The Globe and Mail: When luring foreign investment, don’t forget the human factor
Eric Bosco is chief business development officer at Mitacs, a national, not-for-profit organization that connects top-level research with private-sector needs.
Canada’s commitment to spend $218-million over the next five years to lure foreign direct investments here is great news. Based on early reports, the Invest in Canada Hub announced by then Minister of International Trade, Chrystia Freeland, will operate as a one-stop, concierge-like service for international investors, helping them to navigate the jurisdictional confusion and bureaucracy inherent in dealing with our country’s multiple levels of government.
Yet, there is more to convincing companies to do business in Canada than guiding them through regulatory frameworks, taxes and policies. We also need to ensure they can effectively navigate our broad-based innovation ecosystem made up of highly talented researchers and small- and medium-sized enterprises (SMEs). As much as the proposed agency would be a service hub that complements existing policies and initiatives, it will need to operate as a “people hub” that connects foreign businesses with the Canadians who are positioned to help them solve their challenges.
In light of recent events in the United States and Britain, many international businesses are turning their attention to Canada and one of their most pressing challenges is figuring out how to quickly plug into our geographically-dispersed network of talent and innovation.
This is where the role of the honest broker – or people hub – is vital. It taps into the resources that international businesses need to help find top talent, advance research and establish ties with local SMEs.
A people hub provides intangible value to companies by allowing them to build a Canadian network before committing to a potential large investment. For example, I was recently approached by executives from a multinational food corporation looking to establish a research arm in Canada. By finding the right people on the Canadian side, we were able to establish a shared mandate with a leading Canadian university and a new business development manager who is now prospecting early-stage research opportunities. Even though the corporation had previously been courted by federal and provincial governments alike, this is its first concrete effort to do research in Canada and a first step toward a long-term presence here.
Establishing connections with international businesses also helps Canadian SMEs to grow. And let’s face it, Canada is a country of SMEs. Network specialist Ciena, for instance – which acquired Nortel in 2010 – has had a rich manufacturing history in Canada. But it has since augmented its research capacity through partnerships with nine universities across Ontario and Quebec and five SMEs that now benefit from tapping into its supply chain. This type of opportunity doesn’t happen with just investment advice – it’s the human hub that connects the spokes.
The SMEs in Canada, of course, have a critical role in these partnerships. They need to come to the table hungry – they need to be open to different ways of doing things, to think globally and to work with the hubs, people or otherwise, to promote themselves.
There’s also another role for government we can’t ignore – the need for a cross-government approach, meaning that any one group cannot operate in a vacuum. Several ministries need to be involved in order to ensure their work supports these efforts. Think of immigration strategy, tax strategy and the innovation agenda, to name a few.
The efforts will pay off. Sengled Optoelectronics, based in Shanghai, is a global innovator integrating electronics with energy-saving LED lighting. Needing to secure highly-skilled workers in a competitive market, Sengled established a major R&D site in Vancouver – where they have the local university talent to support their needs. The company’s presence in Canada will provide access to a talent pipeline on the cutting edge in its industry, as well as employment opportunities for young Canadians. Such new jobs are high-paying, long-term positions that will ensure that Canada stays relevant and at the forefront of next-generation product development.
The Invest in Canada Hub can provide a real opportunity for this country to shine on the world stage and promote Canada as a proponent of open trade as other nations are taking a protectionist stance. If the Hub and its partners also embrace a human connector role and establish meaningful partnerships between people and companies, the return on our collective investment will be that much higher.