I’m not sure why you’re upset with the CBC over this, we’ve been a branch plant economy since the 1960s. A lot of this has to do with Canadian temperament and mindset, which isn’t particularly entrepreneurial due a dearth of leadership from its investor class.
There have been many tech darlings out of Canada over the years (top of my head - Shopify, Hootsuite, Flickr, Matrox, ATI, BioWare, Eidos, iStockPhoto, Nortel, Corel, BNR, Cognos, Delrina, Hummingbird, Newbridge, Jetform, RIM/Blackberry, OpenText, Mitel, Newbridge networks, QNX, Sierra Wireless, SMART technologies, Redknee, PointClickCare, Solace) but often a reasonable exit lies with pools of capital outside of the country such as IPOing in the US capital markets.
Which gets to my confusion over your complaint. The problem with Canada over the last 50+ Years is that its capital holders are extremely risk averse and largely old money. That’s changing with recent funds, but it takes time for that to lead to improved VC and other funding. But we see this problem in every industry. A major chunk of Canada’s Oil and Gas interests for example are owned by foreigners. I’m not sure what your suggested approach is — Government subsidized entrepreneurship? We already have that to some degree.
Even in the USA we are increasingly seeing grads taking the FAANG paycheque instead of doing a startup. The stress and market barriers are too high to make it worthwhile relative to the alternative of making $150k at age 22.
I’m not sure why you’re upset with the CBC over this
The reason this is so infuriating is the congratulatory rhetoric rings hollow for many Canadians with US work experience who realize how much better it is, in so many (but not all) ways, to be a tech worker in the US vs. in Canada.
To produce articles with the tone of the OP, you would need to be either myopic or disingenuous.
This is especially so in the context of a company like Google. If you're a Canadian engineer who can get a job at Google, your take-home pay after housing will be dramatically higher in the US than in Canada (if you don't like the lifestyle sacrifices that requires in the Bay Area or NYC, you can do better in umpteen smaller cities). All the while you will have access to better health care, lower wait times, and easy immigration status (TN).
we’ve been a branch plant economy since the 1960s. A lot of
this has to do with Canadian temperament and mindset, which
isn’t particularly entrepreneurial due a dearth of
leadership from its investor class.
I certainly encourage young Canadian tech workers to move to the US for a while (as I did) to make some money and see what it’s like.
However, many of us eventually moved back. One of the better deals is to work remotely for US tech while in Canada, to get some of the comp benefits while living in a much better overall country (in terms of many factors - happiness, quality of life, life expectancy, inclusiveness, etc). This will be subjective of course. But I don’t think it’s disingenuous or myopic to be happy that these tech giants are growing in Canada. It keeps people here. Being here makes a difference.
Wherever you want to draw the line - R&D investment, industrial complexity, and product sophistication have been going down for the last 30 years and the major turning point was NAFTA, large scale migration, and the more globally oriented policies. Most it seemed pretty rational at the time (much of it still does) but now that we see the results, it's time to take a more nuanced approach.
There is a lack of investment capital available to companies based in Canada. Programs like IRAP and SR&ED don't help in any meaningful way.
Canada is a great country, but we've been underperforming for a while now and we should be a lot more concerned about that.
I think IRAP and SRED are okay, they just led to government picking winners (IRAP) and an awful ecosystem of vendors and abuse (SRED).
I’m of the opinion that Canada should take that money and do what Israel did with Yozma. Match the creation of VC funds with government capital and generous exit terms (e.g. government matches with 50% capital, is totally silent partner and can be bought out at any time with a 30% premium). I bet big VCs would jump at the opportunity and everyone would win (Israel actually saw a return in the end).
If people immigrate to canada instead of the us to work in tech, I would expect there to be more companies founded here eventually. Further, fewer caandians will go to the us if hiring rises. I can only imagine it will have upwards pressure on wages too, which will eventually help create a pool of people with some capital for angel investing.
I am against the narrative of this as equivalent to, or comparable to the Silicon Valley.
Of course, it is 'good for Toronto' in many ways, there's little doubt.
The Ontario government, during negotiations with Cisco for a juicy corporate subsidy, indicated that salaries are 'very competitive' and that they'd do 'anything to keep it that way'. Literally stating that he wanted to keep us 'poorer' to guarantee the jobs. (Sorry I can't find the reference).
From a certain perspective, it's understandable: Ontario's competitive advantage is 'a lot of decent tech workers with lower pay' so it makes sense to back that, after all, it's what brings the jobs.
But the very thing that provides a nice economic baseline of wealth (compared to most other countries), also severely limits our potential to be competitive in most areas. Basically, a gilded cage.
The problem with Canada's approach to the US and globalism in this manner is that it systematically reduces the ability of Canadian businesses to be competitive at higher levels.
A commenter noted 'that it brings tech jobs and they might go on to make startups' - which is a good point. But this won't likely be the case, paradoxically, the opposite.
Essentially, NAFTA/USMCA makes Canada an economic suburb: nice place, with basic prosperity, but lacking in exceptionalism and the ability to form groups that bring in real profits, excess surpluses, control, power & influence.
It seems like a paradox - shouldn't free trade, migration etc. make Canada more diverse and competitive? But it's not: Since NAFTA and 'globalization' and 'all of these jobs' ... Canada's expenditures on R&D has actually decreased. Have a look [1].
