Canada’s digital identity has a lot in common with a sibling rivalry. If you don’t carry the metaphor too far it basically characterizes the technology communities of the U.S. and Canada as a big brother – younger brother relationship. The U.S. and Canada share a lot; they have a rivalry; there is some dissatisfaction; and, in the end, they are both trying to figure out how to live together over the long haul. Canada is a hard-nosed younger brother with lots of talent.
About one third of Waterloo University’s software engineering graduates wind up going to work in Silicon Valley. It’s not that some of those engineers wouldn’t mind starting their careers in Canada, but the starting salaries in Silicon Valley are much higher. A typical software engineer can start his or her career earning $140 to $160 thousand a year in California. Few Canadian companies are willing to play in that price range.
There are hundreds of both, digital start up companies and established digital companies in Canada, but the attraction to the US digital world are strong. Many Canadian start ups wind up being purchased by U.S. companies and other Canadian companies actually migrate south of the 49th parallel into the U.S. -often into Silicon Valley. For example, Hootsuite, which is one of Canada’s most successful social media start ups is located in Vancouver, British Columbia, where it was founded in 2008 by Canadian, Ryan Holmes. The company now has over 300 staff members located in Vancouver, San Francisco, New York, Hong Kong, London, Sydney, Singapore and other countries. But Hootsuite is seeking 75 more software engineers and are they hard-pressed to find that many top-quality engineers available in Canada. They are forced to consider adding staff elsewhere, often in the U.S. where they can hire high-quality software engineers.
The types of digital companies that start up in Canada and stay in Canada tend to be either enterprise software companies that service other companies digital needs or digital marketing companies, which also service other companies needs. An enterprise software company offers purpose-designed computer software that is customized to the specific needs of a client company, school, club or government department. One of the largest enterprise software companies in Canada is named, Open Text, and earns over a billion dollars a year in revenue. The types of software services these enterprise companies offer are online shopping and online payment processing, automated billing systems, digital project management tools and many more. They are the back office work horses of many organizations.
Coping In A New Digital Environment
One of the ways Canadians are managing this new digital terrain is by flocking together as Canadians even though they work for different companies. In 2010 two Canadian living in North California started a Silicon Valley based mentoring and networking organization for Canadian entrepreneurs. The organization is called C100 and connects Canadian start ups, Canadians who work using digitally oriented skills such as software engineers and social media programers, and Canadian investment sources. The idea is to provide support for Canadians working in the digital sector, although since the organization is located in Silicon Valley, it tends to bring talent from Canadian incubators such as Bootup Labs, Founder Fuel and Extreme Labs down to Silicon Valley for networking events.
There’s a feistier side to Canada’s response to Silicon Valley. In May 2013 Canada’s minister of immigration, Jason Kenney, visited Silicon Valley to campaign for immigration candidates. He started his crusade by saying, “I think everyone knows the American system is pretty dysfunctional. I’m going to the Bay Area to spread the message that Canada is open for business; we’re open for newcomers. If they qualify, we’ll give them the Canadian equivalent of a green card as soon as they arrive.” He was, of course, attacking the American H1-B visa situation, which is the way America allows technical employees to come to the United States from elsewhere around the world.
The thing is, at the same time Mr. Kenney arrived in Silicon Valley a large billboard was unveiled off highway 101 on the route South out of San Francisco to the heart of Silicon Valley. The billboard directly addressed any newly arrived foreign technical workers and encouraged them to head to Canada where they would receive better immigration support. Here’s what it said.
There are six technology centers in Canada, three of which are located in: Vancouver, British Columbia; Markham, Ontario; Kitchener-Waterloo, Ontario and are home to a lot of digital companies. When you look at who’s in these centers, you find foreign companies such as, Sun Microsystems, Lucent, Apple, American Express, AMD Graphics Product Group, Sony Pictures Imageworks, Google and Motorola. Canada’s digital companies are there also, but there aren’t any Canadian companies as large and dominant as the foreign companies.
So what does the future hold for Canada’s digital cycle? It seems their strategy is to play with house money. By continuing to operate as Silicon Valley’s northern satellite, making direct connections with U.S. firms in many ways, Canada builds a rich technical sector in their labor force. In time, one of the start ups is likely to grow huge and become a dominant player in its niche and also stay home in Canada. In the meantime, in order to hedge every technical bet they can, the Canadian technical and financial communities have also built on their British connections to foster opportunities in England and Europe at the same time they leverage connections in the U.S.