Brain drain to Canada

Here is a New York Times headline for the ages:

“Germany agonizes over a Brain Drain [to Canada]”

Benedikt Thoma recalls the moment he began to think seriously about leaving Germany. It was in 2004, at a New Year’s Day reception in nearby Frankfurt, and the guest speaker, a prominent politician, was lamenting the fact that every year thousands of educated Germans turn their backs on their homeland.

“That struck me like a bolt of lightning,” said Mr. Thoma, 44, an engineer then running his family’s elevator company. “I asked myself, ‘Why should I stay here when the future is brighter someplace else?’ ”

In December, as his work with the company became an intolerable grind because of labor disputes, Mr. Thoma quit and made plans to move to Canada. In its wide-open spaces he hopes to find the future that he says is dwindling at home. As soon as he lands a job, Mr. Thoma, his wife, Petra, and their two teenage sons will join the ranks of Germany’s emigrants.

Demographic experts also say the nature of the emigrants is changing. These are not just young unskilled workers like those who fled the economically blighted eastern part of Germany after the country was reunified in 1990 to work in restaurants in Austria or Switzerland.

They are doctors, engineers, architects and scientists — just the sort of highly educated professionals that Germany needs to compete with economic up-and-comers like China and India.

“It’s not a problem of numbers as much as brain drain,” said Reiner Klingholz, the director of the Berlin Institute for Population and Development. “What we desperately need in the near future are talented and qualified people to replace those who will retire in 15 to 20 years.”

In 2005, for example, over 3,000 Germans came to Canada, as compared to 13,000 to the USA or 9,000 to the U.K. Not bad. Drive an hour west of Toronto and you’ll be stunned how many 2nd and 3rd generation Canadians with German ancestry there are. Now as market share goes, we only attracted about 2% of all of Germany’s emigraes in 2005. The Concordia Club needs an exchange program at Oktoberfest.

I had a discussion yesterday with a headhunter about some of the challenges we have in our business, and the primary barrier to growth is finding human capital. Not financial capital, not deals to review. Talent.

While there is no question that Canada grows each year by over 250,000 immigrants, the anecdotes are always about the technical universtiy grad from India that needs to work a couple of years at Rogers as a cable technician before anyone will look at his prior technical training.

Perhaps community networks such as K-W’s Communitech should launch an outreach program and attract some of these prospective immigrants. It’s a shame to admit, but it has been many years now since Canada’s self-styled technology triangle launched more than a handful of great (even good) new companies, despite having their own local VCs (Tech Capital Partners), well-heeled angels, a fab University system and even their own Perimeter Institute.

Waterloo’s weak start-up experience could only benefit from some new blood. Communitech, here is a reason for living (and it isn’t golf tournaments)!

MRM