In October I attended the Fortune Global Forum, held this year in Toronto, Canada. It?s an invitation event for, primarily, the CEOs of businesses all over the world. The makeup of the event evolves as it moves from country to country ? and in Toronto, Canada and the USA were well-represented.
In one of the later panels on AI and Investing in Canada, the conversation veered toward talent, and clusters of talent. It was a great conversation and left me with a few thoughts.
First, there's clearly a great cluster of talent and businesses that leverage AI in Toronto.?? Much has been written elsewhere about clusters. That you can't force them to happen, and usually this money is wasted. And it runs the risk of shaping your production of talent in the wrong way - based on certain biases that policymakers have, rather than the biases that market forces would impose.? Maybe the investment here worked: there is, after all, an AI cluster. Or maybe it didn't.? Austin has it's own critical mass of AI companies (a cluster, if you will), and had no public investment in creating one.? It just happened. So we'll never know for sure how Toronto would have fared on the path without public assistance for that AI cluster, but we can clearly see that they've had success creating critical mass.
Second, universities in Canada have been turning out fantastic students and talent for many years.? Some of the best people I've ever worked with went to Waterloo or came out of Canada.? Their ability to produce great work, adapt to changing conditions, and align others around their visions has been differentiating. I know that's a generalization, but it fits the folks I'm thinking of to a T.
Third, on the panel, they discussed losing (or exporting) talent to other countries, and in particular to Silicon Valley. On a side note: exporting talent shouldn't be discussed as a purely bad thing.? All countries and regions export talent. They also important talent.? On balance, we might prefer to be net-importers of talent. But we're really trading talent- we export what we have too much of (or someone else has too little of), and we import what we lack.? It is one of the few trades where the "commodities" have a choice in whether they participate in the trade or not.
Fourth, on the idea that Silicon Valley is the competition to worry about, I want to make a few points.? Canada's solution to having a brain drain to Silicon Valley is to have a great immigration policy - fast visa approvals, for example, an open and diverse culture, and great food.? Those are all great (but, others decide if you are diverse enough, and if your food is good, you don't get to decide that for yourself - what you can decide is to value those things and reinforce them culturally, which Toronto and Canada do). But Silicon Valley isn't really the competition here, even though it is the most visible place to which any city might lose talent.
I went to school at Stanford, in the heart of Silicon Valley, so I'll share my anecdotal data not as proof but as example... I took a job down in Austin out of college- at a software startup.? It is hard to imagine now, but in 1994, Austin was not considered an "it" city. It wasn't showing up at the top of lists of places to live or places to start a business.? It was known as Silicon Hills - because we actually had quite a bit of chip manufacturing capacity (relative to the world market) at the time.? There used to be radio ads advertising to hire people to work at the FABs here.
Trilogy, the software company I went to work for, represented a turning point in Austin's ability to recruit - if not because of Trilogy, coincident with Trilogy's emergence on the scene.? Trilogy went to dozens of college campuses in the 90's and recruited, at peak, over 250 college graduates a year.? This included 25+ each from Stanford, MIT, Carnegie Mellon, UT, and Waterloo (Canada).? We needed to sell Austin to these graduates - they weren't really interested in Austin. And SXSW was our secret weapon.? We brought them down for SXSW music festival as a sell-trip to help them decide to come to Austin.
SXSW's impact can't be overstated however.? Because by the 2000's , SXSW had a new sibling conference - SXSW-interactive- that started pulling techies to Austin for both tech and music - and film.? Some in NYC and Silicon Valley coined it as "spring break for techies".? SXSW-interactive changed Austin's brand to an extent that is kind of amazing looking back on it.
In 2018, in Austin we leverage our unfair advantages to recruit to Austin: SXSW, ACL Fest, clean air, affordable living (relatively), lakes, hike-and-bike trails, and a population of kind, caring people.? And great food. Not to mention local university talent, a great startup ecosystem, etc. And our real competition isn't Silicon Valley.? When people choose to move from SV to Austin it is for very personal reasons - their own personal choices about lifestyle, family, culture, etc. We can't compete on being "more than Silicon Valley" unless you're talking about more yard with your house.
Our real competition is all those other places that are not Silicon Valley - like, say, Toronto.
And Austin has developed pockets of real expertise that have had long-lasting value. It would have been very hard to predict these up front.
- ?Mixed signal processing chip design.? This used to be the "low value" stuff which is why it got shipped to Austin instead of Silicon Valley back in the day.? No one anticipated MP3 players, phones, and cars needing so many mixed signal chips... Now these skills and companies are killing it, and their jobs and skills were never (to my knowledge) succesfully off-shored as much of the digital signal design work was.
- Low power chip design talent.? Few are aware that Intrinsity (bought by Apple) and other folks in Austin were really experts at low power chip design.? Turns out working on radio and mixed signal chips also typically required them to be very battery and memory efficient. Those skills are still valued in mobile devices.
- Enterprise software.? Most software companies of any size here are enterprise software companies.
- Food and Beverage startups. It is astonishing to me how many great restaurants have started here, as well as food startups, and beverage startups (perhaps you've heard of Shiner, Celis, Tito's, or Deep Eddy).? This seems to extend to things like Yeti (maker of coolers).
- Startups and the ecosystem to support them.
- Business Process software (at least 2 business process companies have had US HQ in Austin)
- Surprise surprise: AI.? And as an aside about AI - I feel like it is a misnomer to say that you have an AI cluster when there are all kinds of applications of AI (Search is an AI topic for example, as is constraint based reasoning, optimization, machine learning etc. )? I think it is better to say what kinds of AI expertise are being fostered - for example a pocket of AI around security software, and around next best actions in corporate settings has taken hold here.? But also there's some interesting AI applications around flight simulation training and other topics. Rather than talk about "AI" we should probably talk about specific applications to a business that are interesting.
If I'm Toronto, I have to look to my unique or unfair advantages and realize that the real competition isn't SV per se - you'll likely always be found wanting in that respect - it is "everywhere else."? People who want to go to SV will. But people who assign value to the things that are true and authentic in Toronto might pick Toronto if they're educated about it.? Those are the folks you can win over. Those are the folks we win to Austin.? And Toronto has a lot to recommend it, so my sense is that they are going to do just fine.
At the conference, Toronto definitely put its best foot forward with everything but the weather (it was 40'-45'F and drizzling).? And the startup founders, CEOs, and office holders all represented well.? I see a lot in common with Austin. And there are direct flights between the two..