POPULATION, SPACE AND PLACE Popul. Space Place (2014) Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/psp.1912
Attracting and Retaining Foreign Highly Skilled Staff in Times of Global Crisis: a Case Study of Vancouver, British Columbia’s Biotechnology Sector Kathrine Richardson* Geography and Global Studies, San Jose State University, San Jose, CA, USA ABSTRACT How cities attract and retain hard-won foreign talent in times of economic crisis is an underresearched theme. This paper draws on surveys of firms and allied professionals in the Vancouver biotechnology sector to examine the strategies used to attract and retain highly skilled staff over a 10-year period up to 2012. It argues that the foreign highly skilled within Vancouver’s biotechnology sector were more prone to crisis at the level of the firm than they were directly vulnerable to the global financial recession of the early 2000s and 2008. In fact, these crises required firms interviewed to become highly dependent on local and regional auxiliary professionals such as human resource managers and professional immigration attorneys, in addition to spouses, in order to retain these highly skilled foreign professionals within the host city of Vancouver. Copyright © 2014 John Wiley & Sons, Ltd. Accepted 7 October 2014
Keywords: global city; foreign highly skilled; biotechnology; international borders
INTRODUCTION
T
he attraction of foreign highly skilled talent is often a crucial element for a city wanting to achieve global status as it not only bolsters the competitive edge of respective firms but also brings prestige and growth. Thus,
*Correspondence to: Kathrine Richardson, Geography and Global Studies, San Jose State University, San Jose, CA, USA. E-mail:
[email protected]
Sassen (2012, p. 145) argues that the phenomenon of different global professionals coming from all parts of the world to one particular city produces an ‘urban knowledge capital’ that becomes a signature element. Indeed, certain cities around the world have developed a reputation for drawing and retaining the very best foreign talent, even in times of crisis. For example, London has been able to attract international bankers (Beaverstock & Hall, 2012). Paris has specialists in the design and fashion industries, and Los Angeles has attracted professionals to its entertainment industries (Scott, 2005). However, for other cities that aspire to global levels but are not in the same league as London, Paris, and Los Angeles, there are challenges in attracting and retaining highly skilled foreign talent. In fact, Sassen (2012) stresses that this complex global labour market for foreign professionals is really comprised of many different labour markets with specific peculiarities based on the particular industry and host city in question. Such is the case in the high-technology sector, for example, which is characterised by high levels of labour mobility and competition between high-profile cities such as San Francisco, Boston, and New York (Florida, 2002). This paper contributes to the literature on global cities and talent and extends our knowledge of the factors important in the competition for highly skilled labour through a study of the biotechnology industry in the greater Vancouver area, British Columbia (BC), Canada (metropolitan population of 2.5 million in 2011). Conceptually, it focuses on problems in attracting and retaining a substantial foreign workforce in a highly volatile industry, one that is subject to swings of ‘boom’ and ‘bust’ due to both cyclical and structural instabilities. Empirically, the study draws from in-depth interviews at Copyright © 2014 John Wiley & Sons, Ltd.
K. Richardson a firm level and identifies the factors that are deemed important by company managers and professional human resource (HR) executives. As will be shown, Vancouver has particular challenges when it comes to finding, luring, and retaining foreign talent in the biotechnology sector. Although the city has global aspirations, in the field of biotechnology, it is ‘off the beaten path’ and is so far not as robust as clusters such as San Diego, San Francisco, or Boston. In this light, the research questions addressed in the paper focus on examining the characteristics of the Vancouver biotechnology labour market, as well as the particular strategies and challenges for attracting and retaining foreign talent. The next section reviews existing literature concerning the rising competition between cities for highly skilled talent and on factors considered important in attracting and retaining them. This is followed by a short introduction to Vancouver’s biotechnology cluster, indicating its growth in the last 25 years or so, together with the overall instability regarding its labour force. The next sections indicate the methodology involved in the survey of firms and the results, drawing attention to the special factors at work after the general recession of 2008–2009. The paper then discusses the major findings and conclusions. CITIES AND THE COMPETITION FOR HIGHLY SKILLED TALENT The spread of industrial economies usually has required a variety of innovation and technology transfer, with the most successful efforts built on the movement of skilled workers, engineers, and technical experts. As a result, the mobility of international workers, to some degree, has been continuous for over 300 years (Held et al., 1999). However, as Jones (1989) and Sassen (2012) argue, with the rise of new global producer services and global technological industries, a different type of senior leadership and highly specialised elite labour that is globally competitive has occurred over the past 30 years. Thus, Faulconbridge et al. (2009) have underscored the new types of ‘talent workers’ and defined the notion of elite talent as workers fulfilling positions at the pinnacles of organisational hierarchies (e.g. chief executives and chief financial officers) or specialist skilled roles (e.g. professionals in the oil and gas industry, Chinese equity analysts, and research and development scientists in particular niches of Copyright © 2014 John Wiley & Sons, Ltd.
