OOPS!! Amazon’s Vancouver expansion tightens local competition for tech talent


SOMEONE FORGOT TO THINK OF THE UNINTENDED CONSEQUENCES

Marc-David Seidel, UBC Apologist for the Amazon Deal Predicts Pie In the Sky Bye and Bye

Tech workers are already in short supply and Amazon’s increased presence likely to lure workers away from local technology-based startups

Canadian Prime Minister Justin Trudeau is surrounded by Amazon employees as he announces Amazon will be creating 3,000 jobs during a press conference Monday in Vancouver. Amazon already has a large pressence in Canada eploying over 6,000 people. The new tech hub will be located at the old Canada Post headquarters.
Canadian Prime Minister Justin Trudeau is surrounded by Amazon employees as he announces Amazon will be creating 3,000 jobs during a press conference Monday in Vancouver. Amazon already has a large presence in Canada employing over 6,000 people. The new tech hub will be located at the old Canada Post headquarters.  (JEFF VINNICK / GETTY IMAGES)
Prior to the Amazon deal, the Trudeau government, BC and the Vancouver Economic Commission had been promoting the Global Talent Stream visa initiative, which will indeed most likely benefit Amazon, but the situation for the Canadian government’s Startup Visa for immigrant entrepreneurial companies is far from favorable. So the Amazon deal seems to have sent another torpedo into the growth of the high-tech entrepreneurial economy in Vancouver.

VANCOUVER—Following Amazon’s announcement Monday that the company plans to add 3,000 jobs in Vancouver by 2022 with a new office, observers say this could increase the competition for highly skilled tech workers already in short supply.

The Seattle-based retail giant, which opened its first software development site in Vancouver in 2011 with over 1,000 employees, announced that the new jobs will be in e-commerce technology, cloud computing, and machine learning. Employees will be working in a tower the company plans to build on top of the old Canada Post office in downtown.

Carson Woo, associate professor of accounting and information systems at UBC’s Sauder School of Business, said hiring is “a zero-sum game” for tech companies.

He recalls sitting in on board meetings among high-level executives from some of the city’s top employers, who hoped Amazon doesn’t expand in Vancouver. Their reservation, Woo said, comes from the time and money they’ve invested in training these workers.

“Essentially, you’re taking people from other companies,” Woo said.

This is why Woo believes the Canadian government will eventually allow Amazon to hire from overseas like it did for Facebook and Microsoft in the past.

“Because otherwise, the local companies will really suffer,” he added.

Bill Klug, an instructor of cloud computing at the British Columbia Institute of Technology, said small and medium-size companies will feel the pressure especially in what they pay their staff when competing with large multinational tech corporations.

In addition to demand outweighing the supply of tech workers, Amit Venugopal, managing director at Ecenta Canada Services, said Vancouver’s high costs of living has deterred workers he tried to recruit from the east coast who said the salaries offered don’t always match the cost of living.

“Vancouver has a very small native growth of technology workers and the cost of living is prohibiting people from other parts of Canada” moving to B.C., he said. In addition, workers aren’t always interested in being a programmer and opt for work in business or technology management that create a skills gap that employers need to fill.

Despite the growing competition for skilled tech workers, Marc-David Seidel, associate professor at Sauder, said his research in labour mobility indicates that these jobs will help Vancouver’s ecosystem to grow because as some employees will stay with Amazon long-term, others will create start-ups of their own, invest in other start-ups or work for other organizations, adding to the diversity of the workforce.

He highlighted Austin, Texas and Silicon Valley as examples of where the spin-offs helped grow the local tech economy.

“These types of announcements are more a sign that the ecosystem has been growing,” he said, “and that the culture that’s developing the ecosystem is being recognized by international players.”

Jenny Peng is a Vancouver-based reporter covering business. Follow her on Twitter: @JennyPengNow

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