/ ©David Mayes 25
  • 26. Questions? Why Industry Analysis? ©David Mayes 26
  • 27. Industry Analysis 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 27 Industry Analysis: The Bigger Picture
  • 28. Industry Analysis Suggested Reading: Suggested Reading: HBR’s 10 Must Reads on Strategy, Harvard Business Press, 2011 (HBR article anthology). Blue Ocean vs. Five Forces, Burke, A.E. (HBR journal article, online) http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=660 How to Conduct An Industry Analysis, Small Business and Technology Development Center, http://www.sbtdc.org/pdf/industry_analysis.pdf ©David Mayes 28
  • 29. ©David Mayes 29

Big Idea Entrepreneur: Andrew Chung of Khosla Ventures

With the cost of starting and operating a company dropping precipitously, where do Venture Capitalists fit in, if at all? How can they bring value to an up-and-coming business? As every aspect of our lives — and how we do business — changes from the impact of technology and the Internet, so must financing all of these disruptive dreams. This brings me to Andrew Chung of Khosla Ventures. He’s both an artist and entrepreneur, who breaks the mold of the stereotypical shark investor while financing groundbreaking technology that affects how we re-charge: intellectually, monetarily and literally (as in how we will power our lives).


batteriesAndrew Chung of Khosla Ventures is a VC trying to change how we recharge (via Pando Daily)
http://youtu.be/14rLwrGqIAs

By Ondi Timoner On September 21, 2013

In the tech world, no one gets a bad rap like the venture capitalist. Often derided as opportunists and gold diggers who take advantage of passionate and eager startups with unfavorable valuations, some entrepreneurs see VCs as a necessary evil to scale their disruptive idea to a national or global stage. Sometimes, though, these VCs are the greatest allies and closest advisors to the founders. They are often the unsung heroes who fuel and guide innovation.

Still, with the cost of starting and operating a company dropping precipitously, where do Venture Capitalists fit in, if at all?  How can they bring value to an up-and-coming business? As every aspect of our lives — and how we do business — changes from the impact of technology and the Internet, so must financing all of these disruptive dreams.

This brings me to Andrew Chung of Khosla Ventures. He’s both an artist and entrepreneur, who breaks the mold of the stereotypical shark investor while financing groundbreaking technology that affects how we re-charge: intellectually, monetarily and literally (as in how we will power our lives).

Chung began his entrepreneurial education when he was five years old working in his family’s Chinese restaurant, where he learned the value of hard work, customer service, and perseverance. Not only did he attain ground-level experience in a small business, one customer, a local scientist from Princeton University, saw the boy’s potential and visited every weekend to teach Andrew advanced math and physics. He mastered Geometry at age 6, Calculus at 10, and Relativity by 12. It wasn’t long before Harvard came calling.

By 19, Chung had started his own company and built some of the first Flash-based websites for local business around campus. Not longer after, he co-founded a startup called Uberworks, an e-commerce platform and successfully steered it to a successful acquisition by a public company. Soon, Chung was drawn into the world of investing through stints at Bain Capital and worked in the arenas of energy, healthcare, and software.

During this time, his commitment to a career in business was challenged by the other great love of his life: Music. A talented vocalist, Chung won Chinese “American Idol” and was a finalist in Hong Kong’s version of “American Idol,” upon which he was offered a major record deal. Flipping the familiar narrative, he chose entrepreneurship over art, because he says he could make a bigger difference in the world.

Now a partner at Khosla Ventures, Chung’s goal is to disrupt traditional industries, revolutionize humanity and in his words “invent the future.” To do this, Chung has access to a $350 million seed fund to allow new companies and scientists to explore and experiment and help them grow their reach. He also has access to a main fund of $1 billion to help those companies scale to full maturity.

Khosla Ventures was an early investor in Jack Dorsey’s Square, which developed a way for mobile devices to accept payments, allowing anyone to operate as a small business and challenging the chokehold of the old guard. Another democratizing platform Chung is helping to fuel is Wattpad, a social reading platform that enables writers to upload their work and get real-time feedback. Wattpad is like Youtube, but with user-generated writing. It has millions of users, and the platform boasts teenager writers with fan bases multiple sizes larger than some NY Times best-selling authors. Chung sees this as the first step to toppling the publishing industry. 

One early investment of Chung’s that I’m most excited about involves the liquid battery, a potential game-changer in the fight to preserve life in the face of global warming. It stores and deploys renewable energy sources like wind and solar generated electricity across the grid as needed. That power outage in the South Bay that knocked out electricity in more than 115,000 homes earlier this week (which has happened a hundred times over the last five years) or the extended blackout after Hurricane Sandy in New York City could be a thing of the past if AMBRI’s liquid battery became part of our nation’s energy plan.

