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Who needs Silicon Valley for tech investing?

The CN Tower in downtown Toronto.

Michelle Siu/The Globe and Mail

Everyone would like to get in on the ground floor of the next Silicon Valley breakthrough, but technology investment lawyer Ian Palm thinks people should look inward – to ideas more than places.

"I was in Silicon Valley just last week," says Mr. Palm, a partner at Gowling Lafleur Henderson LLP in Toronto. "I go there a lot and it's amazing. But from a Canadian investor's standpoint, I think we're naive to think we're going to create a new Silicon Valley in Canada. We don't need to."

There are lots of regions with technology clusters, he says. They're all over the world, in places like Boston, Taiwan, India, China, the Baltic region, Cambridge, England, Ottawa and Waterloo, Ontario.

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Rather than searching in different countries for undiscovered investment opportunities, the better way is to look in regions you know and see what is being researched and developed, he says.

"I'm optimistic when I look at the companies around the University of Waterloo [beyond BlackBerry]," Mr. Palm says. "And people forget that Toronto is a really strong hub. There are probably double the tech opportunities in and around Toronto than anywhere in the country – in mobile technologies, life sciences, opportunities around financial services and so on."

Mr. Palm says the federal government's Venture Capital Action Plan, announced by Prime Minister Stephen Harper in January, is helpful for Canada's tech sector. The plan puts $400-million of federal money into new capital over seven to 10 years, which will go toward setting up or recapitalizing venture capital funds that can invest more private money in new ideas and companies.

Any area in the world where there's a concentration of innovators, financial advisers and researchers is likely going to be fertile ground for tech companies, Mr. Palm says. He is less enamoured of the big research centres set up and promoted by governments, though. "There are too many of them," Mr. Palm says.

The hottest opportunities aren't always in apps or video games, Mr. Palm adds. As examples of where technology is headed – and investment may follow – he cites other areas. For example:

• Medical devices – advances in everything from hearing aids to surgical material that goes into hip and knee replacements

• Nanotechnology – research and manufacturing by manipulating molecular structure

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• Energy technology – clean energy, storage, new ways of building and maintaining energy infrastructure

• Unmanned vehicles – cars and trucks that drive themselves on the highway

• Wearable computing – smart devices embedded in clothing and, at some point, in the body

• Big data – deploying the "industrial internet," linking data and computers from sources around the world through the computer cloud so that they can share information and interact

• Data analytics – new technology that can track and analyze people's interests and behaviour as they go online to read, communicate or shop and as they use their smartphones.

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