The brightest talent needs the biggest stage. For generations of Canadian tech workers that’s been more than a cliché, it’s been a career ethos – one that invariably led south. Over multiple decades as an entrepreneur, I never experienced a time when Canadian ventures weren’t seeing their top people poached by firms in Silicon Valley, Boston or New York.
That is, until now.
The north-south brain drain of tech talent is finally being reversed. We’ve seen hints of this trend over the last couple of years, but a new survey by MaRS provides clear evidence. Of 100 high-growth Toronto-region tech firms polled, 53 per cent saw an increase in international job applicants between 2016 and 2017. Some saw a doubling or, in a few cases, a tripling of candidate interest from outside Canada.
Follow-on effects are also becoming evident with recent news that Collision, one of North America’s fastest-growing startup conferences, has decided to relocate to Toronto from New Orleans. It’s clear the city’s tech star is rising.
While a recent study by Munk School of Global Affairs’ Innovation Policy Lab argues that computer engineering graduates are leaving for jobs in Silicon Valley, Toronto is starting to benefit from American policies, as more senior international candidates become less willing to gamble their futures on the increasingly uncertain H-1B visa lottery (the H-1B permits U.S. employers to hire foreign workers in specialty occupations). But the brain gain has homegrown causes, too. I see three main drivers:
Talent follows talent
Canada has long been home to world-leading researchers, such as Geoffrey Hinton at the University of Toronto and Yoshua Bengio at Université de Montréal who were instrumental in the latest advances in artificial intelligence. Their labs attracted ambitious and talented machine-learning experts who wanted to work with the best. Canada is now moving strategically to leverage this strength with initiatives such as the Canada 150 Research Chairs Program, which has brought 24 top international academics to our shores, and the newly established Vector Institute, which will attract more students of artificial intelligence.
The diversity dividend
The best engineers can come from the Middle East or South Asia or Latin America or anywhere. At a time when nationalist sentiment is rising on both sides of the Atlantic, our urban centres’ diverse population and accepting atmosphere are important strategic advantages to attract this talent. The diverse population is also an important asset for developers, who need access to unbiased datasets that are rich in ethnic and cultural diversity to train their algorithms to make sense of the world.
Talented people are also coming here because the region is focused on socially beneficial verticals, such as health care, population aging and clean tech. From a recruiting perspective, the region’s culture represents an important point of differentiation from the direction Silicon Valley has gone of late.
But ask any venture founder and they will tell you what I also learned as an entrepreneur: Talent alone doesn’t guarantee a win. It is a necessary, but insufficient condition to create global companies.
To really capitalize on this influx of talent, Canada needs to surround it with the other elements of the innovation supply chain: global partners and capital.
Toronto’s tech ecosystem needs to continue attracting global firms such as Samsung and Uber, and working with innovation-focused Canadian corporations such as RBC, which has set up Borealis AI, an artificial intelligence research arm.
But, more urgently, it also needs to grow the supply of capital that fuels company growth. Although Canadian venture capital investments have increased strongly in recent years, reaching $3.2-billion in 2016, our companies are still trying to scale with much less funding than their U.S. competitors. To close this gap we need to continue attracting venture capital investors, but also look to new sources of global capital.
Obvious pools of untapped potential are Canada’s enormous pension plans and global corporations, which are holding significant reserves on their balance sheets. In the past, with a few notable exceptions, these funds have stayed on the sidelines of the innovation economy because they’ve deemed tech ventures too small and too risky. But if the story of the current digital revolution has a punch-line, it’s that tech innovation disrupts industries in unpredictable ways. These funds’ portfolios of private equity and infrastructure investments are so huge that they have broad exposure to the effects of disruption. There’s a strong argument that investing in growing tech ventures is a strategic imperative that would drive an asset class with outsized financial returns, while also inoculating their existing portfolio investments from disruption in the long run.
I’ve always believed in the model of being the fast follower, rather than first in. Toronto region has the opportunity to drive the innovation ecosystem in a different way than Silicon Valley has. But this moment won’t last indefinitely. In my view, we have three to five years before the America First movement uses up its energy and the U.S. starts to change course on immigration. We have to ensure that when it does, Canada’s tech stage is big enough to keep attracting the best and brightest.
Yung Wu is CEO of MaRS Discovery District