Tech isn’t just moving out of Silicon Valley, it’s moving out of the US
There have been a number of stories recently on tech companies preferring various US cities over Silicon Valley. The trend now goes further than the US with Canada soaking up a significant portion of startup investment.
In many ways, Silicon Valley hasn’t made much sense as a destination for startups to grow for a long time. Initially it did, as San Francisco was the home of US 60s counter-culture; the proponents grew up, had ideas, and made their own little world in and around San Jose. Here they could group together with like-minded folk – as Steve Jobs and Steve Wozniak did – and hammer together those new-fangled “computer” things.
But as time has moved on and the success of Silicon Valley has become globally emulated, having a tech hub outside a major city – thousands of miles from a political hub, financial district, or global business centre – has made less and less sense. London, for example, has long been known for its FinTech scene, partly because it’s one of the only major cities in the world which plays host to a financial and technical nexus.
As tech began seeping out of Silicon Valley and into other cities, perhaps because they’re cheaper or better endowed, along came Trump. His anti-immigration rhetoric has been consistent and fervent. Tech companies are reliable in their opposition to any constriction on immigration he seeks to pass, having benefited from attracting some of the world’s highest-calibre talent thanks to immigration.
This has all been coming to a head for a while now, with Canada poised in anticipation. I mean, it makes all the sense in the world, does it not? Just as developed as the US (or more so) but with cheaper land, affordable healthcare, increasingly better border policies, generally more outward-looking, and, as of 2015, possibly the only really popular global leader! Canada is poised to take on a better trajectory than other developed-world options, even Europe is so fraught with infighting right now it seems unable to pick its head up.
The plan has worked, the stats are in, and this is even before Canada announced a program to slash its waiting times for work permits and temporary residents visas from a year to two weeks. Vancouver, for example, has already popped its head up as being the cheapest place for startups to set up shop.
The tech, and in particular, the Software as a Service (SaaS) industry in Canada’s capital, Ottawa, is growing at an unprecedented rate, attracting big funding and business acquisitions that recruiters like Invest Ottawa are scrambling to meet the demand.
And US investors are looking north, across the border, as potentially the best home for their money. The SaaS market, in particular, is receiving a heavy share of funding. Ottawa’s L-Spark SaaS accelerator made a very comprehensive infographic on the subject (see below).
The tech sector is packing its bags and heading out; will other sectors follow in its wake?