Instead of building more power plants to keep up with worldwide consumption and the increasing costs of updating aging infrastructure, the liquid battery could contribute towards a cleaner and more sustainable future.  

Continue reading “Big Idea Entrepreneur: Andrew Chung of Khosla Ventures”

Industry Analysis: The Bigger Picture

Industry analysis is not a well understood discipline. It sits between macro economic analysis and market analysis, and uses tools from both. It is most commonly associated with the financial services industry which produces guides for their investors. But there are also large global consultancy firms that specialize in industry analysis. It is an important tool for governments, regional development agencies. Companies use industry analysts to assist their strategic planning. Those who can anticipate the changes in an industry are more likely to be successful. This brief presentation provides an overview of what industry analysis is, examples of industry analysis in action, and why it is so important.


David Mayes

Industry Analysis: The Bigger Picture

by  on Jul 19, 2013

Industry analysis is not a well understood discipline. It sits between macro economic analysis and market analysis, and uses tools from both. It is most commonly associated with the financial services industry which produces guides for their investors. But there are also large global consultancy firms that specialize in industry analysis.   It is an important tool for governments, regional development agencies. Companies use industry analysts to assist their strategic planning. Those who can anticipate the changes in an industry are more likely to be successful.  This brief presentation provides an overview of what industry analysis is, examples of industry analysis in action, and why it is so important.

