When American tourists visit Canada, they don’t really think of it as “going abroad.”
Likewise, American IT firms hardly view Canada as a foreign country. Our economies are practically Siamese twins, our universities and colleges teach the same skills in the same ways, and at least in the technology sector, our business culture is virtually identical.
It’s not news to anyone that major American companies like IBM, Dell, HP and Microsoft have a major presence north of the 49th parallel. But in large part, their Canadian operations are restricted to the big cities and to our own “Silicon Valleys,” like the Waterloo, Ont. region. As far as I know, nobody on either side of the border calls this “IT offshoring” or even “IT nearshoring.”
Yet, Atlantic Canada is on the edge of the American business map of Canada. Not to the extent of seeing “here be dragons” notations over the region, but it’s somewhat uncharted territory. So, let’s call American investment in the Canadian maritime provinces “IT nearshoring” for the purposes of this blog—a little distant but not quite foreign.
In reality, though, Atlantic Canada is closer to the technology hubs of the U.S. eastern seaboard than you may think. And it’s a place where American companies will feel right at home.
Many of the benefits I described in my blog about Canadian companies nearshoring IT to the east coast of Canada apply to American firms as well. So, let’s get a bit more specific.
All fibre roads lead to Atlantic Canada
There are several Internet pipelines linking maritime urban centres to Boston, central Canada and to Europe. For example, Halifax, Nova Scotia is a hub from which the Hibernia Atlantic Line connects directly to Boston, as well as to Europe via Dublin, Ireland and Southport, U.K. It also connects other Atlantic Canada cities such as Moncton, which is one of the most business friendly centres for IT investment on the continent, as well as Canada’s second-biggest city, Montreal.
Check out a fibre backbone map of the area here.
Great developers think alike
We already looked at one of the problems with offshoring IT to faraway places of which we know little (pace Neville Chamberlain). Business culture can differ tremendously and costs can soar once you realize you need to hire an IT project manager on the ground, one who may not work according to your wishes (or budget).
Yes, we each think our coffee/beer is better. But when it comes down to business, Canadians and Americans use the same coding standards and methodology in IT projects. Our maritimers are no exception, and instead of seeing budgets go off the rails, you’ll save money due to lower wages and business taxes.
True, a software developer in Moncton might not come as cheap as a developer in Bangalore, India. But it’s going to be a lot easier to get things done by talking to someone only one time zone away (or a short flight away) who’s on the exact same page as you.
IT nearshoring vs. IT offshoring: a matter of risk
I won’t rehash any of the points I made in the blog for my Canadian audience as they apply to my American one as well, except to reiterate that Canada is a secure place to invest in IT, and the maritimes are a business-friendly and inexpensive place to do it.
India has a population of more than a billion. The maritime provinces all together count fewer than two million. But numbers only mean so much.
When you offshore IT, you may get access to a massive talent pool, but you’re also putting your money on the long shots. It all depends on how much risk your company is willing to take, but nearshoring is the safer bet.