In the News...

David Raffa 

It's time to spread the word that Canadians lead the world in technological innovation

On behalf of the B.C. Technology Industries Association, I recently hosted a seminar entitled "Canada -- the northern tiger: This is not the country you thought you knew." The purpose was to draw attention to the competitive advantages of building a technology company in Canada. The story it presented was compelling.

One of the presenters was Leonard Brody, formerly a vice-president of Onvia Canada and currently chief strategy officer of Ipreo. Brody has dedicated himself to delivering the message that per capita, Canada is the greatest producer of technological innovation in the world.

Brody likes to point out to U.S. investors that if they are not currently looking at Canadian companies, they are making a big mistake. Brody noted that Canada consistently ranks in the top 10 of entrepreneurial economies around the world. Canada has the highest per-capita enrolment in post-secondary education, eight of the top 10 business schools and 18 of the top 40 engineering schools. In addition, Canada has the highest computer literacy rate in the G-7 and is fourth in availability of skilled labour (compared to the U.S., at 24th). The data support what many of us believe -- we offer an unparalleled pool of highly skilled and entrepreneurial labour.

It doesn't end with our labour pool. James Topham of KPMG presented the results of a study his firm conducted that covered 115 cities in nine countries, including Vancouver. The study examined more than 1,000 businesses and analysed more than 30,000 items of data. The objective was to compare the after-tax cost of start-up and operation for 12 different types of businesses over a 10-year period.

Ranking all of the data and using the U.S. as the benchmark, the KPMG study ranked Canada well ahead of all nine countries in overall competitive advantage. The U.S. was third-worst, ahead of only Germany and Japan. Ahead of the U.S. but behind Canada were the U.K., Italy, Netherlands, France and Austria. On a micro-economic level, the data showed that Vancouver offers an extremely attractive cost of doing business, 40 per cent less than Seattle and less than half of the cost of Silicon Valley.

Leaving aside the intangibles, there is also the quality of life and convenience of location. Dan Gelbart, co-founder of B.C.'s most successful locally founded and grown technology company Creo, left Israel to come to Vancouver to pursue his dream. When quizzed as to why, he remarked somewhat tongue in cheek that it was because of the favourable weather and the stability and civility Canada was known for.

Glenn Ballman, founder of Onvia and one of our most successful technology entrepreneur exports to the U.S., continues to look for opportunities in Canada for many of the reasons noted above. He was extremely bullish on the ability for Canadians to succeed. He noted that our convenient West Coast location puts us in the same time zone as the Valley, as well as being a very short flight to Seattle and a quick one to San Francisco as well.

Finally, we mustn't forget that Canada also offers a plethora of government incentive programs to directly fund technology growth, such as IRAP, SRED and TPC, and a number that help raise investment capital for growing companies, such as the VCC program and labour-sponsored funds.

When all of these competitive advantages are considered, we can make a compelling argument that not only should we not apologize for building a technology company in Canada, we should champion it. In fact the message at the seminar was that we should be doing more to market our competitive advantages.

Entrepreneurs building companies locally should ensure that they take full advantage of the competitive features that Canada has to offer, and when pitching U.S. investors they need to make these data known as they are clearly an advantage.

On the flip side, the local industry needs to get this message out to U.S. investors to help attract more investment capital to Canada. Managed correctly, this is a win-win situation for both companies and investors.

David J. Raffa (draffa@catalyst-law.com) is a partner of Catalyst Corporate Finance Lawyers (www.catalyst-law.com), and the partner responsible for Catalyst's Launchpad Program. He is also a member of the board of the BCTIA and chair of its Capital and Investment Committee.