PEI: Competitive with Bangalore!

The CBC is reporting that technology company CGI will create 150 jobs in Prince Edward Island. Towards the end of the story it says:

The company is also creating about 300 jobs in Russell County, Va. and 200 jobs in Bangalore, India. George said India, where the company is constructing a new facility, has a lower cost of labour as well.

Is this what’s ahead for Prince Edward Island: taking the work from upstream because we’ll do it on the cheap? Has “Cheap Province” replaced “Smart Province” in the prospector’s toolbox?

Comments

alexander o'neill's picture
alexander o'neill on April 1, 2006 - 01:00

There’s ome truth to it, considering that Ford is finding it cheaper to build cars in Canada rather than in the US because they don’t have to pay for private health insurance, etc. It’s not _all_ about PEI / Canada being second-rate. Not completely, anyway.

DerekMac's picture
DerekMac on April 1, 2006 - 13:01

I think that we should take all the “upstream” work we can get. Just because our cost of living and salary expectations are lower that in Ontario doesn’t mean we are “second rate”.

It is important to realize that these are “real” IT programming jobs, not another nine buck an hour call-centre. On another blog, someone mentioned a salary in the $55K range for a particular position. While these salaries may not be competitive with Ontario, they are certainly higher than Bangalore. It also means taking jobs out of the “have” provinces, and creating decently-waged jobs in a less-advantaged part of Canada.

From recent experience, due to the dot com bust and the fact that many students have spent 10’s of thousands of dollars on IT education, and could only find call centre work, there is currently a shortage of IT programming students on PEI. According to students I interviewed recently (please don’t take these numbers as gospel), the excellent UPEI Co-Op program has only a half dozen programming students at the moment, and Holland College’s BIT has a similar number (although there are more in the A+ certification, non-programming end). CGI may have difficulty finding people at the outset, but it will undoubtedly cause more students to get back to programming, and to find jobs with decent salaries right here in PEI, and might even result in some Islanders returning from the West (Quebec to BC) for quality employment and a better lifestyle. This will be great both for those of us who work in government, and those who work in the private sector, as we will have a more vibrant IT industry here, and more potential candidates for jobs which come up.

Alan's picture
Alan on April 1, 2006 - 14:10

This is the sort of good news that was hoped for around 1999. It would be particularly good if the jobs were not inherently transient, if there was some specific purpose in the CGI project related to something in PEI so that in three years, after the government grants, they will not just move on again. Otherwise, it would not make much sense for a young person to train and move for a position that has no roots.

Peter Rukavina's picture
Peter Rukavina on April 1, 2006 - 17:59

The issue is not that “cost of living and salary expectations are lower.” It’s that we’re willing to prostitute our labour force to large multi-national corporations who are willing to relocate elsewhere at the drop of a hat.

If CGI is willing to lay off 1000 workers in Toronto and Montreal, why should we suspend our disbelief and assume that, when the moment is convenient for them, they won’t close down their new Charlottetown site in a similar fashion.

The only way to build a long-term sustainable IT economy in Prince Edward Island is to invest our efforts in fostering small, self-directed, nimble companies that can participate in the networked economy as equals, not as indentured servants.

Buying CGI jobs for the Island might be the right thing to do, short-term. But ultimately it doesn’t build any natural value locally.

Mike M's picture
Mike M on April 1, 2006 - 22:56

On top of it all, the idea that the cost of living is lower is a myth. I had an offer to move back home to PEI and work for a local tech company a few years ago. I looked into the cost of living and although you can get slightly more house for your money than here in Ottawa, everything else was either the same price or more expensive (gas and provincial income and sales taxes especially). I guess I would have saved a lot of money going to PEI Rocket games instead of Ottawa Senators games, but that’s about it.

While I love the Island and “Island way of life”, I wasn’t prepared to take a 20% pay cut to move back and I turned the job down. Contrary to popular Island belief, Ontario can be a perfectly fine place to live too. If CGI wants to attract some Islanders home from “the West”, they’ll have to offer at least somewhat competitive salaries I’d imagine.

alexander o'neill's picture
alexander o'neill on April 1, 2006 - 23:21

Well, I can say that it’s much easier to lay the groundwork for a small, self-directed business when you are able to eat and keep up your coding skills while working for a scary multinational corporation. Having them here is better than not having them here, and might stem the tide of mass exodus of anyone with a brain fro mthis end of the country.

DerekMac's picture
DerekMac on April 2, 2006 - 04:50

I have to agree with Al O’N that having a mega corp here doing IT is good for the small companies too. They can sub to the mega corp, and there will undoubtedly be highly skilled programmers there whose expertise they can borrow when needed. The CGI people would undoubtedly start blogs, participate in user groups, start small companies in their spare time, and, in general, promote the IT culture here. I know Peter is skittish that CGI may “cut and run” when they find a better deal, but having large IT companies here, even for a few years, may serve as a catalyst to stimulate more IT, including both small and large companies.

There are certainly precedents elsewhere, such as Silicon Valley, where a number of companies set up shop around Stanford University. Next thing you know, companies such as Apple were starting up in people’s garages, and companies were enhancing their products with code and chips from other companies.
In my opinion is the combination of a number of entities:
large companies that stimulate employment;
small nimble companies that Peter refers to, which have the ability to react quickly to changing needs;
university and college IT training that can help meet the demand for new knowledge workers;
all coming together in one place, that builds a vibrant IT community.

An no, we are not going to get all the Mike MacLeans of the world back from Ottawa in the near future. The 20 per cent pay gap he mentions will eventually narrow, and may someday reach the magic number where we do attract skilled IT workers back to PEI from the “have” provinces based on salary alone. It will, however, take a while. One also has to factor in lifestyle. PEI’s pace is not for everyone, but for some, it may be just what they are looking for.

Ann's picture
Ann on April 2, 2006 - 17:08

I don’t see where having CGI here precludes small nimble companies from starting up. And, though I have great friends who have small, nimble companies I don’t see hundreds or even tens of them here now — wwhich means there are probably some IT people looking for work. Or maybe there are IT people looking for new and different work and having another large IT employer will force the salaries to be competetive.
I think there’s lots of room for both — not everyone wants to work for themselves.

Kevin O'Brien's picture
Kevin O'Brien on April 3, 2006 - 13:33

There’s no real problem with CGI coming to PEI *as long as* our provincial government didn’t put in a single penny to get them here (or any other prov. or fed. agency in the province).

Why is it that fickle functionaries need to justify their jobs with ‘body counts’ of jobs (?) when true inspiration would lead them toward helping develop the entrepreneurial talents of Islanders and jobs that last — I don’t know if this CGI deal falls into the usual cargo cult mentality but if it follows the pattern of the past twenty years it will be the same thing all over again.

Tens of millions of tax dollars have been poured into tech in PEI over the past 12-15 years and the VAST majority of it has been completely wasted. Actually, “with nothing to show for it” is the best we can hope for, sometimes it ends up as an expensive resource-draining building populated by emperor flatterers and driven by dog-after-his-own-tail-like relevance chasers. For a while I gave my best to the chase.

With a few million in renovations it could be fair high density housing.

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