Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 337

Canada has a lot going for it :

By land mass it is the second-largest country in the world, with the longest coastline. Bookended by the vast Pacific and Atlantic oceans it has enormous trading advantages, alongside access to the largely untapped Arctic to its north. It is a net energy exporter; it has the third-largest proven oil reserves and is the fifth-largest producer of natural gas — but it also boasts large deposits of critical minerals vital to the green energy transition. And, of course, it borders the world’s largest economy.

And yet :

By purchasing power parity, its economy is ranked 15th globally by size, behind the likes of Turkey, Italy and Mexico. The OECD has forecast Canadian per capita gross domestic product growth up to 2060 to be the lowest among advanced nations.

The problem :

Poor productivity is at the heart of the country’s growth challenges. In an hour a Canadian worker produces just over 70 per cent of what an American can — that’s below the euro area and even the UK based on 2022 data. Many would have expected the resource-rich economy to benefit as globalisation powered forward, but its relative labour productivity has actually slipped since 2000.

The solution is probably a simple one: We need to innovate, invest more in R&D, and create stronger links between research and Canadian businesses. But executing on this has proven difficult :

Enormous efforts have been made to understand why businesses in Canada invest so much less in R&D than their counterparts in the U.S., much of Western Europe, South Korea and Japan. Is it our reliance on the export of natural resources and agricultural products? Is it reduced incentives to innovate for our heavily regulated and profitable oligopolies in sectors such as banking and telecommunications? Is it our decades-old reliance on incentivizing industrial R&D through federal and provincial tax credits?

It's hard to imagine a more important topic affecting all Canadians. So I would encourage you to read this recent opinion piece by David Naylor (president emeritus of the University of Toronto) and Stephen J. Troops (president of the Canadian Institute for Advanced Research).

It's a balanced piece. Neither of them are arguing for "empty credentialism" or for research that remains in academia. What matters is what we do with the work that our smartest minds are doing. And the overarching point is that innovative research needs to find demand within Canadian businesses.

Right now, we're very bad at this. That needs to change.

Chart: Globe and Mail

I watched the BlackBerry movie the other week and right away I thought, "whoa, is Jim Balsillie really like that?" Supposedly, kind of . Either way, it was a good movie that naturally ended with the fall of BlackBerry, with Balsillie not getting an NHL team, and with Mike Lazaridis dismissing the first iPhone as a toy. "Who wants to use a phone without a keyboard?"

We all know these stories. In fact, they feel trite in retrospect. There's Blockbuster, Kodak, and countless others. But these moments are clearly a lot harder to identify in the moment. And today, at least for me, it feels like this moment for crypto and blockchains.

It's easy to dismiss this space. Among other things, a blockchain is an objectively worse database . They're slower than today's alternatives. They require more computing power. There's no customer service when something goes wrong. And, it generally costs a lot more to save new information to a blockchain (this cost is called a gas fee).

At the peak of the market in 2021, the average quarterly gas fee (cost per transaction) on the Ethereum network reached about US$37 . Given this, nobody wanted to use this database to buy a $2 coffee. (However, many people were, at least at the time, willing to use it to buy expensive NFTs.)

But as Tomasz Tunguz outlines in this great post called "Gas Gas Revolution", the cost of saving data to a blockchain has dropped dramatically over the last few years. And all signs indicate that this trend is only going to continue. So what happens when it becomes cheap/basically free to save to these worse databases?

Well, if you believe that "decentralized" and open databases are going to unlock powerful new innovations, the correct answer is probably: a lot. And then all of a sudden, they'll be better databases.

There’s no real secret to having a vibrant food truck and street vendor ecosystem. You basically just need to allow it, and then get out of the way and let entrepreneurs do what they do best.

When I went to grad school in Philly, I used to eat from food trucks all the time. I could get a breakfast sandwich and coffee in the morning. I could get a burrito for lunch. And I could get a vegetarian lasagna for dinner. There was no shortage of options.

This same kind of ecosystem does not exist in Toronto, but it’s only because we’ve decided we don’t want it to.

Images: New York City