the biotechnology sector). The rising competition for highly skilled talent has been pointed out by McKinsey and company who argue that an international ‘war for talent’ is underway (Michaels et al., 2001; Faulconbridge et al., 2009), dependent on which firms can find, recruit, and retain the most talented executive leadership. Firms that are most successful in luring and retaining this highly sought leadership would benefit tremendously through increased innovation (and profits) in a globally knowledge-driven era and bring benefits to the global city that hosts this talent. Although there has been little empirical study of inter-city competition for foreign talent, scholars have noted the degree to which urban knowledge capital is crucial for the continued advancement of high-technology and biotechnology clusters, frequently a part of the economy of emerging global cities (Beaverstock, 1996; Beaverstock & Smith, 1996; Findlay et al., 1996; Stalker, 2002). For example, Bresnahan and Gambardella (2004), in their extensive study of recently emerging high-technology clusters around the world, found that Taiwan and India have relied heavily on US-educated repatriated Chinese and Indian engineers and that much of Israel’s success could be attributed to highly skilled immigrants from Russia over the past 20 years. Specifically, the nascent firms in these newly emerging clusters had to recruit key talent from outside of the immediate region or cluster if the particular firm and the cluster as a whole were going to continue to grow and be successful. Exploring North America broadly, Wolfe and Gertler (2004), midway through their extensive study of various types of industrial clusters throughout Canada, stressed that the centrality of skilled labour was seen as the single most important local asset to a cluster, especially when it comes to biotechnology. Considering Canadian regions specifically, Holbrook et al. (2003) conducted an overview of Vancouver’s biotechnology cluster, noting that it is unlike other biotechnology clusters in that its sole output is intellectual property, which is highly dependent on human talent. Overall, therefore, it is critical for newly emerging biotechnology clusters to be able to attract and retain highly skilled foreign labour. What then are the specific factors that are important in attracting and retaining foreign highly skilled workers or talent? Here, again, there has been little empirical study. Some of the more traditional factors that are deemed as crucial in encouraging the highly skilled to move from one country Popul. Space Place (2014) DOI: 10.1002/psp
Retaining the Foreign Highly Skilled in Vancouver’s Biotechnology Sector to another include better employment opportunities, more stable political environments and social conditions, and tertiary graduate education opportunities (Boyle et al., 1998; Abella & Kuptsch, 2006; Solimano, 2008; Sassen, 2012). Boyle and Motherwell (2005) examined how to lure highly skilled young Scots away from the seemingly vibrant city of Dublin, Ireland, back to Scotland. On the basis of the use of key cultural indices developed by Florida (2002), namely the Bohemian Index, the Gay Index, and the Multicultural Index, the study worked to move beyond the traditional motivators of the foreign highly skilled to something called ‘cultural cosmopolitanism’. Indeed, although Florida’s (2002) place-specific attributes have drawn criticism by scholars such as Peck (2005) and Houston et al. (2008), many cities and regions around the world have used various applications of Florida’s creative class elements to lure the highly skilled, whether foreign or domestic. In addition, there has been very little research carried out that explores what crucial elements sustain the foreign highly skilled in particular cities, especially in times of global crisis. Scholars such as Christopherson et al. (2010) have drawn attention to the need to retain skilled workers to ensure ‘Regional Resilience’. The authors argue that this is a critical element in examining why some metropolitan regions manage to overcome short-term or long-term adversity and maintain a high quality of life for the region’s inhabitants whereas other regions fail. The authors presented a list of factors needed and showed that a skilled workforce was seen as essential towards the resiliency of a learning region. Donald et al. (2013) explored what impact the 2007–2008 economic crash had on truly creative types, such as artists, architects, and advertising and design-oriented professionals, for example. These authors found that there was little consensus as to how this crisis impacted the creative worker and workforce but concluded that the nature and degree of vulnerability are shaped and influenced by the wider macro-institutional architectures within which the economic activity is situated. To address the research lacuna, the study of the biotechnology cluster in Vancouver focuses on the crisis period of the early 2000s and also following the recession of 2008–2009. Specific research questions included the following: What were the needs of firms in the biotechnology cluster when it came to highly skilled labour? What arrangements were made to hire and retain key foreign workers? What Copyright © 2014 John Wiley & Sons, Ltd.
