Tech sector CEOs whose cities were overlooked say they’d have welcomed Amazon HQ

January 21, 2018
Category: Uncategorized

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Tech sector entrepreneurs whose Canadian cities were snubbed by Amazon in its search for a second corporate campus say they are disappointed, despite fears they would have seen increased competition for scarce skilled talent.

They say the American online giant’s promised contribution of $5 billion in construction and up to 50,000 high-paying jobs would have been good for their city’s economy and its technology sector in the longer term.

On Thursday, Amazon said Toronto was the only non-American city to make a list of 20 finalists.

Vancouver, Edmonton, Calgary, Winnipeg, Sault Ste. Marie, Ont., Windsor, Ont., Hamilton, Ottawa, Montreal and Halifax also made bids.

‘Another company competing for limited talent’

“In the short term, it’s another company competing for limited talent, that jumps to mind,” said Mike Johnston, founder and CEO of REDSpace, a designer of media software systems and corporate e-learning programs in Halifax, one of 238 cities to bid for the centre.

But, he added, “when a world-calibre company pays attention to this region, I think the trickle-down effects are valuable. It means more students come here to study, it means more people stay here.”

Johnston said his firm has nearly 200 staff members after adding 45 new hires last year.

He said he was part of a “brain drain” that left Nova Scotia for better opportunities in the United States after high school before returning in 2000 during the dot.com tech stock meltdown.

Like Johnston, Benevity Inc. CEO Bryan de Lottinville said he was disappointed but not surprised that his hometown of Calgary failed to win its bid for the Amazon HQ.

His company, which makes software for corporate charity programs, has nearly doubled employment in the past two years to 420, but he says he’s not worried that Amazon would have stolen his staff or driven up wage levels.

“You know, people don’t work for companies, they work for the employee experiences and leaders and things like that,” he said, adding that to be frightened of competition is “not how you build business, an identity and a brand.”

De Lottinville said he supports economic diversification initiatives to help Alberta’s economy evolve from a dependence on oil and gas production.

Landing Amazon would have been ‘a double-edged sword’

In Ottawa, CEO and co-founder Jason Flick of You.i TV, says Amazon would have been a disruptive force for employment, real estate and local cost inflation — but he still wished they had chosen his hometown.

“There would be a double-edged sword for sure,” he said. “The fight for talent would go higher. The U.S. dollar is stronger to pay more. Building space would be at a premium. But I was definitely looking forward to it.”

Amazon says its second headquarters would require $5 billion in construction and would employ up to 50,000 people in high-paying jobs. (Richard Drew/The Associated Press)

Flick said he wasn’t worried Amazon would steal his workforce, which has grown from about 35 to 200 in three years — because “we do really cool stuff.” The company has developed a multi-screen TV and media app platform.

He said another large employer could have sparked improvements like more flights at the airport.

Concerns over brain drain

Studies suggest a big Amazon presence in the Toronto area might accelerate a brain drain from Canada to the U.S. as the brightest Canadians are promoted to U.S. headquarters, said University of Waterloo assistant economics professor Joel Blit.

He added it could also drive up local costs for housing and wages.

But he said the potential positive impact of Amazon as one of the anchors in a Waterloo-Toronto technology hub similar to Silicon Valley in California would still outweigh the negatives for the tech industry.

“We took a big hit with BlackBerry where it is now,” he said, referring to job cuts and downsizing at the telecommunications firm over the past several years.

“It’s nice that Google is here. If we had Amazon and maybe a couple of others, truly it could be a world-leading cluster that could be driving a lot of wealth for Canada.”

He said potential positives include a larger labour pool, enhanced regional business relationships and the opportunity for informal shared knowledge between companies.

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