Can a government work like and with the private start-up sector to jump-start immigrant entrepreneurship, attract the “best and brightest” international entrepreneurs, and create local and national economic benefits?
In 2010, three Canadian entrepreneurs looked at a proposed Start-Up Visa in the United States and realized this new approach to attract talented immigrant entrepreneurs could work in Canada. Boris Wertz, Danny Robinson and Maura Rodgers launched the Start-up Visa Initiative to encourage the government to create a Canadian Start-up Visa.
Already in the midst of controversy with Canada’s Immigrant Investor and Entrepreneur Programs, Citizenship and Immigration Canada (CIC) implemented a temporary moratorium on new applications to the program in 2011. Shortly after, the federal government consulted with industry to determine if a new and specialized program to attract immigrant entrepreneurs should be created, and in 2013, the Start-Up Visa Program pilot project began taking applications.
According to CIC, the Start-Up Visa ensures that:
- Immigrant entrepreneurs will successfully launch innovative companies that will create jobs in Canada, and eventually, compete globally,
- Entrepreneurs will have the assistance necessary to navigate the Canadian business environment, which can sometimes prove challenging for newcomers, and
- Private sector firms will have access to a broader range of entrepreneurs, including the best and the brightest minds from around the world.
Another important piece for entrepreneurs is the stability of their immigration status. Canada’s Start-Up Visa program gives entrepreneurs Permanent Resident status when they’re accepted into the program.
A unique policy approach
A five-year pilot, the Start-Up Visa program seeks to “attract the best and brightest entrepreneurs from around the world, with ideas for new business ventures.” The Canadian government re-focused its policy, understanding that “a more globalized economy requires a shift towards innovation, productivity and creating better jobs and stronger businesses that can compete on a global scale.”
Part of this shift included the central and primary participation of the private sector. To be eligible for the Start-Up Visa program, a start-up first needs to be supported by a designated organization, either a venture capital fund, angel investor group, or business incubator/accelerator within Canada.
Gaining the support of one of these organization types is considered key for any start-up to succeed. It may be more important for immigrant start-ups that do not yet have a foothold or deep knowledge of the Canadian market. Most of the designated organizations already work internationally, in particular in the United States, so part of their attraction for an international start-up is access to the North American marketplace.
The government partnership with private sector organizations in Canada that have experience working with and supporting start-ups is a new immigration policy approach. One of the original industry lobbyists, Boris Wertz, praised the government for taking an approach that actually resembles how start-ups get going: having an idea (or minimum viable product), measuring performance in the market, and revising. In short, it’s a loop of build-measure-learn.
In its first 20 months, the Start-Up Visa program saw just five visas issued. There are concerns from some in the technology and start-up community that the pilot approach is flawed. Others suggest that the current problem is the calibre of entrepreneurs who have applied so far.
While the program envisioned 2,750 applications per year, industry advocates expected a more likely number would be in the hundreds. Entering the third year of the pilot project, known application numbers are in the dozens.
The Canadian Start-Up Visa began ambitiously. According to Wertz, Canada has not yet positioned itself as a destination of choice for technology start-ups. Both the Canadian government and its private sector partners (venture capital funds, angel investor groups, and business incubators) need to do a better job marketing Canada as a place to build great tech companies.
Already, there are some key lessons from the pilot phase:
- It is generally hard to attract and entice a start-up that has already started to build and has some employees to move to a different country. Focusing on start-ups still in their early stages may offer the best chance of openness to relocation.
- It is important for private sector partners to travel abroad to market Canada, their programs, and the visa program.
Eventual case studies on immigrant business creation and successful growth will provide an important assessment tool of the Start-Up Visa program.
Policy in practice: The draw of incubators
Business incubators or accelerators are the best pipeline to attract foreign start-ups for this program, according to Wertz. They represent a key differentiator and therefore competitive edge over other country’s visa programs.
The Accelerator Centre in Waterloo Region and Stratford is a designated business incubator for Canada’s Start-up Visa Program. Successful applicants to the tech program receive help starting and growing their business. Start-ups are offered tailored programming, in-house mentorship, and access to funding, office space, education, and networking opportunities to grow their business.
The Accelerator Centre is now reviewing candidates for the Start-Up Visa program, to see if they are a fit for the centre’s programming.
A representative for the Accelerator Centre said the program is “very competitive … for both domestic and international applicants, as we are focused on offering incubation to emerging technology companies that are the best of the best.”
On the value of the partnership with government, the representative said “the Start-up Visa Program is helping us continually deliver the next generation of technology companies coming out of Canada and now Internationally.”
While there are not yet case studies on immigrant entrepreneurs at the Accelerator Centre, the program, one of many like it in Canada, has a history of success with native entrepreneurs. They become part of an entrepreneurial hub and region rich with resources, essential for start-ups to thrive.
As part of a start-up policy approach, in particular the “build-measure-learn” loop, the Canadian government will need to continue to assess the pilot project, iterating more rapidly than perhaps usual in government, to ensure the benefits outlined for Canada and its newest immigrant entrepreneurs.
Did you know?
Canada is not the only country that wants to make it easier for high-tech start-ups to set up shop. These countries have created similar initiatives:
Italia Startup Visa – Italy
La French Tech – France
StartupDelta – Netherlands