were the challenges surrounding the recruitment of foreign highly skilled workers, especially in times of global economic crisis? METHODOLOGY Material for this study was taken from over 60 indepth interviews conducted during the years 2002–2012 with the HR managers, chief scientists, and executives of 18 biotechnology firms in the greater Vancouver area at various stages of firm development. Additional information came from the Web pages of the surveyed firms, company reports, and published material on the biotechnology industry in Vancouver. Specifically, six ‘large’ firms were included that had 65 total employees or more at the time of the interview; seven ‘midsize’ firms were included that had between 30 and 64 total employees at the time of the interview; and five ‘small’ firms were included that had between 1 and 29 employees total employees at the time of their interview. Seven of the executives and chief scientists were foreign in their origin and spoke about the needs and challenges of the firm when it came to recruiting and retaining highly skilled foreigners in addition to their own professional and personal experiences. The interviews also included three executive officers of two regional biotechnology industrial associations, 15 professional immigration attorneys practising within the greater Vancouver area, and 22 US Department of Homeland Security and Canada Border Security Agency port-of-entry officers at the nearby international border with the US (approximately 50 km south of downtown Vancouver). The semi-structured interview method was selected in order to better understand the selected firms’ talent priorities and strategies when it came to hiring and retaining the foreign highly skilled. This type of methodology allowed the researcher and the interviewee to delve deeper into topic areas of deemed importance to each particular interviewee as well as the researcher and could help to shed light on the key questions asked in a way that quantitative methodologies could not. Interviews lasted approximately 1 hour and were recorded and later transcribed. All informants were aware the results would be used in published research reports. Interviews were conducted initially during the years 2002– 2006, a period that followed the bursting of the dotcom bubble of 1999–2000 and the post-9/11 Popul. Space Place (2014) DOI: 10.1002/psp
K. Richardson global tightening of international borders and subsequent global economic fallout. A follow-up study was conducted during the years 2010–2012 with seven of the original firms and four ‘new’ firms to further explore how the 2008 global financial crisis might have affected the flows and retention of foreign highly skilled professionals. Some of the firms originally interviewed from 2002 to 2006 had evolved into other firms, whether by merger, growth, or a strategic change in direction of the original firm. Thus, two of the four ‘new’ firms interviewed fell into this category. The two other new firms employed key stakeholders that the author interviewed in the first segment of the study from 2002 to 2006. The results that follow indicate the issues surrounding attracting and retaining foreign highly skilled workers from the biotechnology firms’ perspectives, especially in times of crisis. VANCOUVER AS A BIOTECHNOLOGY CLUSTER Vancouver, once considered a ‘small obscure place’, served as an outpost to a staples economy based on exports of timber and minerals (Barnes, 1996; Hutton, 1997; Innis & Ray, 1999) and also as a gateway to the Asia-Pacific region for over 100 years (Edgington & Goldberg, 1992; Hutton, 1998). As a relatively new city (incorporated in 1886) with tremendous natural resource wealth in its hinterland and a relatively open society, some scholars argue that Vancouver has the potential to evolve into a global city (Richardson et al., 2011). This is perhaps most apparent in Vancouver’s ability to be a strong migration draw from the Asian middle and upper-middle classes, primarily originating from Hong Kong and more recently from mainland China over the past 30 years. A majority of these newcomers seek Canadian citizenship and an opportunity for their children to obtain a North American education, and they view Vancouver’s real estate market as a safe and stable place for their newly earned capital (Waters, 2003; Ley & Waters, 2004; Ley, 2011). In the last 15 years or so, Vancouver has recently developed a reputation for its emerging worldclass biotechnology research and development cluster. The University of British Columbia (UBC) was ranked first in Canada, and ninth in North America, in 2005 by Scientist magazine for producing high-quality patentable research. Similarly, the Milken Institute ranked UBC eighth Copyright © 2014 John Wiley & Sons, Ltd.
