By this I mean the nation has a notorious ‘Innovation Gap’ and lament a lack of Venture Capital as the reason, but really what is missing is a general culture of innovation and better processes for early stage commercialization. Most important it needs a tech sector policy because there isn’t one.
In absence of these things Crowdfunding offers a “system of the people” approach, like Napster or EBay, and so it’s not dependent on government policy or even funding, it could be entirely self-generated, and most likely will be.
It’s important for Canada because Crowdinvesting isn’t about replacing the traditional VC or high-street bank, but rather it’s about leveraging the Internet for new markets especially those at the grass roots level; lots of little projects of all shapes and sizes.
This is actually what Canada needs more so than the VC part, which is going to be really difficult to pull off to be honest. In contrast a Crowdfunding platform is easily implementable for affordable venture rates and could support a lot of active Canadian ventures.
It’s a business model that becomes particularly explosive when you combine it with other high-yield trends, most notably Open Data.
This is data that generates lots of little ‘micro-applications’, which would therefore be ideal Crowdfund projects. In the case of NYC and their Cloud/Open Data strategy, the most compelling point was that new Venture Capital was attracted as the result of only publishing Open Data.
By doing so the government enabled a new set of apps that didn’t previously exist, and as they do, smart investors saw that made real good sense and start throwing in a few million here and there, as the USA investors like to do. The end result? New public sector IT, funded by private investors.
If you could also fund the mass market of them through Crowdfunding, then that’s a radical opportunity for Municipal and other government CIOs. I.e. A whole new generation of modern (e.g. mobile) applications that are funded through dynamic economic activity that stimulates growth, creates new startups (who hire the most new jobs), … and so on..
I.e. then also >> New public sector IT, funded by public investors.
How you might go about encouraging these types of applications is nicely conveyed by my favourite Open Data article – Monetizing the Margins.
In this piece Nicholas describes a great little ‘mini business planning’ process that would make a great start-up template for others, and also because the concept itself, of pushing more money out to the periphery of society, is the most compelling political idea that’s missing from any major party platform.
Like many other countries Canada has an inherent social poverty issue, as described by relevant campaigning organizes like Campaign 2000, highlighting how like the Innovation Gap, Canada also has a Social Innovation Gap. They’re placed position 24 out of 35 countries for their Child Poverty Rate.
This general lagging effect across many policy areas is no surprise.
Canada as much has aging policies as it has aging IT systems, including inadequate ones for addressing the issues that Campaign 2000 clearly identifies. The current programs to help those in social need are long out of date and entirely inadequate, and so not only has the problem persisted it’s actually gotten worse.
“Open Data Ventures” are a great way to tackle all of these issues in a broad manner – It’s modernizing policy models directly as innovative new IT is created and implemented, and of course, has been funded by new sponsorship models. Heck we may not even need the government, eh!
The best new social innovation policies tend to be driven by more, ahem, anarchic motivations that wouldn’t necessarily be that compatible with the Canadian psyche, so encouraging it through software is a great idea! 🙂
So to finish up, the key idea therefore is that Crowdfunding can be married to Social Innovation ambitions and programs, defining Social Crowdfunding; using best practices like Monetizing the Margins and equipping them with Open Data, great stuff will happen..