Microsoft cites US immigration restrictions as primary reason behind decision to open Vancouver software development centre

Microsoft Corp's decision to open a new software development centre in Canada is being hailed as a coup for this country's relatively liberal immigration policies and an endorsement of its growing reputation as a more tolerant and welcoming nation compared to its neighbour to the south. Microsoft announced earlier this month that it was opening the centre with an initial slate of 200-300 employees – a number that could grow to as many as 1,000.

Vancouver was selected primarily for its status as an economic and social gateway to Asia-Pacific — a region with several emerging economies and a rich source of know-ledge workers. Microsoft has rented 7,000 square metres of space and plans to be fully operational by October.

In addition to tapping into Canadian software expertise, the Redmond WA-based high tech giant also hopes to attract skills workers from around the world, exploiting Canada's immigration legislation that facilitates the ease with which information technology workers can emigrate. Of particular interest to Microsoft is the provision for embedded systems software engineers which is used to bring foreign programmers to Canada.

vancouver considered ideal location

Initial plans call for 200-300 people with as many as 1,000 in the longer term, depending on the success of recruitment efforts.

"Vancouver is ideal for us. It could become very significant ... We've been advocating for five of six years to have a centre in Canada for a number of good reasons," says Mark Seman, Microsoft Canada's national director of corporate and public affairs. "There's the innovation agenda, it's close to our head office and Canada provides with us the third highest number of recruits after India and Japan. But the final straw was H-1B and the level of quotas in the US."

Microsoft and other American high-tech companies have been urging the US government to increase the number of H-1B visas required to bring in foreign workers. To date, those efforts have failed due to heightened security in place since Sept 11/01 and more recently the firestorm over new immigration legislation that would have increased the current annual cap of 65,000. The immigration bill made it as far as the US Senate before being voted down. In the most recent allotment, the US Citizenship and Immigration Services department received 150,000 applications for H-1B visas in a single day.

The H-1B program's critics say that the number of visas isn't the only problem. They claim it has become corrupted by large companies that use the program to access cheap labour and outsource jobs to low-wage jurisdictions. Seven of the top 10 firms using the H-1B program are outsourcing companies, leading to charges that it is actually accelerating the outsourcing of high-wage high-tech jobs.

"Microsoft's strategy is to attract the top few people from around the world, whether it's India, Russia or China. Historically we've tried to attract them to Redmond," says Seman. "Vancouver has strong ties to India and Asia, great infrastructure and a strong quality of life. Through immigration, we want to bring in these people to do R&D."

Vancouver joins a relatively small number of regions outside the US where Microsoft has opened similar development centres. There are currently facilities in Ireland, Denmark and Israel. Somewhat higher up the R&D food chain are a small number of Microsoft R&D centres in the UK, India and China.

"R&D centres focus on future R&D products while the development centres are more focused on the next evolution of current product suites, whether it's home, gaming or the office," says Seman.

tackle skills shortage

Microsoft is benefiting primarily from Canadian government efforts to address a skills shortage in the domestic software sector. Recent reports have pointed to a looming talent shortage in the IT sector, with the number of graduates produced domestically falling far short of projected requirements. Add to that the growing global competition for top software developers, and the need for policies to attract talent to Canada has resulted in a more permissive regulatory regime.

"It's a rare bird to have a Microsoft development facility outside Redmond. It's a real endorsement of the calibre our software expertise," says Lynda Leonard, senior VP, Information Technology Association of Canada. "We also have the capacity to attract immigrants in a more expeditious fashion than the US."

R$