in North America for technology transfer and commercialisation in 2006 (DeVol & Bedroussian, 2006). Many factors have contributed to the BC biotechnology industry’s success as a whole, such as close ties between the university and local commercial activities (Cortright & Mayer, 2002; Holbrook et al., 2003; Rees, 2004), world-class medical research, and ease and availability of venture capital for later-stage firms (Niosi, 2003; Niosi & Bas, 2004; Wolfe & Gertler, 2004). However, one critical element needed to maintain this success is the ongoing securing and retaining of foreign highly skilled labour. As of early 2011, HR managers and industry association executives interviewed for this study estimated the total size of the Vancouver biotechnology cluster to be about 3,600 workers, which included general staff, research and development professionals, and executives. Park and McCaffrey (2013) noted that by the end of 2011, there were approximately 4,200 employees and executives within the 159 active life sciences companies operating within BC.1 HR managers interviewed estimated that approximately 700–900 of these people (i.e. around 20– 25%) could be considered foreign in origin. Richardson (2006, 2009) found that seven of the firms’ chief executive officers were from the US. Besides the US, there was also a strong British influence within the sector. One firm stressed that over 20% of the firm’s executives and professionals originated from Great Britain and Europe. There was also a ‘heavy Asian’ component for one firm with over 30% of the firm’s professionals originating from either China or Hong Kong. All firms in the author’s survey emphasised that they also hired professionals that originated from all over the globe. The following section draws from the firm-level surveys and identifies the most important factors in strategies to attract and also retain workers in the period from around 2002 to 2012. RESULTS FROM THE BIOTECHNOLOGY FIRM SURVEY The Critical Role and Challenges of Foreign Talent All firms in the survey hired international executives and professionals with the intention of retaining them permanently. Executives and HR managers noted that although there were considerable efforts Popul. Space Place (2014) DOI: 10.1002/psp
Retaining the Foreign Highly Skilled in Vancouver’s Biotechnology Sector to hire locally, firms in the Vancouver biotechnology cluster frequently had to search globally for highly qualified talent because of the relatively small size of the cluster and the specific needs of the individual companies. Moreover, a majority of the firms reported that they were at critical stages of drug and/or device development, and it was imperative that they retain key US executives and senior scientists associated with these firms who had specific knowledge and experience when it came to US Federal Drug Administration regulations and approval, patent laws, and other specialised advanced scientific knowledge. Other firms also sought highly skilled professionals from the US who could raise substantial amounts of capital, ranging from US$10m to US$500m in one round of financing. All of these foreign (and frequently American) highly skilled professionals needed to demonstrate that they had performed these feats between three to five times successfully before being considered for a senior executive or scientific position within Vancouver’s biotechnology cluster. One industry executive explained: We do not have the experience in the [local] industry right now to hire locally for key senior positions… In fact, we are very young as an industry with about 2,500 people working within the [Vancouver] cluster. We need about 5,000 people in order to reach a critical mass. Having to hire internationally [for key professionals and executives] is not just a Canadian problem. We are all fighting for that same person. We are a global industry, and so we need to hire globally … unlike other high technology sectors, we hire foreigners for permanent positions. They would not move here if it was a temporary job. (Vancouver, 2005) Volatility of the Biotechnology Cluster Despite the dedication to hiring highly talented foreigners permanently, company executives noted that the Vancouver biotechnology cluster could be considered somewhat volatile when it came to sustaining employment levels from one year to the next, and firms frequently let go significant numbers of personnel if funding partnerships were not successful for a certain period. A partial explanation for these dramatic swings in employment levels is that a majority Copyright © 2014 John Wiley & Sons, Ltd.
