A Canada-US trade war has officially begun, and Canadian tech companies are increasingly looking to new markets to stay competitive and lead globally.
While the US has long been a key partner, shifting dynamics are encouraging Canadian businesses to rethink their strategies and broaden their horizons.
“The door to a more favourable market has never been wider.”
Senior Canadian business leaders and government advisors are increasingly emphasizing the importance of diversifying beyond the US to build greater resilience. And with zero trade barriers, why not look to Europe as a promising opportunity for growth?
Europe offers Canadian companies a wealth of opportunities: a large, affluent consumer base, a skilled workforce, cutting-edge research hubs, and attractive incentives. With the Comprehensive Economic and Trade Agreement eliminating tariffs on most goods and services, the door to a more favourable market has never been wider.
Canadian startups are typically hyper-focused on the US market, but maybe to their detriment. The latest European Expansion Report by Frontline Growth found that top-performing US companies generate up to 40 percent of their global revenue from Europe when they go public. Canadian companies can do the same.
However, we all know that Europe is a complex market with different languages, cultures, and legal systems that can make it daunting for many. So, how can Canadian companies navigate the European market in a way that optimizes their chances of success?
Ireland has long been a popular gateway to Europe for North American companies. Many household names have EMEA hubs in Ireland, including Google, Meta, Microsoft, Intel, LinkedIn, OpenText, TELUS Digital, and Salesforce to name just a few.
With a business-friendly environment, a highly skilled workforce, and a strong cost structure, it’s an attractive choice. As one of the few English-speaking, common law countries in both the EU and the Eurozone, Ireland also benefits from a free trade agreement with the United Kingdom. This unique combination makes it an ideal location for Canadian tech companies seeking access to both the EU and UK markets.
To understand how expansion into Europe can be successful, companies only need to look at what’s helped other Canadian companies grow and succeed in Ireland.
A talent pool built for tech
Globally, three in four employers are currently experiencing difficulties filling roles. Finding talent with high-demand skills in areas like AI, cybersecurity, and general computer science can be incredibly challenging.
Ireland has a particular focus on creating a pipeline of talent with the skills to future-proof supply in high-growth industries. The world’s first Immersive Software Engineering program was created at the University of Limerick, with a new integrated undergrad and Masters degree developed in partnership with leading tech companies, including the founders of Stripe, AWS, and Shopify.
Students spend 50 percent of the four-year program in residencies at these tech companies.
Waterloo-headquartered cybersecurity leader eSentire has also leveraged Ireland’s skilled talent base. In 2015, eSentire set up a global security operations centre (SOC) in Cork, tapping into high-quality cyber talent amid a global shortage of cybersecurity professionals, and helping drive the company’s growth.
Working with Munster Technological University in Cork, for example, eSentire runs an internship program to train students to become SOC analysts.
Shopify also chose Ireland as their European gateway in 2016, and now employs hundreds across the country. At the time, the company said, “Ireland has become a major tech hub and the level of talent is what really drew us to the region.”
In Ireland, decades of government investment has established the country as a top spot for foreign direct investment, and supported robust industry clusters in technology, financial services, biopharma, medtech, and engineering. There is also a well-developed ecosystem of service providers, advisors, recruiters, educational institutes, and suppliers that are well-versed in working with international companies that are making it easier for organizations to focus on their own business.
Selling in Europe starts with showing up
For North American companies, having a presence in Europe shows a commitment to the market, and builds confidence and relationships with end customers.
Clio, one of Canada’s top tech success stories, recently celebrated 10 years in Ireland, and its team has grown beyond initial support and sales to include legal, finance, HR and product development for Europe.
Clio’s Vancouver neighbour, Trulioo, a leader in identity verification, also bolstered its presence in Europe through a Dublin outpost. In announcing its office opening, Trulioo named Dublin as a growing centre of regtech and boasted that 80 percent of global tech firms maintain a presence in the city.
Ireland means business
When expanding into Europe, companies need to consider pro-business policies and attractive incentives to grow and innovate.
Ireland is consistently voted one of the best locations in the world for doing business. With a low corporate tax rate of 12.5 percent (15 percent for companies with global revenue under $750 million), a recently improved R&D Tax Credit of 30 percent and access to innovation funds such as the €500 million Disruptive Technologies Innovation Fund, there are many advantages to locating in Ireland.
In 2018, Mississauga headquartered SOTI established an R&D centre in Galway, on the west coast of Ireland. An industry leader in mobile and IoT device management solution, SOTI’s R&D team works on groundbreaking mobility-focused research to develop innovative mobile device solutions for enterprise customers around the world.
At the time, SOTI CEO and President Carl Rodrigues said that Ireland “has developed an excellent reputation for being a technology-based economy, home to a vast array of tech companies—from giant multinationals to new startups. Galway is already home to many Fortune 500 companies, making it a particularly attractive destination to source experienced development and sales talent.”
Canada’s top tech firms aren’t waiting around. They’re proving that winning globally starts with a foothold in Ireland.
Deirdre Moran is the Senior Vice President of Technology and Country Manager of Canada at IDA Ireland.
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Canadian tech companies should connect with IDA Ireland to explore the opportunities Ireland offers as a gateway to the European market as well as a stable, tariff-free business environment.
If you have questions about getting started, don’t hesitate to reach out idacanada@ida.ie or find us on LinkedIn.
Feature image courtesy of Unsplash. Photo by Aboodi Vesakaran.