This in particular, is a disaster. Very important to note that public spending on R&D is not that low (i.e. Canada does good research at University level). And it's not so much that Canadian tech companies spend less on R&D' but it's that Canada produces less and less of the companies that naturally spend on R&D i.e. drugs, medical equipment, tech, etc..
Not only that, in the last 30 years, industrial diversity has actually been shrinking! Have a look [2] Canada isn't even in the top group anymore. Not only this, the sophistication of exports has been going down.
So therein lies the paradox: intelligent people keep saying 'these jobs are great, they'll help us move up the ladder', but it's not the case. NAFTA, large scale migration, other artifacts of globalization and Canada's peculiar history have meant that we get to go to a very 'good spot on the ladder' but actually going higher than that gets even harder.
The Canadian economy is increasingly dependent on Natural Resources and Auto Manufacture for export, and internally, it's driven by 'core businesses' like Finance & Insurance (especially mortgages), construction (again housing) and all of the other things that make a civic community work.
Basically, Canada is becoming a 'very well run civic entity' with less and less R&D spending, less economic complexity, less exceptionalism, fewer knowledge-based exports, and ever greater consumption of foreign products and service and it's the natural result of plain vanilla economic liberal policies, applied without really much thought to the special context of the country. Due to Canada's unique history and lack of its own institutional foundations, it means something different for us than say, Sweden. Almost all of Canadian media consumption is American. The vast majority of the products and services we consume are designed and produced elsewhere, usually in the US.
In order to 'get better' I think we might need a new approach, but I don't think that's what Canadians want - I think even popularity, most Canadians just want 'decent jobs, safety, their Toyota and Netflix'. And so a new Google office is perfect for that.
[1] https://policyoptions.irpp.org/magazines/april-2018/will-can...
[2] https://en.wikipedia.org/wiki/List_of_countries_by_economic_...
This was also a point made during the amazon pitch - cheap labour.
Actually Canada products a lot of decent tech people, most of which go south the US. The ones that stay, or the ones that immigrate here, mostly work for 2/3rd (or less) of the wages.
But yes, Canadian economy is mostly "rip and ship"; and that seems to apply to talent education as well.
As in total aggregate, I agree. On a per-capita basis, no. Some countries have a very healthy tech sector without being as large as in the US. Canada does not not need to have FAANG, just an F is enough.
An 'F' generally requires a critical mass of competitive expertise in certain areas, along with the 'F' (and smaller entities) to commercialize it. Basically an 'industrial hub'.
Sweden, Switzerland have F-like companies, but also the surrounding competitive base (and often direct participation of government) to support them.
Switzerland is very competitive in drugs, among many other things.
Interesting example: Sweden makes Fighter Jets (Grippon), maybe the most sophisticated of all product categories.
Making 'Fighter Jets' requires a highly specialized industrial base, and the investment/cooperation of government: Jet sales are done as much through the diplomatic corps as anything else. Policy is shaped around it.
But how did Sweden get there? Well, because they're a sovereign nation and have fought several wars with Russia, 'everyone serves' as part of their community requirements. In the 1960's tiny Sweden had one of the largest air forces in the world! So, out of this (and other developments), they have the ability to make advanced fighters.
So it's a panacea of cultural elements and underpinning institutions that enable exceptional entities.
The problem with what I have just described, is that it 'does not compute' in the American, neoliberal model. In America, entrepreneurs 'raise money' and 'make companies' and 'many fail, but some win'. This kind of neoliberal model is heralded as the 'true free-market solution', but in reality, it disproportionately favours very large countries.
Smaller nations have to play a different game.
The Canadian elite has mostly bought into the neoliberal model, even most 'progressives'. So Canada s a small country, caught up in playing from the American ideological playbook.
Canada is (often) to tech what Mexico is to cars.
Mexican 'assembly' of cars is fine and good, but they don't exactly move up the value chain from there.
Canada produces a lot of decent tech people, who will work for 2/3 the wages, unfortunately, this doesn't map to a successful entrepreneurial climate. Now, that's a hard thing to contemplate, as 'nobody' can really compete with SV at their own game, but it's disingenuous in the least to farm out labor and compare that activity with those doing much of the higher-level work, and most importantly: controlling the profits.
Maybe the Mexico analogy goes a little bit too far, as there are tech startups and a few decent companies in Toronto, by and large, but they have serious trouble scaling into anything. To be fair, it's not like most US cities are any better. In fact, aside from the weather and lack of charm, Toronto is a 'better all-around city' than most American cities.
But there's a serious lack of exceptionalism, and far too many of Toronto's best move on to the US, London, or elsewhere.
This kind of 'pathetic nationalism' is why loathe the CBC. It's as though they are utterly unaware of the extent to which they extoll mediocrity.
Canadians are well educated, get along pretty well, and the 'average person' in Canada in many ways lives better than the average American, at very least there's a lot less calamity, fraud, there's full healthcare which isn't great but it's mostly good.
But - on the issue of talent and exceptionalism, it's a disaster. We are near the bottom of the OECD it talent and R&D expenditures. Canada sends China 'raw materials' and they send us back finished goods: this is the opposite of 'first world/developing world' trading norm.
We should not be hailing mediocrity as a victory. It's nice to have jobs, but there is no Valley of the North.