Friday, March 02, 2007
Canada - Outsourcing - Missed Opportunity?
I spent last weekend in Canada visiting with family, and on the drive back got to thinking again about the tragic lost opportunity that is Canada as an Outsourcing destination.
Of course people do outsource to Canada, and the Waterloo/Kitchener triangle, along with some more remote regions such as New Brunswick and Nova Scotia have done ok in the past in attracting work. But overall, and particularly in terms of scale, I can't help but believe that Canada has missed out big time on an economy changing opportunity.
Consider the selling points :-
-Geographically its one huge North of the US location
-It covers 4 USA Time Zones
-Canadian have similar accents to midwesterners (sorry but it's true)
-Canadians are highly aware of US cultural norms and activities
-Skilled labor is typically cheaper in Canada than the US
-The Canadian Gov is typically generous with tax breaks and incentives
-Educational standards are high
Need I go on? With so much in its favour why then does proportionatly so little outsourcing business go there? Well I think one of the key reasons is that Canada is trying to do it alone. That they honestly believe (or believed) that they could compete on a global scale and win (look again at the many selling points). But the truth is they lost the battle long ago to India, and in the long term will lose again to China - there are some battles not worth fighting, and there are others that are long over.
Personally I think all the advantages of Canada remain, but that now is the time to partner up....
For what Canada has India does not. In fact the only general areas India (and China for that matter) is have an advantage over are cost and scale. I know from my time at Wipro that some nascent steps are being made to build bridges with Indian outsourcing giants, but surely its time for more?
I think the politicians in Canada still don't fully grasp outsourcing, and that they need to drop the idea that this is in some way eating scraps from rich peoples tables. It is not, it is called the new World Economy - and Canada could still become a strategic winner from this. But it will take serious committment, investment, resources and a sense of urgency to make it happen. Canada can't afford to miss the boat twice.