of the firms did not have any source of income yet and were highly dependent on rounds of funding from investors, pharmaceutical companies, or underwriters, which usually lasted from 1 to 3 years. Additional rounds of funding (and investment in general) were frequently tied to the continued performance of the company and included achieving various agreed-upon goals and successfully passing certain milestones, such as securing US Food and Drug Administration approval for a particular drug candidate. Unlike other high-technology sectors, such as the software industry, which is based on 6- to 18-month product cycles, drug and medical technology products within the biotechnology industry were usually based on 8- to 12-year product development and commercialisation cycles. An overall indicator of this volatility, in terms of both rapid ‘gearing up’ and rapid ‘downsizing’, can be seen in Tables 1 and 2, which focus on employment levels in major BC biotechnology firms (i.e. not just in greater Vancouver) in the early 2000s and early 2010s. Two years after the 2001 recession, four of the top 10 biotechnology firms in 2003 increased their employment levels between 23% and 208%, and four firms had lost between 24% and 80% of their employees in just 2 years, whereas another two firms were dissolved. Three years after the 2008–2009 recession, one firm increased its employment by 83%, five of the top 10 biotechnology firms in 2011 lost between 8% and 64% of their employees, and two firms were apparently dissolved. Unfortunately, despite firms’ best efforts to achieve particular goals and milestones, sometimes a firm’s drug candidate was not successful in securing financing or regulatory approval. These unfortunate circumstances proved true for a major firm with over 300 employees within the Vancouver biotechnology cluster in 2005 and another major Vancouver-based firm in 2012. Both firms reacted similarly with extreme rounds of layoffs over a 4to 5-month period in the respective years. Specific Issues in the Attraction of Skilled Workers The challenges and benefits of spouses Canada not only had relatively open and facilitative immigration and foreign professional labour mobility policies for primary job-seeking foreign professionals but also allowed foreign-born spouses of Popul. Space Place (2014) DOI: 10.1002/psp
K. Richardson Table 1. Per cent change in top 10 British Columbia (BC) biotechnology firms’ employment levels for 2003 and 2005. Firm
Number of BC employees in 2003
Number of BC employees in 2005
Change %
2005 rank
QLT Inc. Inex Pharmaceuticals Int’l. Newtech Development AnorMED Inc. Xenon Genetics, Inc. Inflazyme Pharmaceuticals Stem Cell Technologies Micrologix Biotech (now Migenix Inc.) Chromos Molecular Systems Stress Gen Biotechnologies
197 121 83 74 56 50 45 38 37 37
325 24 Did not rank in 2005 120 69 32 139 29 26 Did not rank in 2005
65 80 — 62 23 36 208 24 30 —
1 17 No Rank 2 4 14 3 10 11 No rank
2003 rank
1 2 3 4 5 6 7 8 9 10
Base source: BC Biotech (2004, 2006).
Table 2. Per cent change in top 10 British Columbia (BC) biotechnology firms’ employment levels for 2010 and 2012. 2011 rank
1 2 3 4 5 6 7 8 9 10
Firm
Number of BC R&D staff in 2010
Number of BC R&D staff in 2012
224 79 75
137 39 40
64 51 47
1 6 5
63 61 51 50 30 25 25
Did not rank in 2013 20 47 50 55 Did not rank in 2013 34
— 67 8 0 83 — 36
No rank 9 4 3 2 No rank 7
Stem Cell Technologies QLT Inc. Techmira Pharmaceutical Corporation Cardiome Pharmaceutical Angiotech Pharmaceuticals Inc. Xenon Pharmaceuticals, Inc. Amgen British Columbia Inc. Kardium Inc. Pegasus Pharmaceutical Group Inc. Zymeworks Inc.