Industry Analysis: the bigger picture.  Presentation Transcript

  • 1. Industry Analysis: The Bigger Picture July 2013 ©David Mayes 1
  • 2. Industry Analysis: The Bigger Picture David Mayes, Lecturer ©David Mayes 2
  • 3. Introduction 1. Lecturer Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading Industry Analysis: The Bigger Picture ©David Mayes 3
  • 4. Lecturer Introduction ©David Mayes 4 Industry Analysis: The Bigger Picture
  • 5. Industry Analysis Lecturer Introduction David Mayes: LinkedIn Profile: http://www.linkedin.com/in/mayo615 Google+ Profile: https://plus.google.com/u/0/118299264663896711410/about Email: david.mayes@ubc.ca mayo0615@gmail.com UBC Office: EME 4157 (250) 807-9331 Hours: Thurs. 12PM – 2PM or by appt. Cellular: (250) 864-9552 Twitter: @mayo615 Experience: Executive management, access to venture capital, international business development, sales & marketing, entrepreneurial mentorship, technology assessment, strategic planning, renewable energytechnology. Intel Corporation, 01 Computers Group (UK) Ltd., Mobile Data International, Silicon Graphics, Sun Microsystems, Ascend Communications, P-Cube, Global Internet Group LLP, New Zealand Trade & Enterprise. ©David Mayes 5
  • 6. Introduction 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 6 Industry Analysis: The Bigger Picture
  • 7. What is Industry Analysis? ©David Mayes 7 Industry Analysis: The Bigger Picture
  • 8. Industry Analysis What is Industry Analysis? A Proposed Definition of Industry Analysis: Industry analysis looks at long-term trends and forces that affect an overall industry. It is a strategic analysis tool used by governments, economic development agencies, financial services & investment firms, management consultancy firms, and businesses. Current estimates and future industry projections may include consideration of a broad range of global and local factors: economic, supply and demand, individual competitors, other external future forecasts, and government policy affecting the industry. Industry analysis is commonly performed within the framework of macro- economic analysis as well as market analysis theories and tools. ©David Mayes 8
  • 9. Industry Analysis What is Industry Analysis? Industry Analysis As A Discipline: • Best known in the financial services industry • Industry performance & forecast guides for investors • High profile industry analysis consultancy firms • IDC, Gartner, Forrester, dozens of others in vertical markets • Used as a strategic planning tool by companies • “How to” guides/textbooks very limited, but masses of primary statistics and reports • Seen as between macro-economics and market research ©David Mayes 9
  • 10. Macro Economy: Global, Regional, National An Industry: Global, Regional, National A Market: Can Be Industry Sub- segment(s) Competitor(s) Us Industry Analysis What is Industry Analysis? Hierarchy of Economic Analysis OUR FOCUS ©David Mayes 10
  • 11. Industry Analysis What is Industry Analysis? IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012 IDC Forecasts Worldwide Semiconductor Revenues Will Reach $305 Billion in 2012 Business Wire FRAMINGHAM, Mass. — December 15, 2011 “Despite the continuing global macroeconomic problems, semiconductor inventory overbuild early this year, and current DRAM oversupply, semiconductor revenues will register positive year-over-year (YoY) growth of 3.4% and 3.1% with $296billion and $305 billion for 2011 and 2012, respectively, according to the year-end 2011 update of IDC’s Semiconductor Application Forecaster (SAF).”The 2011 year-end update reaffirms the views IDC expressed in its qualitative SAF update published in November 2011….” Yada yada yada… Full Report Price: $1,000, other reports up to $10,000 Industry Analysis Example ©David Mayes 11
  • 12. Industry Analysis What is Industry Analysis? http://www.youtube.com/watch?v=31SpS3 6ynDs&hd=1 Semiconductor Industry Analysis: Intel Cuts 2012 Outlook on Hard Drive Shortage (Flood in Thailand) ©David Mayes 12
  • 13. Industry Analysis What is Industry Analysis? http://www.youtube.com/watch?v=- I50V4PO1y4&feature=g- wl&context=G25b6f51AWAAAAAAAAAA Information Technology Industry Analysis: Samsung Economic Research Institute ©David Mayes 13
  • 14. Industry Analysis What is Industry Analysis? http://www.economist.com/node/21541746 The Economist on Video Gaming: World of Warcraft vs. New Market Entrants ©David Mayes 14
  • 15. Industry Analysis What is Industry Analysis? http://www.dailymotion.com/video/xblts0_in dustry-analyst-jesse-divnich-on- v_videogames Video Gaming Analyst Jesse Divnich on the Video Games Industry ©David Mayes 15
  • 16. Industry Analysis What is Industry Analysis? Answer: Huge consumption of microprocessors for game consoles “Over the past two decades the video-games business has gone from a cottage industry selling to a few niche customers to a fully grown branch of the entertainment industry. According to PricewaterhouseCoopers (PwC): • Global video-game market worth around $56 billion last year. • More than twice the size of the recorded-music industry • Three-fifths the size of the film industry, Including DVD sales Video games will be the fastest-growing form of media over the next few years, with sales rising to $82 billion by 2015.” — The Economist. December 10th, 2011 How Does The Video Games Market Relate to the Semiconductor Industry? ©David Mayes 16
  • 17. Industry Analysis What is Industry Analysis? Leading Industries in Canada (GDP): • Aerospace (5th largest in the World) • Agri-food (4th largest exporter) • Automotive (3rd largest exporter in World) Leading Industries in British Columbia (GDP): • Construction • Manufacturing (?) • Mining & Gas Extraction Leading Industries in the Thompson Okanagan (GDP): • Construction • Manufacturing • Services (retail, tourism, etc.) Key Industries in Canada ©David Mayes 17
  • 18. Questions? What is Industry Analysis? ©David Mayes 18
  • 19. Industry Analysis 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 19 Industry Analysis: The Bigger Picture
  • 20. Industry Analysis Why Industry Analysis? ANSWER: Large scale economic shifts caused by demographic, geographic, political, technological and social changes can create new opportunities or can lead to the demise of a company. Competitors that can anticipate these large-scale economic shifts are more likely to survive. Why Industry Analysis? ©David Mayes 20
  • 21. Industry Analysis Why Industry Analysis? • Government Policy • Taxation, incentives, international export market development • Focused Economic Development Programs • Which industries should be promoted? • Example: New Zealand Trade & Enterprise* • Institutional/Individual Investment Management • Tracking Industry Trends and Growth • Management Consultancy Firms • Strategic Business Decisions on Markets • Individual businesses Why Industry Analysis? ©David Mayes 21
  • 22. Industry Analysis Why Industry Analysis? • Federal, Provincial Ministries & Economic Development Agencies • Canadian Ministries of Industry and International Trade • BC Ministry of Energy, Mines and Petroleum • Central Okanagan Regional Development • Financial Services and Investment Firms • BMO, CIBC, RBC, TD Canada Trust, credit unions • Stock brokerages • Financial news networks • Management Consultancy Firms • Accenture, BCG, HP, IBM, PWC, Forrester, Gartner, IDC • Businesses • Executive management, strategic planning units • Corporate positioning, SWOT, long range planning Who Conducts and Uses Industry Analysis? ©David Mayes 22
  • 23. Industry Analysis Why Industry Analysis? Example: New Zealand Trade & Enterprise Marketing an Entire Nation as an Industry http://www.nzte.govt.nz/Pages/default.aspx http://www.youtube.com/watch?v=eh-0knDpn5g ©David Mayes 23
  • 24. Industry Analysis Why Industry Analysis? Example: International Data Corporation (IDC) http://www.idc.com/prodserv/maps/consumer.jsp ©David Mayes 24
  • 25. Industry Analysis Why Industry Analysis? Example: Central Okanagan Economic Development Commission http://investkelowna.com/ ©David Mayes 25
  • 26. Questions? Why Industry Analysis? ©David Mayes 26
  • 27. Industry Analysis 1. Instructor Introduction 2. What is Industry Analysis? 3. Why Industry Analysis? 4. Suggested Reading ©David Mayes 27 Industry Analysis: The Bigger Picture
  • 28. Industry Analysis Suggested Reading: Suggested Reading: HBR’s 10 Must Reads on Strategy, Harvard Business Press, 2011 (HBR article anthology). Blue Ocean vs. Five Forces, Burke, A.E. (HBR journal article, online) http://toby.library.ubc.ca/subjects/subjpage2.cfm?id=660 How to Conduct An Industry Analysis, Small Business and Technology Development Center, http://www.sbtdc.org/pdf/industry_analysis.pdf ©David Mayes 28
  • 29. ©David Mayes 29

