The $1.3 billion annual investment that Ontario’s government announced in February to fund the province’s Student Grant program might help many an aspiring tech worker attend the University of Toronto or Waterloo, but it won’t keep them in Canada after graduation, founder, president, and CEO of Mississauga-based enterprise mobility management software firm SOTI Inc. Carl Rodrigues says.
That was the central conundrum raised by Rodrigues’s recent Globe and Mail column, in which he asked, “Why is it easy to poach Canada’s talent, yet hard to poach the world’s?”
The answer, Rodrigues admits, is deceptively simple: government and the IT industry must work together to develop exciting opportunities and working conditions that rival those offered by the sector’s American counterparts, while opening Canada’s borders to the types of immigrants who will create those opportunities in the first place.
“In any economy there are two players,” he says. “The businesses who create the jobs, and the government that supports the businesses. So we’re basically partners, and it’s a cliché, but if we’re going to stop this brain drain, government and businesses have to work together.”
Ensuring graduates remain in Canada
One of the more dramatic example of Canada’s brain drain, of course, is the number of graduates from Canadian tech programs who are recruited by Silicon Valley, where an estimated 400,000 Canadians already work: in fact, a 2015 Startup Compass report found that graduates from the University of Waterloo are the second-most frequently hired by California tech companies.
If Canada’s government wants to reverse this trend, Rodrigues believes it could do worse than offering grants to help Canadian tech companies match the competitive salaries offered by their American counterparts.
“Imagine that I’m building a part for a machine,” he says. “I could rent a cheap warehouse space and set up an assembly line, but in this space, I’m competing globally for the best parts. Imagine what I can create if the government helps me afford them.”
Canada’s private sector, meanwhile, would be well served by creating spaces for young graduates to conduct the type of research that could lead to something groundbreaking – or end in an explosion, Rodrigues says.
SOTI itself has funded a research lab in Waterloo where, Rodrigues assures ITBusiness.ca, both outcomes – the occasional paradigm-changing breakthrough, in addition to ones that blow up – have occurred.
Another effective strategy that Canadian companies could use is one popularized by their American competitors: creating an engaging workplace.
In fact, SOTI has committed $150 million to building a new campus at its Mississauga headquarters, with basketball courts, an outdoor ice rink, fitness, sauna, and volleyball facilities, among other features.
“We want people to feel like, ‘this is a cool place. I’d like to work here,’” Rodrigues says. “We’re trying to put our money where our mouth is and use some of these strategies that the American companies are using right here in Canada.”
Attracting ‘smart creatives’
Another important step the government could take to reverse the brain drain, Rodrigues says, is opening Canada’s borders to immigrants with certain skills so that its startups can hire the talent they need to expand.
“Some employees are what we call ‘smart creatives,’” he says. “Because if you manage to hire one of them, whatever they end up doing will create 50 or 100 more jobs.”
Rodrigues knows firsthand the value of smart creatives, since early in SOTI’s history – the company was founded in 1995 – he could not find the software engineering specialists he needed to grow the company beyond 25 employees – so he began recruiting from overseas, ultimately finding some 20 engineers outside Canada’s borders, most of them from the Ukraine.
“We have a lot of skills here in Canada, but there are shortages,” Rodrigues says. “And you can’t leverage the other skills – marketing, sales, business development, legal – until you fill those shortages.”
Moreover, many of those engineers retain leadership positions within the company, Rodrigues says. Today, SOTI employs some 600 employees in 22 countries worldwide, delivering its services to customers in over 170 countries.
“There are a tonne of people all around the world who’d jump at the chance to come to Canada, and I think we have to leverage that to our advantage,” he says. “People sometimes wonder if immigration takes jobs away from Canada. I can assure you firsthand: It actually creates them.”
Keeping Canadian companies in Canada
Finally, it’s important for Canadian companies to own and ensure their IT operations remain in Canada, he says.
“IP is the currency of the future,” Rodrigues says. “The U.S. generates over 60 per cent of its GDP from IP-based technology, and in my mind, it’s the countries that have the most IP that are going to win.”
Too many tech startups are grown in Canada and sold to U.S.-based companies or venture capital firms, he says, which is far from being in Canada’s best interests.
The same goes for when an American entity such as Google Inc. parks itself in Canada, essentially stealing from nearby Canadian companies, Rodrigues says.
“IP that would have been created inside a Canadian company is now being created inside an American company,” he says. “And eventually Google, or Microsoft, or whoever, turns around and creates a product that they sell in Canada, and their revenues from that product go into the U.S.”