How immigrants are helping tech companies grow

The views expressed by the contributing Entrepreneurs are their own.

In almost every country, immigration is a controversial issue, particularly as it affects the economy. On one side of the debate, critics argue that too much can saturate labor markets and lower wages, while on the other side are those who point to declining birth rates in developed countries and the need for labor in sectors with increasing labor shortages.

Here in Canada, we have for years been quite liberal in allowing immigration. According to Statista, just 493,000 people arrived here legally between July 1, 2021, and June 30, 2022. And the results of a 2022 poll by Research Co. show that three-quarters of Canadians see their arrival and contribution to the economy as a net positive.

As a CEO who is heavily involved in the technology sector, I couldn’t agree more. The reality is that immigrants are critical to economic growth, particularly in this area, and I’m not the only one saying that. Canada is in the midst of a mini tech boom right now, in large part due to the paralysis of our immediate neighbor to the south’s immigration system.

Here’s a look at why tech leaders should consider becoming immigration advocates if they want sustainable growth.

Related: Immigrant business owners are key to supercharging America’s economy

The view from the north

In 2017, Canada’s immigration process was revamped – its goal to bring in highly skilled technology workers from abroad. As part of the country’s Global Skills Strategy, our government has significantly shortened the visa process for these workers, from ten weeks to just two. In addition, some were given a generous work permit exemption period so they could start working immediately, even while their paperwork was being processed. In addition, Canada has a Start-Up Visa program that allows immigrant entrepreneurs to live and work here, provided they have secured funding from venture capital funds, angel investor groups or business incubators.

These policy changes allowed tech startups to attract the talent they needed to thrive at an accelerated rate. As a result, there are now at least 61 Canadian-founded private technology companies on track to hit $1 billion in annual revenue.

They’re not alone: ​​Major US-based tech companies have noticed this success and rushed north to be a part of it. One by one, companies such as Amazon, Apple, Google, Microsoft and Meta opened new offices or expanded their presence here. Such startup activity and expansions have made Toronto the fastest-growing tech hub in North America, trailing only New York and Silicon Valley for overall industry activity…for now. And venture capitalists have also noticed it driving tech investment activity here from $5.8 billion in 2019 to $13.6 billion in 2021, according to PitchBook.

This growth is due in part to government investment and favorable immigration policies, but also to lower talent costs. Hired reports that the average tech salary in the US is $152,463, while in Toronto it is around $117,000. For small companies, this can make a huge difference. For example, in the growing app development market, the average Canadian app developer earns approximately CAD 126,370, which is 4% lower than the US national average. This makes Canada a desirable destination for both investors and skilled workers looking to join a start-up ecosystem.

Related: Increased demand for immigration to the United States

Effects of immigrants on the development of the technology sector

Of course, it would be all too easy to write off Canada’s technological expansion as a function of the cyclical nature of this sector. After all, Toronto is not the first city to host such a boom. A few years ago, everyone called Miami the next big center. Before that it was Austin. However, there is good reason to view what is happening in Canada as something more than cyclical.

First of all, it is no coincidence that the development began within months of the renewal of the visa program. The truth is that Canada simply does not have the labor force to support what is happening without highly skilled immigrants, and the resulting growth mirrors what happened in the US during the innovation boom.

It’s also important to remember that growth in the US tech sector has also been largely the work of newcomers to the country. Steve Jobs was the son of Syrian immigrants, and Google co-founder Sergey Brin is a refugee himself — just to name a very, very few. And research from the National Institute on American Policy shows that 80% of US tech unicorns were either founded by immigrants or rely on them for key management roles. In other words, these people drive technological innovation and development, period.

Related: In a land of entrepreneurs: is America doing enough for refugees and immigrants?

Innovation requires diverse experience

The broader point here is that tech leaders need to start talking about and advocating for smarter immigration policies, wherever they are based. Not to do so is to deprive companies of the very soul of innovation, and all they need to do is look at what’s happening here in Canada to see how such efforts are paying off.

The simple fact is that immigrants offer tech companies the only viable way to keep talent pipelines full and grow bottom lines. That means it’s up to leaders and CEOs to look for ways to use their influence to shape the relevant government conversation. Or, they could continue to let Canada eat their lunch. We’re kind enough here in the True North, but we’re not about to turn away a bounty of talent provided by the inaction of others.

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