San Francisco—Strong and growing economic connections between the Bay Area/Silicon Valley and Canada are helping fuel a vibrant cross-border exchange of talent, technology and capital as California’s second largest trading partner works to dramatically expand its innovation economy, according to a new Bay Area Council Economic Institute report. The report also finds that recent depictions of an unfair trade relationship are overblown, confined to narrow industry sectors and not reflective of a generally balanced exchange of goods and services.
In the Bay Area, Canada has long been a source of top executive leadership and entrepreneurial talent. Bay Area-based innovation companies like Uber, Instacart and Slack were all founded by Canadian immigrants, according to the report. And in the U.S. overall, Canadians have founded more billion-dollar companies (9) than immigrants from any other country.
“The connections between Canada and the Bay Area, California and the U.S. are spurring cross-border growth and innovation” said report author Dr. Sean Randolph, Senior Director of the Bay Area Council Economic Institute. “While the Bay Area serves as an important platform for Canadian citizens and companies to advance cutting edge technologies and grow new companies, Canada is doing all the right things to put in places the pieces necessary to become a strong partner and a global source of innovation in its own right.”
Read the full report: Hemispheric Partners: Trade, Technology and Innovation Ties between the Bay Area and Canada>>
Randolph joins Consul General of Canada Rana Sarkar today at 4:30 p.m. at the Economic Institute for a discussion on the report findings. The discussion will include Laura Buhler, Executive Director of the Canadian business leadership organization C100, Dr. Trevin Stratton, Chief Economist of the Canadian Chamber of Commerce in Ottawa and Alexander Levy, Silicon Valley Bank’s Chief Scientist of ML and AI.
As Canada works to diversify an economy that has been highly dependent on natural resources, the Economic Institute report finds that the country’s connections with California and the Bay Area have been instrumental in propelling its tech and innovation sectors. Even as startups and business leaders continue to flow to the Bay Area, startups and venture capitalists are increasingly looking to Canada as a place to grow and invest, as rising costs in the Bay Area and California create barriers.
The emergence of Canada’s innovation economy and its connections to the Bay Area are not random. The study examines the very deliberate process by which Canada has invested heavily over the past 20 years in public education, science and technology research, to create a growing talent pool and a network of world-class research centers and tech clusters across the country. Canada ranks in the top 20 of countries on the Global Innovation Index, leads the world’s developed countries in its percentage of post-secondary degree graduates. It is also attracting growing venture investment, particularly from the Bay Area. The report finds that while Canada is home to just .5% of the world’s population, the country generates 4% of global knowledge.
“Canada has a compelling story to tell in the Bay Area,” said Rana Sarkar, Consul General of Canada in San Francisco. “We are linked by our economic ties, innovation, talent and values, and are working together to build things and tackle the challenges of the fourth industrial revolution.”
Examples of the close relationship between Canada and the Bay Area in advancing tech and innovation economic activity are legion. Faire is just one. The artificial intelligence platform, which links artisanal makers with local retailers, was founded by two Canadians who launched the company after graduating from a San Francisco-based accelerator program. The company has grown to 74 employees and received more than $100 million in venture funding from such Silicon Valley icons as Sequoia Capital and Khosla Ventures. Other Canadian startups benefiting from the country’s ties to Silicon Valley capital include Shopify, Hootsuite and Kik.
U.S. interest in the Canadian tech sector has been on a steady upward trajectory, according to the report. Since 2012, the report finds, more U.S. investors have invested in Canada firms than Canadian firms.
The surge in new Canadian tech companies has also attracted Bay Area financial institutions, with Silicon Valley Bank recently opening offices. Canadian financial services companies like Royal Bank of Canada (RBC) are also active in California. RBC opened an innovation lab in Silicon Valley in 2016 where it is partnering with startups across a range of fields, including blockchain, AI and big data.
In addition to its focus on innovation and technology, the report offers a snapshot of Canada’s overall economy, its trade relationship with the U.S. and the other industries, particularly in natural resources, that define its economy. Specific topics include NAFTA and the US-Mexico Canada Trade Agreement (USMCA), implications of the US withdrawal from the Trans-Pacific Partnership (TPP), and Canada’s welcoming attitude toward immigrants.
The report parallels other Economic Institute studies that have explored the economic benefits of growing ties with international partners such as the European Union, the Nordic region, China, and India. New 2019 reports are planned on Japan and Singapore.
About the Bay Area Council Economic Institute
The Bay Area Council Economic Institute is a public-private partnership of business, labor, government and higher education that works to foster a competitive economy in California and the San Francisco Bay Area, including San Francisco, Oakland and Silicon Valley. The Economic Institute produces authoritative analyses on economic policy issues affecting the region and the state, including infrastructure, globalization, energy, science and governance, and mobilizes California and Bay Area leaders around targeted policy initiatives. Learn more at www.bayareaeconomy.com.