Booming Canadian Tech Industry Attracting Multinational Tech Companies With The Country Targeting EU Market

Canada has been aggressively growing its tech industry over recent times and it has become a fertile ground for tech startups and big tech companies. Most organizations across various industries have been enhancing their tech capabilities through the adoption of automation. Currently, Canada is one of the leading places for tech innovations and most of its cities such as Toronto, Montreal, and Vancouver are ranked as leading tech hubs.

Multinational tech companies moving to Canada because of the favorable environment

The industry has benefited from government support with the federal government creating an enabling environment for tech development.  As a result, multinational tech companies such as Google (NASDAQ: GOOGL), Amazon.com Inc. (NASDAQ: AMZN), and Microsoft Corp (NASDAQ: MSFT) among others have found a breeding ground for tech research and innovation. For instance, the announcement of Google that it will be expanding to Canada this year is a sign of the potential the tech space in the country presents.

The San Francisco based company has indicated that it will invest in training people so that it can have adequate employees to meet job needs as a result of the expansion. Alphabet’s CFO Ruth Porat indicated that the company is investing in skills development and it is targeting 5,000 employees by 2022. Tech companies have been able to benefit from the federal government’s decisions to support the industry.

Canada targeting the EU market for its tech products

As the Canadian tech industry continues to grow the government is targeting to export more of its tech-related products to the EU. With new geopolitical and economic opportunities opening up, the federal government is targeting IT buyers from the EU to help grow its tech sector.  Canada used to boast flagship companies such as Blackberry Ltd. (NYSE: BB) was once well known in Europe before its downfall.

However, in 2017 Canadian firm CGI Inc. (NYSE: GIB) was a winner of UK government contracts worth £844 million in deals thanks to its acquisition of Logica in 2012 for £1.7 billion. For content management systems Canada boasts one of the largest software companies, Open Text Corp (NASDAQ: OTEX).  Canada will benefit from the elimination of tariffs on IT products under the CETA free-trade agreement with the EU.

Tech industry needs to be regulated

As the tech industry continues to grow there is a need to regulate it just like tobacco according to Canadian data scientist Christopher Wylie. Wylie is the whistleblower who revealed how Cambridge Analytica interfered with the 2016 US presidential elections.

Wylie states that if circumstances of misuse of personal data as in the case of Cambridge Analytica are to be prevented then there is a need for regulation of big tech companies beyond data issues. He said that regulators should start thinking whether we should be tolerating manipulative design. The 30-year old added that tech companies have so much power over society and thus there is a need to subject them to codes of ethics similar to those that apply for lawyers and doctors.

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This article by Money News National is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Money News National has no position in the stocks mentioned. Thank you for reading.

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