There’s a hole you could drive a truck through in U.S. economic development  and immigration policy, which represents a substantial competitive advantage for Canada in furthering its own economic development and the growth of its knowledge-based industries.  We are presently in a unique position to exploit that gap in understanding to our own long-term benefit, and give rise to a substantial economic shift benefiting the Canadian technology industry (among others).

Case in point:  Recently, Microsoft announced they would build a research and development centre in Vancouver, and in turn use that operation to recruit and nurture smart people from around the world who were being prevented from entering the US due to immigration hassles.  Microsoft said it as plainly as they needed to:  they had effectively tapped out the supply of smart software people trickling out of U.S. universities, and thanks to increasing costs and constrains imposed by the U.S. INS,  it was just too difficult to fill that void with educated foreigners ; both  which circumstances put U.S. -based tech companies at a pretty significant disadvantage.

From the perspective of those seeking to put Vancouver on the map as far as software and product development is concerned, this served as a tremendous endorsement, and a opportunity which could be seized upon by the local tech community.

The conditions themselves, in turn, couldn’t really be better for any company big or small to operate a research and development centre in a Canadian city in general, when the strength of the dollar, the numerous government incentives such as SR&ED, and Canada’s liberal immigration policies regarding talented individuals such as Engineers.

These are conditions that Canada should capitalize on, specifically by relaxing further the immigration policies regarding software engineers and marketers, creating temporary work visas which can be turned around at the port-of-entry and can serve as a gateway to permanent residency (such as we have with NAFTA), and actively promoting the Canadian tech industry to workers abroad.

The benefits of these preconditions are obvious: diversity of talent equals an increasing wealth of ideas, knowledge, and research — which would ensure that tax credits like SR&ED pursue increasingly meritorious ideas and opportunities. It would also take advantage of a significant mis-step by our friends south of the border.

On my personal blog, I rarely restrain myself from criticism of the Bush government and US foreign policy. So my bias is well-known.. 🙂

As the US Economy is jerkily shifting from a decades-long manufacturing cycle, as the UK did through the 1980s, to a nation that generates the greater part of its wealth from intellectual labours, their leadership is ignoring the obvious: the country lacks enough talent to conceive and build this new intellectual, cultural economy.

It says something about Bush’s vision for America that while he posits an amnesty bill for the millions of illegal and largely unskilled immigrants coming from Mexico and Latin America, he imposes and reduces a cap on legal immigration visas for skilled workers, such as the H-1B.

They U.S. is turning away creative minds (including engineers) at the border, throwing millions of babies out with the bathwater, as they attempt to ebb the flow of “good” jobs being taken from America’s labour force and handed to foreigners. At the same time, those jobs are in turn being fully-outsourced to foreigners residing overseas, as companies attempt to cope with the fact that they can’t meet hiring goals for specialized positions.

In today’s market we compete equally for dollars and for workers on a global stage. When a company outsources its call centre, which uses largely unskilled labour, to India that should not be considered a problem for an advanced nation like the U.S. But when a U.S. company outsources R&D to India (or in this case, Canada) it should be considered a crisis. Microsoft’s move, from a U.S. perspective, is just exactly that. And it shows the grit which companies like Microsoft will go to route around the damage that is Bush’s immigration policy.

The Bush government, by limiting H-1 Visas and making it generally difficult to become a productive, creative resident of their country, has created a window which Canadians can and should exploit to bring talent to our nation: talent which will be trained and coached at the expense of U.S. companies, and will eventually spin out of these R&D centres and create their own new companies sparking new innovation.

This process can be exemplified by the number of Canada’s technology startups (meritorious or not) created by former Nortel executives throughout the last 10 years. That these have all represented a substantial increase in value for Canadian economic development, and the collective intelligence of our software community in general, would be tough to question.

With the quantity of resources available to technology entrepreneurs in cities such as Vancouver, the real challenge today is spending it effectively by hiring talented individuals.

So as our dollar approaches parity with the U.S. dollar making our salaries competitive, as our quality-of-life (particularly in Vancouver) far exceeds that of technology meccas like Seattle and Silicon Valley by all apparent measures, and as our government’s financial support for entrepreneurship continues to give a stage-to-orbit boost for many different ideas, the only pennies needing to drop really are a more sophisticated approach to valley-style Venture Capitalism and continuing expansion of immigration policies to support innovation.

With those two tweaks to our existing structure, a lot will change in the fortunes of Canada’s (specifically Vancouver’s) technology entrepreneurs.

In the meantime, bring more Microsoft’s to the suburbs of Vancouver. They will import some of Canada’s more brilliant Entrepreneurs and their co-workers at U.S. expense for our future benefit.

-Ian.