Neil Cawse: Lack of appetite for risk is holding the Canadian economy back

Canada possesses the essential ingredients for a thriving economic future: A highly educated workforce, cutting-edge technological capabilities and a strong global reputation.

Yet, if we are honest, a crucial element of our national culture holds us back from realizing our full potential. We find ourselves grappling with persistent concerns about productivity and the ability of our businesses to scale. From my perspective, the core issue is more deeply rooted: Our national appetite for risk.

Having come to Canada and built an organization from the ground up that has grown to employ thousands without external investment, I’ve witnessed firsthand the immense potential within our borders. However, I’ve also observed a pervasive risk aversion that extends far beyond those starting businesses. It permeates government policies, the lending practices of banks and financial institutions, and even the internal cultures of established organizations. To truly secure our economic future, this ingrained caution needs to evolve into a more informed and strategic approach to risk itself.

Canada excels at ideation. Our universities produce top-tier talent, our adoption of technologies like AI is promising, and our global reputation opens doors. However, the chasm between a brilliant concept and a market-leading enterprise is often bridged by a willingness to venture beyond the perceived safety of the status quo. We tend to analyze and deliberate, sometimes to the point of paralysis, while other nations that are more agile or simply more daring, seize opportunities.

So, how do we move forward pragmatically to cultivate a greater culture of risk-taking across all sectors?
 

• Implementing “second chance” policies: Canada needs to actively challenge the stigma and often-punitive consequences of business failure. We should explore and implement government and financial institution policies that offer reasonable pathways for entrepreneurs to learn from a failed venture and potentially access resources for a new, informed attempt, without being unduly hindered.
• Investing in risk literacy and management education across the board: Equipping individuals at all levels — from aspiring entrepreneurs to government officials and financial professionals — with the skills to understand, assess and manage risk effectively is crucial. Integrating comprehensive risk management principles into educational curricula and offering specialized training programs can foster more informed decision-making. This education must emphasize the critical distinction between “good”(calculated) and “bad” (reckless) risks.
• Championing smart risk-taking: Furthermore, we must champion smart risk-taking from an early age, encouraging entrepreneurial thinking in our schools and teaching the profound value of navigating uncertainty and learning from both success and well-intentioned failure.
• Adopting AI for productivity gains: We can’t afford to let risk aversion paralyze us on AI. Let’s be clear: AI is a seismic shift, a game-changer on the scale of the Industrial Revolution. Waiting for perfect data to prove its worth in every minute detail advances no one’s best interests. As we build a robust economic strategy, smart, practical AI adoption has the potential to deliver real, tangible improvements now. And for our teams, this isn’t about job losses; it’s about unlocking new potential. We need to clearly communicate the benefits, be upfront about the limitations, and invest in getting everyone up to speed. Sometimes, you just have to take a calculated leap, trust in the productivity gains employees share with you and you can see in your business, and move forward. That’s how Canada will win.

Canada’s economic future will be forged through a deliberate embrace of bold action. We must transcend our risk aversion and cultivate a national mindset that champions decisive execution and extracts wisdom from every outcome. By fostering a culture that values informed risk, broadens our perspectives, leverages AI, and equips individuals at all levels with sophisticated risk intelligence, we will ignite an era of transformative innovation, firmly establishing Canada as an independent global economic leader.

See the article in the Financial Post: https://financialpost.com/news/economy/lack-appetite-risk-holding-canadian-economy-back