Canada can reverse its brain drain, but only if it commits to building a dynamic startup culture that gives highly skilled workers a reason to return home, argues Eliot Pence in a Financial Post op-ed.
Estonia and Germany as Models
In the early 1990s, Estonia emerged from the Soviet collapse with little capital and no obvious path forward. It made a deliberate bet to treat its entrepreneurial class as a national asset, helping to grow and scale companies that established the country's reputation as a nation of builders. Today, Estonia has more unicorn companies—privately held startups valued at over US$1 billion—per capita than any country on Earth. Skype, Wise, and Bolt were built there. A country of 1.3 million people decided to take control of its own future, and it did.
Similarly, Germany's post-war recovery was not built on dominant conglomerates but on the Mittelstand: hundreds of thousands of small and medium-sized manufacturers. They now account for more than half of Germany's economic output and nearly 60 per cent of its jobs. More than 600 are world market leaders in their fields. This was the product of a deliberate government decision to build from the middle out, rather than from the top down.
Canada's Missed Bet
Canada has never made that bet on the same scale, Pence writes. Instead, the country has a small number of large, entrenched players—oligopolies and family dynasties that have shaped the economy for generations. This happens when capital concentrates and procurement flows to the familiar; when we play it safe. The result is a country where the instinct to build something from scratch is not rewarded, and where the fastest path to scale often runs through a foreign parent company.
The resulting brain drain is a policy failure with a long history. Canada trains exceptional engineers and founders and then watches them leave because there is rarely anything here worth staying for, Pence argues.
Personal Experience Building a Defence Company
As Pence built his defence company in Canada, he met sharp, hard-working Canadian engineers who had spent years in the United States. It wasn't that they wanted to leave, but they knew that if they stayed, they would be cogs in large, foreign machines, advancing another country's IP and contributing to another country's future. It was good work, it paid well, but it was neither theirs nor Canada's to own.
“There are Canadians who want to come home, but only if there is something worth building here,” Pence says.
What Needs to Change
Keeping the best and brightest from going south requires an environment that gives an entrepreneurial Canadian a reason to bet on their country. That means procurement that moves at speeds required for a startup, contracts structured to build and scale domestic IP, and a culture inside government that treats an initial purchase contract as a bet on a future Canadian success story instead of a financial risk.
Pence also calls for Canada to dream big. “To borrow a sport analogy, we need to go for gold, and not just a podium finish, to attract top talent,” he writes. Most of Canada's legacy industrial policy was calibrated for safety and designed to minimize risk rather than maximize outcome. The country set its sights on participation and being a respected supplier, but that is not how you build an industry or retain the talent to sustain it.