Change %
2013 rank
Base source: BC Lifesciences (2011, 2013).
these professionals to secure local employment. Company executives and HR managers noted that this was a big draw when trying to attract foreign highly skilled professionals who had worked previously in the US but whose spouses were unable to secure employment in the US as a foreign professional, especially since 2008. However, despite the availability of Canadian professional work visas for spouses, five HR managers stressed that it was a real challenge to find the second spouse a job commensurate with his or her education and existing professional experiences. Two of these managers noted that the escalating cost of living in Vancouver usually required both spouses to work. Also, if the first foreign highly skilled professional lost his or her job within the Vancouver biotechnology cluster, it took anywhere between 3 and 8 months to find a Copyright © 2014 John Wiley & Sons, Ltd.
comparable new job within the cluster. So, the income of the spouse was crucial to keeping the family going in the greater Vancouver region until a second family income was secured. The paradox of open migration policies towards foreign professionals Despite Canada’s relative openness towards the foreign highly skilled professionals, all firms interviewed noted that the foreign highly skilled could be challenging, time-consuming, and expensive to attract. In fact, all HR managers started out locally when looking for a new professional or executive and stressed that they preferred to hire someone from within the local Vancouver biotechnology cluster, if possible. The next scale of hiring preference was a professional Popul. Space Place (2014) DOI: 10.1002/psp
Retaining the Foreign Highly Skilled in Vancouver’s Biotechnology Sector who lived and worked on the west coast of North America, namely within one of the biotechnology clusters found in Seattle, San Francisco, or San Diego. Two executives and five HR managers noted that if two applicants had the same experience and professional qualifications, but one had lived and worked on the North American west coast and the other job applicant had not, the firm has a tendency to hire the applicant who had what was called ‘westcoastness’ experience. They noted that the person had a higher likelihood of adapting to the work culture in Vancouver as opposed to someone from Toronto, New York, or London, for example. One foreign vice president of a larger firm explained: We find that we do not have a lot of luck with people that we hire from Toronto or the east coast [of the US]. The work culture is too different for them here in Vancouver. We lack structure on the west coast, and many of these easterners cannot work in this type of environment. They usually quit within six months to a year. So, now, we look for applicants that have a ‘westcoastness’ to them –basically, people who have worked successfully within one of the other biotechnology clusters on the west coast for about four to five years. This tells us they ‘get’ the west coast, and have a high chance of thriving here. (Vancouver, 2005) Even though firms interviewed had a preference to hire locally and regionally North American ‘westcoastness’, many firms were pressed to seek out hires from around the globe. In the recent past, 10 firms interviewed found this to be a timeconsuming but predictable task. Firms noted that these professional immigration programmes used to take anywhere up to 6 months to process a foreign professional’s visa application, with the culture of the border immigration staff that adjudicated these applications being viewed as ‘facilitative’. Processes of Labour Adjustment in Vancouver Due To Firm Volatility Although there was no government mandate in place regarding a process that firms must adhere to before they displaced a large number of employees, as was frequently the case for European countries, it should be emphasised that the HR Copyright © 2014 John Wiley & Sons, Ltd.
