February 15, 2009
Stats Canada released an interesting report in 2007 that seems to have gone almost un-noticed. The report itself highlights the impact that the high tech downturn in 2000 had. The report contained a few very interesting facts that were, and still are, relevant to Ottawa, including:
Among laid-off high-tech workers, about four out of five did not locate employment in high-tech, and about one out of three moved to another city. In Ottawa–Gatineau, about two in five laid-off high-tech workers left the city.
With the ongoing layoffs this trend will continue – resulting in the ongoing erosion of Ottawa’s tech workforce and capability – unless action is taken.
And supposedly there are not enough tech workers available…
Very interesting!!
Great blog (just discovered it)… keep it up!
This is not surprising. Ottawa tech folks tend to be demographically old when compared to the global tech workforce. A 40 year old guy that costs $110k/per year (loaded rate) at a tech company cannot compete with a 30 year old programmer in Hyderabad making $35k per year (loaded) and being 80% as capable for a given task.
Any finance guy can run those numbers and conclude that outsourcing will cut costs.
What the finance guys are unable to perform valuations on is the value of a local engineering team, in terms of technology expertise, domain expertise, and the ability to deliver software that works as expected. Engineers are not, by and large, able to communicate the value proposition of their services to a non-technical executive. As a result, engineers are just costs to trim.
In the short term after a layoff, a company becomes lean and mean. In the longer term it is emaciated and irritable. The same has happened to Ottawa’s tech sector as a whole.
The other problem with engineers is that because of the nature of their work, they are often redundant after a product ships. (2/5 are often needed for sustaining and evolution). After enough death march projects and layoffs, many product development folks rightly and reasonably head for pastures where the “grass is green” all year…like government employment.
The Ottawa tech sector is not like Silicon Valley. They were originally underwritten by military research work, and continue this to this day. We have no such thing in meaningful numbers in Ottawa to justify a stable tech sector. BNR/Nortel used to be stabilized by the telecomms monopoly/oligopoly of a prosperous Bell Canada and American Baby Bells, but that is no longer true.
Something has to be done, but that “something” has to be underwritten by a form stable cash flow such as military research projects and the like. Good luck with that.