May 28, 2014

“Vancouver, the New Tech Hub” – and Why

Both Peter Cox and Ken Ohrn sent me links to this from BloombergBusinessweek:

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In addition to great views in a convenient time zone, Vancouver offers U.S. tech companies world-class talent, lower salaries, and few immigration headaches. …

(For) at least 87,500 engineers, developers, and others (who) couldn’t take jobs in the U.S., Canada welcomes any highly skilled worker who has a job offer, and salaries for tech workers are about 10 percent to 15 percent lower than in the U.S…

Microsoft opened a small office in Vancouver in 2007, when U.S. visa applications for the first time quickly surpassed the congressional limit. This month it announced plans to more than double its roughly 300-employee office in Vancouver, where video games have been the focus. There, Microsoft will hire and train 400 software developers from around the world to work on mobile and cloud projects. Jones says Microsoft didn’t choose to expand in Vancouver “purely for immigration purposes, but immigration is a factor.” …

Even with Canada’s more lax visa rules, American companies are still scrambling to hire the tech talent they need. “I’ve talked to the Amazon recruiter, who told me, ‘I give people an offer on the phone, and then there’s silence, and then they take it,’ ” says Boris Mann, founder and managing partner of Full Stack, an angel investment firm in Vancouver. “That doesn’t happen anywhere else.” Amazon says it competes for talent everywhere, including Vancouver. …

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  1. What’s the intended implication of the Amazon recruiter quote? I’m imagining the silence is “[How little do they want to pay me?!? oh well, I hear Vancouver’s nice.] Ok, I’ll take it.”

    1. I think the silence is: “Ohmigod, did I just score a job in the world’s most liveable city. Did I hear that right?”

  2. Must be the tech sector’s lower salaries that are driving Vancouver’s property values… FWIW, it’s not just the tech sector!

  3. That kind of labour cost differential has largely been the reason Vancouver has been “Hollywood North” for a number of years. Originally due to a lower Canadian dollar but in the era of a near-par $C the film industry advantage is more and more a result of subsidies by our provincial government, with matching tax breaks against other (cheaper yet) competing provinces.

  4. Maybe there will come a tipping point where there are more jobs in BC from the IT sector and other creative industries, than dumb, dirty resources like oil and mining… Which lets face it, is such a driving force of the BC economy that planning decisions are made first and foremost to favour port expansion and highway/bridge building.

    1. Every region has to exploit its natural advantage. For Vancouver that is primarily and/or historically ports, end of the road/pipeline/railway. Of course we also have nearby forests and ALSO scenic beauty on an ocean with mountain backdrops. As such it is popular with rich or even middle class upwardly mobile migrants that can chose to live wherever they want.

      That is why I live here.

      IT or software is s.th. that you can do almost anywhere, and you need a critical mass of universities, engineering firms, software firms, hardware firms and capital. While that exists in Vancouver (UBC & SFU, MacDonald Dettweiler, Hootsuite, Shaw, Telus, Rogers, .. see Top 100 IT firms here: http://www.biv.com/article/20140513/BIV050103/140519980/-1/BIV/top-100-tech-companies-in-bc-in-2014 ) it exists in many many other places in far greater quantities. I used to work for IBM and had my own software wireless firm after my initial software years in Burnaby at a BC Tel subsidiary. We did this out of Calgary and later Silicon Valley. To mind also comes Waterloo/Kitchener area in Canada, or Ottawa, but also Toronto, Edmonton or Calgary. The US has many such places, far bigger than Vancouver, also pretty: Austin or Boston (MIT), North Carolina, even Florida.

      So, is Vancouver attractive enough for IT ? Yes it is, but so are many other places where wages are higher and cost of living lower. The bike to work years are followed by “I’d like a house” years and that is tough in Vancouver all of a sudden. Ideally “I’d like to bike from my house” and that is really really tough.

    2. There are already more jobs in tech than all BC resource industries combined. You wouldnt know it from how much the BC gov talks up LNG and mining.

      1. Where is the proof ? Of course mining, forestry and even Starbucks has a lot of technology, too, depending on your definition of “tech” … Every desk worker using a PC is a tech worker ? Every barista ?