managers for all of the larger British Columbia firms formed their own regional ‘outplacement group’ as a way of adjusting their labour force. Amongst other things, this group took up the effort of direct firm-to-firm communications when a particular company had to lay off employees owing to not being successful in a round of funding or not achieving certain clinical study outcomes. One of the purposes of this group was to let other HR managers know if a firm would be laying off employees and to share resumes and related information of those affected prior to the actual layoff. All HR managers noted that the system they devised was fairly effective in finding new jobs within the region for displaced employees, whether foreign or domestic in origin. For example, one firm in the survey had just experienced a second round of layoffs in late June 2005 due to the unfortunate circumstances regarding one of their primary drug candidates, which was not accepted for accelerated approval within a critical foreign government’s drug approval process in December of 2004. The firm responded to this situation by scaling back firm employment from approximately 170 people in 2003 to 22 in June of 2005. The firm’s talent manager noted that this regional HR network was critical in securing comparable employment for a vast majority of displaced employees within the Vancouver area. One of the HR managers elaborated on their outplacement group: Yes, we meet once a month for coffee. We discuss how things are going for the Vancouver cluster. We understand how volatile the industry is, so we try and be ready when a particular firm must do layoffs. We exchange resumes of scientists and other talented personnel who may be let go a few days before it happens, so that we are ready to call them the day that they get their notice… In fact, we just used our system regarding a round of layoffs for one of the larger firms, and the farthest away a person and his family had to relocate to was Seattle. (Greater Vancouver area, 2005) Another group of companies that frequently hired the outplaced foreign highly skilled from the Vancouver biotechnology cluster was the cluster’s own medium and small firms. Two Popul. Space Place (2014) DOI: 10.1002/psp
K. Richardson medium-sized firms noted that they did hire the internationally highly skilled, but they considered themselves ‘second receivers’. What this meant was that a local large firm goes through all of the paperwork and recruitment process requirements that actually bring the foreigner to Vancouver. Then for various reasons, such as firm layoffs, the international hire might find himself or herself on the job market again. It is at this point that these two firms took advantage of the situation and acquired foreign professionals without having to endure the complicated process of governmental paperwork and costly legal fees associated with recruiting a foreigner. Whenever a larger firm did lay off highly skilled employees, the employees of the particular firm in crisis were seen as a ‘windfall’ by the smallsized and mid-sized firms within Vancouver’s biotechnology cluster, as these smaller firms could hire world-class highly skilled foreign employees without having to pay the cost of an international move, which ranged from CN $25,000 to CN$250,000, and foreign visa costs, which ranged from CN$5000 to CN$25,000. An HR manager summarised her mediumsized firm’s strategy: We let the larger firms go through all the trouble with the recruitment process and legal paperwork requirements that actually bring the foreigner to Vancouver. Then when the larger firms do layoffs, we pounce on anyone that has skills that we need and will be beneficial to our firm’s growth. (Vancouver, 2006) However, one medium-sized firm noted that after 2008, the firm had difficulty hiring two outplaced foreign biotechnology professionals because the firm was unsure if a particular partnership was going to materialise. Thus, the HR manager noted that their cluster hiring system was somewhat stalled for about a year after the 2008 global financial crisis, but the firm was eventually able to hire the two people.
Processes of Labour Adjustment after the 2008 Recession Despite the informal labour adjustments and outplacing of talented labour in Vancouver’s biotechnology sector during the 2000s, the post-2008 Copyright © 2014 John Wiley & Sons, Ltd.
