Sunday March 12, 2017

Dear Calgary: You'll never be Silicon Valley

Calgary is hoping to attract tech companies to the city, which has record-high office vacancy rates.

Calgary is hoping to attract tech companies to the city, which has record-high office vacancy rates. (Mike Segar/Reuters)

Listen 10:08

Depending on where you live, you may have a different idea of exactly where Silicon Valley North is.

Some say it's the area between Kitchen-Waterloo and Toronto, some say Vancouver.

And now Calgary is trying to claim the title.

But Dan Breznitz says everyone needs to stop trying to be the next Silicon Valley.

The following is a condensed transcript of Dan Breznitz's conversation with The 180's Jim Brown.

Why is it a bad idea for cities to try to be Silicon Valley North?

First of all, it's extremely difficult if not impossible. Second of all, as you are trying to do it, you will probably waste a lot of money and even if you succeed, you wouldn't look like Silicon Valley, you probably would look like a very successful Calgary. And if by chance you start to look like Silicon Valley, it is not at all clear that most of the people of Calgary will actually enjoy the benefits.

 Dan Breznitz

Dan Breznitz says that everyone needs to stop trying to be the next Silicon Valley. (Dan Breznitz)

If that's the case, why do so many cities want to be the next Silicon Valley?

First of all, it sounds good, you can't compete with brands. Second of all, it now has a psychological space.

I have to say that Calgary is already an innovation-based economy — if you think about what Calgary has and how it got there, and the technologies that allowed the oil sands economic miracle happen, and who invested in making this happen.

Do you think that people really understand how much military spending and government subsidies helped Silicon Valley happen in the first place?

No, it's clear that they don't. Speaking of the entrepreneur that everyone admires, the late Steve Jobs, and you look at each and every technology and every component on your iPhone or iPad, you will see 25 years of public-funded research projects. Silicon Valley wouldn't have existed without military and other government help and would have never had continued success without the huge amount — and we're talking about trillions of dollars — which the US government constantly pumped into the system.

Building a tech sector is what they're really saying they want to do here. Is there anything wrong with a city wanting to build a stronger tech sector?

Not at all. The real issue is how do you develop a tech sector that actually contributes to growth and sustained growth in your city and your region, instead of becoming a feeder cluster to Silicon Valley where venture capitalists come to hunt for cheap bargains.

Could there be a new opportunity that cities like Calgary could exploit right now? Could there be room for Silicon Valley North if it's a place where companies like Google and Apple could set up offices to house international staff?

It might be and I think that Canada has some chances or places, but then don't call it Silicon Valley of the North, call it Island of Canada and that's OK, that's absolutely OK, but it's not Silicon Valley. If you look at the economic activities that Alberta and Calgary already have and how you developed them, they are extremely reaching [research and development] and technology savvy. The question there, is can you use this knowledge to excel in high tech sectors that are not just a copycat of the current hot trend in Silicon Valley? Because then you will be the center of activity not just the satellite.

If a city like Calgary wanted to become a place where innovation happened, how would they go about doing that?

I would highly recommend that they don't look at what is already extremely successful somewhere else and then hope that if they imitate it to that exact model it will somehow happen, but try to figure out what will happen five or 10 years from now. And I'll give you an example, let's think that Calgary at the moment doesn't have good nanotechnology and Calgary thinks that it should have a nanotechnology hub, just to train people in the university to the level in which they can actually innovate in nanotechnology will take between five and seven years and that's before they even start to do anything. Then the real question would be: how do you build institutions, networks, financial investors, lawyers, companies, research labs that will allow those types of activities to rapidly grow?