  5. Some perspective here…

    Amazon job openings, Seattle: ~4500
    Amazon job openings, Cape Town, SA: 36
    Amazon job openings, Vancouver: 18

    Of course, that’s just today, and things change. But lets keep our feet on the ground here…

    1. exactly. Of course I forgot to mention Seattle area (Microsoft, Boeing, etc.), Dallas Area .. Cape Town is very scenic too .. often there is a little too much navel gazing on “awesomeness” and “greeness” in Vancouver …

  6. Uh, how is this not good news? Amazon opening 1000 person office, Microsoft adding an *additional* 400 people in Vancouver, and an article in a national US magazine touting Vancouver as a new tech hub–helping to attract further talent? That’s great news! (And Amazon currently has 117 openings in Vancouver, not sure where you’re getting your numbers: http://www.amazon.jobs/location/vancouvervictoria-canada)

    The vast majority of those jobs actually do pay enough to live in here and afford to buy a condo in the city or a house in the burbs. The other half of the affordable housing equation is to increase the average wage in the city, which is exactly what these companies moving here will do. It obviously doesn’t solve all our problems, but I don’t quite see why people are reacting so negatively to this.

    1. You’re right. My search from yesterday didn’t find all the positions. But note some of those positions are in Victoria. And Cape Town actually has 54 positions.

      I work in hi-tech in Vancouver, so I’m quite well acquainted with the situation here. While we have a thriving, small industry here, we’re anything but a tech hub in North America. It’s one thing to enjoy the increased opportunities that companies like Amazon and Microsoft bring, it’s another thing to get ahead of ourselves and imagine that we’re in a position that we’re not.

      Just keep that Vancouver/Seattle ratio in mind. 117/4500. That illustrates our standing in North America hi-tech pretty well…

      1. Evidently, according my stats, many care Ron S. Indeed, that particular post, incremental Vancouver, is one of the most visited.

        However Ron I understand your frustration. There are huge problems in cities throughout the world and all we do is blather and gossip on our bosses time.

        Gord likes to invoke his old pal Ray S but both of them had their flutter and we are now struggling with the debris they left behind. Gord had a real run, hardly ever in Council, off on one tax payer TX junket or another: you’re too young to remember. I have yet to see the pay off!

        The loquacious Frank Ducote, another champion in abstentia of the minions at Thu Hall, resigned, gloriously announcing, from Bula blog and as it turns out, as you say of my work, no one cares. Oh dear how we attention seekers live in agony!

        Apparently the blogs are now aflutter with the new announcement by the Feds to terminate the millionaires free ride into Canada: and not a minute too soon.

        Vancouver is a small isolated debt ridden town in a debt ridded country populated by debt ridden people. Accordingly everyone is frustrated and angry like yourself.

        But hey remind them and, like you, they blow they go gaga.

        And although the essential problem of debt is in fact an international banking fraud issue no one dares mention on this blog: or indeed anywhere. No one has the foggiest notion what it is.

        So we merrily gossip on. My guess is most of the gossips are government employed or OAP’s.

        Funny how the cause and solution to so many issues we should gossip about are strictly verboten and if an aged ingenue like me tries to open up an urban solution, and indeed show it nauseam, the steam pressure blows your bowls out and your last nite’s half digested supper bloats all over.

        Oh well, the blogs have absorbed more than that . . .

  7. Actually an explanation is needed to help urban bogging neophytes sort all this stuff out.

    The form of the city as we know it today actually has its antecedents way back in the late eighteen century: the closure laws as they were know back then.

    In so typical a democratic habit, as we have come to know it, our over lords, then and now, decides the people are wasting the commons growing their own food and raising there own livestock.

    Hey, said the nouveau riche of the time, not unlike the nouveau riche of our time, hey we cannot have that. We can make lots of money on that wasteland the hoi polloi are farming.

    So off went the people and in came the surveyors, their stakes and their bankers and took over the commons and began to build their Grosvenor Squares, Pall Malls, and Piccadilly Circus.

    And so it goes today.

    Anyway, it’s getting late and I want to go watch telly. More another time when all this tax dodge gossip has subsided!

  8. I’m glad too see Vancouver’s tech industry get the recognition and support it deserves. The city is moving beyond being just the corporate headquarters for resource extraction companies.

    One of the key decisions made in the past few years was ensuring Hootsuite stayed here. They’ve become the heart of the Vancouver tech industry. They host all the meetups and support the local conferences.

    Having companies like Facebook, Microsoft, and Amazon open Vancouver offices might bring international press and raises Vancouver’s profile (as well as wages as the compete for talent), but its worth keeping in mind that these offices are mostly holding pens working around US visa restrictions. They mostly employ developers – you’d be hard pressed to find HR, finance, sales, or even product managers. That’s not as healthy for the local economy as companies based in Vancouver.

    I’m hopeful that as Amazon expands its Vancouver office, they’ll start adding more management and support staff. It would also be nice if they got more involved in the community.

      1. This is way more beneficial to Vancouver then the Amazon announcement was. Although digital media companies seem to be a bit less stable and more boom/bust then other tech companies (as seen with Pixar).