Two decades ago I would occasionally find myself in Ontario given the developing innovation corridor between Toronto and Waterloo, affectionately referred to as “Silicon Valley North.” Last week I visited again and saw the emergence of a strong healthcare tech ecosystem, leveraging historic strengths in telecom infrastructure and the recent (and significant) commitments to the artificial intelligence sector. Out of a coordinated series of university initiatives, Thomson Reuters recently reported that over $350 million had been invested in the AI sector over the past three years in Ontario, employing over 1,100 AI researchers alone. “Silicon Valley North” is the third most important AI cluster in the world according to Element AI. This past week, Salesforce said it would invest $2 billion in the Canadian tech sector.
My meetings were on the Canadian side of the Niagara Falls, which I had not visited since I could barely peer over the protective handrails. Niagara Falls is actually three waterfalls, the highest of which is 165 feet. At peak flow rates, over 45 million gallons of water passes over the falls per minute. Let me help you with that: one million gallons would almost fill a football field-sized swimming pool that is ten feet deep. During winter evenings, the mist freezes to create a drip sandcastle effect at the base of the falls which melts when the sun rises.
Many of the entrepreneurs I met were developing fundamental technologies, often addressing infrastructure issues in healthcare – not light-weight engagement apps. While accessing capital was a common complaint given only a few local funds, notably all of the entrepreneurs were scaling their businesses with quite modest burn rates and were knocking down important milestones. With great pride, many pointed to some of the significant local success stories such as PointClickCare (EHR provider for long-term care sector) which had raised $145 million and had nearly 1,000 employees. Some of the other companies cited were developing genetic computational systems or AI-based drug discovery platforms or other broad healthcare management platforms.
Perhaps this is not so surprising given the concerted efforts to strengthen the local healthcare ecosystem. In January 2017, the Ontario Bioscience Innovation Organization published a report highlighting a set of initiatives centered around (i) commercialization, (ii) local healthcare system engagement, and (iii) global engagement with leading multinationals. Such a dedicated effort so far as resulted in $109 million of capital invested in 45 companies and has seen those companies grow the combined employee base by 49%.
Contributing to this success was undoubtedly the broader technology ecosystem. Ontario is the second largest of the 13 provinces and territories in Canada. With 13.5 million people covering 415k square miles, Ontario accounts for 40% of the Canadian population but has 60% of the tech sector’s employment (2014 census data counted 280k tech workers). Over 810k people work in the healthcare industry.
The advent of a successful healthcare tech community often springs from the intersection of the established healthcare delivery system (Ontario has over 460 hospitals) with tech entrepreneurs looking to solve important healthcare problems. Pressing societal health issues also contribute to deep sense of mission. As in every other geography, aging population, chronic diseases and limited access to services drive the need for innovation. As of 2016, nearly 2.3 million Ontarians (that is a word) were over 65 years old (nearly 17% of the population). In 2014, 18.1% of the population smoked and 17.9% were defined as “heavy drinkers” – probably considerable overlap – according to Statistics Canada. Over 54% of adults were deemed overweight or obese; 21.1% of all children. These issues are not at all unique to Ontario. Recognizing this, the provincial government in its Action Plan for Health Care 2106-2018 aggressively advocated for resources to be moved to more community based models and away from acute care settings.
As I left Niagara Falls, I could not shake the stories of the 15 people who deliberately went over the falls, some in barrels (why a barrel?), some in canoes, some with just a life vest. Two people – Steve Trotter (1985, 95) and John Munday (1985, 93) – actually went over twice! As I studied the healthcare census data – 37.1% of males 20-34 years old in Ontario are considered “heavy drinkers” – I could not help but wonder what Steve and John had been drinking.