Op-ed

Trudeau_cant_create_a_new_Montages.JPG

Trudeau can’t create a new Silicon Valley

by Candice Malcolm

Toronto Sun
March 23, 2016

There was a lot of bad public policy in Tuesday’s federal budget, but one of the most harmful and misguided initiatives has flown largely under the radar.

That is, Prime Minister Justin Trudeau’s government will spend $800 million to fund “innovation clusters” in places like Waterloo, hoping to foster a Silicon Valley environment.

It’s easy to see why politicians want to replicate San Francisco’s southern suburbs, known as the Silicon Valley.

It’s a remarkable example of free market capitalism benefiting the world.

It’s a diverse and forward-looking community made up of creative entrepreneurs, brilliant engineers, and bold investors.

Bay Area tech companies employ millions of people worldwide and are worth over $3 trillion combined.

It’s also home to leading technology companies such as Apple, Google, Amazon, Facebook, and Uber, as well as more major investors on one street in Palo Alto than in all of Canada.

The problem with Trudeau’s policy, of course, is that governments all over the world have tried and failed to recreate Silicon Valley, wasting countless billions of taxpayer dollars in the process.

In England, there is Silicon Fen and the Silicon Roundabout. New York has Silicon Alley, Berlin has Silicon Allee, and Australia, Silicon Beach.

Canada is trying to build Silicon North and has been the country with, arguably, one of the biggest failures.

In 2000, the then Progressive Conservative government of Ontario promised to build an “innovation cluster” in Toronto through its MaRS initiative.

Now, 16 years later with the Liberals in charge for 13 and after spending nearly a billion dollars of public money, the project is little more than a nice building with a lot of empty space requiring more government bailouts.

Silicon Valley — the real one — is the most competitive economic environment in the world.

It attracts top talent, and produces top quality work.

When you add government subsidies to that equation, you inadvertently lower the bar and fund projects that probably shouldn’t be funded.

You add government red tape and endless forms to fill out, taking away from the focus of growing a business.

And you open the door to free-riders who show up whenever the government gives away “free money”.

These byproducts of government intervention clash with the environment in Silicon Valley.

If anything, it discourages smart entrepreneurs and scares away the best investors.

That’s not to say Silicon Valley has never received money from the government.

Funding to U.S. military-related projects at Stanford University in the 1950s helped to establish the region as a hub for science and technology.

But the government did not create today’s Silicon Valley.

Its culture and innovation has been built over time by ambitious, creative individuals willing to take risks and try new things.

Several studies echo this point.

The MIT Technology Review, the U.S. Government Accountability Office, the Fraser Institute, and the National University of Singapore all concluded that government “innovation cluster” policy and funding simply do not work.

Trudeau is ignoring the evidence in front of him, and forging ahead anyway.

Silicon Valley investors have a name for what the Trudeau government is selling. They call it “modern day snake oil.”

Finally, readers should know that my husband runs a Waterloo-based tech start-up that has an office in San Francisco and is funded by Canadian and Silicon Valley investors. While details of the government initiative are vague, his firm could conceivably benefit from it.

Photo credit: THE CANADIAN PRESS / Nathan Denette

Be the first to comment

Please check your e-mail for a link to activate your account.
Donate to Canadian Global Affairs Institute Subscribe
 

SEARCH


 

IN THE MEDIA


Military officer's suspension casts clouds over federal shipbuilding effort
by Lee Berthiaume (feat. David Perry), Yahoo! News, January 18, 2017

Sources say vice-admiral was removed over leak investigation
by CTV News Staff (feat. David Perry), CTV News, January 17, 2017

Suspended vice-admiral being investigated for alleged leak of classified shipbuilding data
by Murray Brewster (feat. David Perry), CBC News, January 17, 2017

Canadian embassy the hottest ticket in town for inauguration
by Barrie McKenna (feat. Colin Robertson), The Globe and Mail, January 17, 2017

Foreigners likely tried to influence Canada's election: ex-CSIS head
by John Dehass (feat. Richard Fadden), CTV News, January 15, 2017

Hacking likely in Canadian politics, former spy chief Richard Fadden says
by Nicolas van Praet (feat. Richard Fadden), The Globe and Mail, January 15, 2017

 

LATEST TWEETS


 

EVENTS

Speaker Series 2016/2017:
Opportunities and Challenges for
Western Canada

 
Donate | Submit | Media Inquiries
Making sense of our complex world. | Déchiffrer la complexité de notre monde.
 
HEAD OFFICE
Canadian Global Affairs Institute

Suite 1600, 530 8th Avenue SW
Calgary, Alberta, Canada  T2P 3S8
 
OTTAWA OFFICE
Canadian Global Affairs Institute

8 York Street, 2nd Floor
Ottawa, Ontario, Canada  K1N 5S6

Phone: (613) 288-2529 
Email: contact@cgai.ca 
Web: cgai.ca
 
2002-2015 Canadian Global Affairs Institute

Charitable Registration No.  87982 7913 RR0001