The Other “Big Idea” Taking Root in Greater Vancouver: Nuclear Fusion

Maybe three years ago, I recall hearing something about a “nuclear fusion” company starting up in Burnaby. In my mind, the thought of a nuclear fusion company in Burnaby was outlandish and preposterous. Growing up in southern California, and later northern California, I had grown up close and personal with the Space Program, and nuclear physics at UC Berkeley Lawrence Nuclear Labs and the super secret Lawrence Livermore National Labs.


DraperGeneralFusion1California venture capitalist, Steve Jurvetson, Riding the General Fusion Containment Vessel

Maybe three years ago, I recall hearing something about a “nuclear fusion” company starting up in Burnaby.  In my mind, the thought of a nuclear fusion company in Burnaby was outlandish and preposterous.  Growing up in southern California, and later northern California, I had been “up close and personal” with the Space Program, and nuclear physics at UC Berkeley Lawrence Nuclear Labs and the super secret Lawrence Livermore National Labs.  My next door neighbor in Moss Beach, California worked at Livermore Labs. I learned of this only because an FBI agent called on me to politely inquire about him (just a routine update of their files, apparently).   My notion was that something like nuclear fusion might “someday” be real, but would  require the scale of a Manhattan Project,  probably after I was long gone.  Nuclear fusion was pure Star Trek, so beyond current science as to be completely fantastical.

As it happens, there has already been an enormous amount of work on nuclear fusion, at enormous expense.  The United States has been working on a project at Livermore National Labs, known as The National Ignition Facility (https://lasers.llnl.gov/#), which even uses the Star Trek imagery on their website. The other major project is a United Nations sponsored project, involving many nations, at the largely secret French nuclear research facility in Haute Provence, Cadarache.  I happen to know the Cadarache nuclear research site extremely well, because it is situated on the main road to my wife’s home village, we know people who work there, and there are almost always Greenpeace demonstrators at the main gate. Known as the International Thermonuclear Experimental Reactor (ITER) project, it is expected to be operational in 2022, but only after the expenditure of multiple Billions of Euros, at a time when Euros are in short supply.

Unfortunately, as often happens in such visionary research and development, both the U.S. National Ignition Facility and the Cadarache ITER projects have run into major technical and financial problems that are threatening their futures.

But then we have General Fusion, a very small startup company in Burnaby, on an infinitesimally smaller budget than the United States or the United Nations. apparently competing with the U.S. Department of Energy and the United Nations ITER project at Cadarache. How can this be?  Why does this also sound like the other Big Idea startup in Burnaby, D-Wave, perfecting quantum computing, despite the enormous odds against it?

This is not to say that General Fusion is going to necessarily change the World. What it does say is that enough informed people and brave investors believe that it is possible, that they are willing to risk their careers and that major institutional investors are prepared to risk their capital on it.  That is the Big Idea in action. That is what innovation in Canada needs more than anything. Money and bravery.

Ryan Holmes, CEO of Hootsuite in Vancouver, another of the shining new companies, has recently posted on LinkedIn that Canada is creating a “Maple Syrup Gang” of promising startups that are redefining entrepreneurship in Canada, his company being prominent among them. The “Maple Syrup Gang” is an amusing analogy to the real-life hijacking of millions of dollars of maple syrup by a criminal gang in Quebec. Holmes has also gone on to rhetorically ask the question, “Is Silicon Valley‘s Heyday Over?”  Regrettably, Holmes articles are embarrassing hyperbole.  Vancouver has had earlier promising high tech booms that have fizzled and died.  Unfortunately, the complex matrix of issues affecting Canadian innovation and the potential success of Canadian startups are still daunting.

I am very encouraged by the early successes of General Fusion and D-Wave in Vancouver, for many reasons.  But it is extremely premature to declare victory over Silicon Valley.  I came here in 1987 to join a promising startup, pioneering wireless data.. The company died from mismanagement, when it could have been a World power in wireless data. It is a case study in how Canada has historically shot itself in the foot, or is unable to capitalize,  every time it gets a good idea.

Let’s celebrate General Fusion and D-Wave and continue working to help Canadian Big Ideas succeed….here in Canada.