‘An unmitigated, long-term disaster’: Toronto start-ups fearful of potential Amazon HQ2
The announcement of Toronto being shortlisted in one of the most lucrative competitions in the tech world has sent waves across Canada’s largest city.
Amazon looked at bids from 238 communities for it’s new headquarters and Toronto made the cut when the tech giant narrowed down that list to 20. The city became the only Canadian market to move on to the next round.
“This is good news for our city. It’s good news for our region,” said Mayor John Tory at the time of the announcement. “We’re on this list without offering any tax breaks.”
Winning the Amazon HQ2 sweepstakes holds a lot of potential. The winning bid would not only host a tech giant, but the promise of 50,000 new jobs, more investment and tax revenue. Even Prime Minister Justin Trudeau tried to cozy up to the company’s CEO Jeff Bezos in a closed door meeting during the prime minister’s U.S. trade visit earlier this month.
And then there are those who don’t want Amazon to come to Toronto.
“Amazon coming to Canada is an unmitigated long-term disaster,” said Anthony Lacavera, CEO of Globalive Technology Partners and founder of Wind Mobile.
The overall sense among many Toronto tech moguls and entrepreneurs is that there’s already a scarcity of employees as thousands of new up-and-coming local companies duke it out for talent.
“It’s competitive across the board,” said Sonya Meloff with Sales Talent Agency.
“Whether it be in the technical capacity, like software engineers, hardware engineers, marketing, good P.R. people, finance professionals.”
Lacavera said it would be a “big whale in a small pool.”
“The water goes everywhere, there’s no water left in the pool, that’s what happens,” he said.
Paul Teshima, CEO of Nudge.ai, said the tech giant entering the market would be “challenging” in the short term for his business. He said smaller companies may have to pay more for their employees to compete with a big fish like Amazon, or face the prospect of going under.
“We have to pay market, if not an above market rate, to get them to work for a startup because there’s always a risk to joining a small company,” said Teshima.
The other concern among local tech moguls is that not only will Amazon steal crucial employees from Canadian-based startups, but also ship the more talented recruits south of the border to their main office in Seattle. Some CEOs are worried the tech giant will take any technological developments with them too.
“All the intellectual property, all the amazing developments that our talented engineers develop in this country for Amazon, will then get exported and then all the economic value we create will be exported out to Seattle. How is that a net positive?” said Razor Suleman, CEO of Elevate Toronto.
Lacavera said there is only one solution to the problem and that’s more investment in local talent.
“We really need to be working on creating our own Amazon, our own Apple, our own Google,” he said.
An Amazon communications staff member told Global News the company would not give a direct response to the concerns, but instead pointed to a 2017 press release that said “HQ2 will be a complete headquarters for Amazon – not a satellite office.”
The release also provided figures that showed Seattle saw an increase in Fortune 500 companies with engineering and research and development centres after the rise of Amazon HQ1, increasing to 17 in 2017 from seven companies in 2010.
© 2018 Global News, a division of Corus Entertainment Inc.