Microsoft CEO Explains Locating Site In Canada

Microsoft CEO explains locating site in Canada
Corporate decisions not always simple economics

June 18, 2009

When a Michigan company decides to invest and create jobs in another state or another country, how do we react?

Not with surprise, certainly.

Some of us wail in anger, taking it personally that “our” jobs are being shipped off to someplace with cheap labor.

Others shrug and blame it on taxes, or politicians, or greedy corporations or labor unions.

But what about when a wildly rich and successful company like Microsoft Corp., of Redmond, Wash., near Seattle, puts a spiffy new research center over the border in Vancouver, British Columbia, instead of its home state?

I talked about it Wednesday with Microsoft CEO Steve Ballmer in an interview after his speech at the National Summit in Detroit.

Former Michigan Gov. John Engler, who heads the National Association of Manufacturers, mentioned the Microsoft move at a summit session Monday. Engler ticked off a list of reasons for America's industrial woes, ranging from high taxes to declining education to uncompetitive research and development tax credits. And he bemoaned Microsoft's decision in 2007 to put its new research lab in Canada, a couple hours away from Seattle.

While the Canadian R&D credit may have been a factor, it wasn't the deciding one, Ballmer said. That would be immigration policy.

The United States has capped the number of temporary H1B visas granted to foreign workers in specialty occupations at about 100,000 a year. Many H1B visa holders are technology workers from India and other Asian nations.

“We opened the lab in Vancouver,” Ballmer said, “because we were having trouble getting visas for the best and the brightest to come to Seattle. The Canadian government said, 'We're happy to have those people.' ”

“It's a bit goofy,” he said, “because for every person we hire to be an engineer, there's probably another four or five people who we employ at Microsoft. There's another set of people employed in the community in construction and housing and retail, a bunch of different industries.”

“We want the best and the brightest, and we want a great education system, with great opportunities for people who were born here,” said Detroit-born Ballmer.

As far as talent goes, “I don't care whether they're American-born or Indian-born or Russian-born. I want to pay them to work in the U.S. That's why I'm trying to get 'em a visa…. I'm not trying to ship the job to India.”

But Microsoft will locate the job in India, or Canada or wherever it can get the best talent.

It's not just a Michigan or a Rust Belt thing.


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