Ed Clark is former CEO of TD Bank
There seems little doubt today that success in building a knowledge economy will be a key determinant of Canada’s competitiveness and hence the economic well-being of our citizens. To win, we must create a great technical ecosystem, strong in AI knowledge and technical talent but also with an ability to grow innovative firms that are world competitive and grounded in Canada.
There are two quite distinct points of view on how to do this.
Some Canadians oppose welcoming foreign knowledge companies to set up operations in Canada. They worry that we will end up with a branch-plant knowledge economy. This is a legitimate concern that most actors in the system recognize. In blunt terms: Would we be better off if none of the major world players chose to come here? (This raises the question of what to do if they want to come here. Would we really make it illegal?) Would that improve the environment for our small firms to grow and be sustainable world-class players?
I think we would be worse off. If Amazon, Nvidia, Microsoft, Google, Uber, LG, Intel, Samsung, Facebook, DeepMind, companies from around the world who have recently decided to invest in Canada, chose to go to U.S. cities, we will see much of the same pressure on our talent pools as if they came to a Canadian city. The difference would be that our students would leave Canada and build family and friends in the United States. How many of the more than 300,000 Canadians working for foreign firms in the Silicon Valley move back home? They went there to have a career, a career that, at the time, they thought they could not have in Canada. Who gets the economic and tax spinoffs from those employees? Not Canada.
But how to build our own tech giants?
What is clear is that talent goes where there is the greatest chance of building a career. Joining Google or Amazon isn’t a life sentence. It’s a chance to learn, and then pursue other opportunities. For that, you want an ecosystem large enough that you have choices. We are building that type of ecosystem in Canada today. Public and private support for AI centres in Edmonton, Montreal and Toronto have not only cemented a role for Canada as one of the leaders in AI, but created a beacon for technology companies and employees to come to Canada across a broad spectrum of capabilities. As an example, Toronto added 82,000 tech jobs in the past five years. More than any city in North America. Importantly 55,000 of those jobs were filled by people coming to Toronto. The brain drain, which we have always feared, is actually a brain gain. Montreal has an equally exciting story to tell, as do Vancouver, Calgary, Ottawa and Edmonton. So while some are dismayed when they hear the almost weekly announcements of firms coming, I am delighted.
But we must also build up our small firms. We must continue to develop our homegrown supply of talent. That’s why Canadian universities are working together to greatly expand the number of applied AI graduates. We have to help our small firms connect to our larger firms to supply them with the new technologies they need. We must break open entry to government procurement, which is inherently biased to bigger firms.
Winning the knowledge economy war is also about making our industries more competitive. Small companies can play a vital role, by helping our steel industry improve the efficiency of its blast furnaces or by supplying self-driving robots to the Canadian auto industry. Making our firms more competitive creates jobs in those firms through growing exports.
Right now, Canada is winning in a war to build great ecosystems that attract talent and firms, and develop new companies. Canadians can beat the best companies in the world. Let’s welcome them here and, at the same time, grow great Canadian competitors. You cannot grow great companies by hiding from the world. Invite them here and build on the great ecosystem they will help create. And we will win.