Carl Rodrigues is the chief executive officer of SOTI Inc.
The Global Startup Ecosystem Ranking lists three Canadian cities – Toronto, Vancouver and Montreal – in the top-20 locations to found a startup. But while Canada excels as an incubator for startups, our country's ability to scale them up into mid- or large Canadian-owned organizations has a less-than-stellar track record.
Startups are founded every day in both Canada and the United States. Yet while U.S. startups grow up to be Google, Amazon and Uber, Canadian startups typically get sold to the highest American bidder. So how can the Canadian government nurture the next Google? It starts with creating an ecosystem for building Canadian brands and keeping our world-class tech talent in this country. Front and centre in building successful Canadian businesses with staying power is developing and retaining our talented engineering pool. It has been, and is, a tremendous challenge to build businesses and brands in Canada. Virtually every Canadian company has lost key employees over the years to U.S. companies and has had work permits for highly talented foreign workers expire or be revoked. In short, the issue simply hasn't had the focused attention that's needed in this global and highly competitive economy. And yet Canadian companies want to invest in our country and its people. For example, my company is investing $150-million in new job creation over the next three years.
Canada is a breeding ground for the best technologists the world has to offer. Yet there is a monumental shortage of software-engineering talent here, and Canadian tech companies are struggling to stay competitive owing to the lack of available talent. Why is it so easy for the United States and other countries to take our talent, but so difficult for us to attract and retain it?
It's important to recognize that scaling up our businesses and cultivating the next great Canadian tech success story requires the best and brightest in the world. To really scale up, we need the best talent. Google calls people with these traits "smart creatives," because business gets created by their output. They are the catalysts. Without smart creatives, we cannot create and foster thriving tech companies in Canada.
Until we can minimize brain drain, it's critical that we encourage the attraction of top international talent here. Such highly skilled immigrants will help to create more jobs for Canadians by contributing back to the economy, essentially acting as a multiplier. By working and investing together, Canadian tech companies and government can minimize the exodus of Canada's best and brightest to the United States and elsewhere. While tech businesses must continue to steadily increase jobs that challenge the highly skilled and educated, the federal government must continue to enact policies that encourage Canadian entrepreneurs to focus on building long-term companies rather than cashing out. And until we have succeeded in putting an effective seal on the brain drain, we must also collectively encourage policies that help us bring the best and brightest international talent here to fill our talent pipeline shortfall.
Canadian companies must be committed for the long haul to cultivate growth and keep jobs here. A sad truth about Canadian startups is that most eventually make an exit, typically bought out by a larger, richer U.S. organization. When Canadian startups sell this way, their founders, engineers and other "smart creatives" who understand and drive a company's vision tend to leave, for a variety of reasons. These exits slowly but surely sap the life from Canadian business. Even when startups get sold and merged into large multinationals, the vision, passion and guidance of key minds is lost, more often than not. I have watched this real-life movie play out more times than I can count over the years. The fix starts with retaining and providing tangible incentives to encourage our tech talent pool to stay in Canada. Right now, this talent is being lured to Silicon Valley by better compensation and more favourable tax brackets.
Supporting a thriving tech sector is critical to Canada's innovation economy, which is rooted in the amount of intellectual property we own – IP is the currency of the future. Keeping talent satisfied and productive inside our borders is essential.
It's not too late. We don't have to give up and give in to the nimbler U.S. entrepreneurial scene. Canadian businesses and governments at all levels must join forces for a long-term strategy to solve the core issues around brain drain and keeping our IP in Canada. Our collective future depends on it. Losing our best and brightest "smart creatives" means we will lose at this global competition – and as Canadians, this is something we just cannot afford to be nice about.