global recession proved very difficult when it came to being able to retain the foreign highly skilled in existing private firms within Vancouver’s biotechnology cluster. For example, as a result of the 2008 global recession, one larger Vancouver-based firm, Chemokine Therapeutics, filed for bankruptcy in late 2008, citing lack of accessible financing to continue on research operations (Ledford, 2009). However, two of the smaller Vancouver-based firms interviewed had a very challenging time when it came to firm growth after the 2008 global financial crisis. They noted that it was difficult to initiate ventures with larger pharmaceutical firms immediately after the 2008 global recession because these larger firms were having difficulties securing financing through international banks or had taken a temporary policy of ‘no growth’ until the global economy turned around. In response to this severe cyclical downturn in the industry, key executives and senior scientists, whether domestic or foreign in their origin, who were affected by large firm layoffs, resorted to entrepreneurialism and began a trend of starting up biotechnology firms within the greater Vancouver region. One industry executive elaborated on this phenomenon: We are going through a transition as a cluster right now. The cluster used to be dominated by two to three large firms who were responsible for the overall direction and growth of the cluster. They would do a lot of the hiring of highly skilled people from outside of the region, and train these executives and professionals, which the rest of the cluster may eventually pick up. Now with these larger firms in crisis, and conducting massive lay-offs, it has actually been good for the cluster in the sense that it is encouraging entrepreneurship, and forces smaller firms to be self-sufficient or innovative when it comes to finding or growing highly skilled personnel in the future. We are also seeing some of these executives and senior scientists begin to form their own biotech companies here in Vancouver, similar to what happens in Silicon Valley. (Vancouver, 2011) Interestingly, highly respected provincially supported biotechnology and human health research institutes in BC, such as Genome BC, BC Cancer Research Center, and the Michael Smith Foundation for Health Research, were also able to Popul. Space Place (2014) DOI: 10.1002/psp
Retaining the Foreign Highly Skilled in Vancouver’s Biotechnology Sector hire foreign highly skilled professionals who may have lost their jobs in the late 2000s. Nevertheless, HR managers and senior scientists interviewed noted that there were some concerns about stalled career development and a decline in salaries if the foreign highly skilled were to accept a position at one of these public research institutes based in Vancouver. One of the foreign senior scientists discussed his new position at one of these public research institutes: Well, my current position is not what I came to Vancouver for. However, it will have to do for now. The salary is lower than my previous job [in Vancouver], and there is not the career growth that you can expect in a private firm. However, my wife has finally found a good job, and the kids are happy with their school. I guess you could say that we are embedded here now. (Vancouver, 2010) Despite the broadening of the possible places of employment for the highly foreign skilled, by the late 2000s, the Vancouver biotechnology cluster was still unable to re-absorb all displaced foreign professional employees and executives. Two HR managers noted that given this difficult situation, they found that these foreign professionals were usually able to return to the biotechnology cluster that they came from, if not back to the very firm that the person had worked for in the past before relocating to Vancouver. They noted that many of the foreign hires came from either the San Francisco Bay area or the San Diego biotechnology cluster in the US and the size and hiring capacity of both of these California biotechnology clusters, even during a global recession, were considerably more robust than those of Vancouver.
Post-2008 Issues at the Canada–US Border Although many firms had to reduce their labour force after 2008, Table 2 suggests that certain firms continued to grow in the following years. However, especially since 2008, many firms and immigration attorneys interviewed found that the Canada Border Services Agency had become more restrictive in its policies regarding issuing professional work visas at Canadian ports of entry. Copyright © 2014 John Wiley & Sons, Ltd.
One Canadian immigration attorney discussed the state of affairs for highly skilled foreigners seeking entry at the Canada–US border: The Canadian side of the border is just as bad as the U.S. side now. I have now had four clients in the past six months been turned away at the border. The Canadian immigration officer on duty says that there is missing paperwork, or my client is not qualified to work in Canada, just something that will not make it easy for my foreign client to enter Canada and work. If this continues, we [Canada] will get a reputation as being mean to people [foreigners] who seek entry into Canada for purposes of work. We will become like the U.S. No one wants to go to the U.S. anymore. (Vancouver, 2011) Overall, all of the firms in the 2010–2012 survey noted that since the global financial crisis of 2008, they had increased their hiring of business immigration attorneys to facilitate the recruitment of foreign talent. Indeed, the larger firms noted that they now had a professional immigration lawyer handle all of the paperwork, as opposed to their HR staff, which was historically the case. The small and medium firms interviewed noted that they usually had their HR people pull together the paperwork, but each firm’s lawyer reviewed all the paperwork before sending a potential foreign employee to a Canadian port of entry. Perhaps the one thing that facilitated the need to hire an immigration lawyer was that each firm noted that they had some sort of an entanglement with either the US Department of Homeland Security or the Canada Border Services Agency in the recent past, which cost the firms anywhere between US$3000 and upwards in legal fees. Two smaller firms noted it was much less expensive to hire an attorney in the beginning to do it right than to hire an attorney later on to unravel a pre-existing situation. A vice president of a larger firm reflected on the hiring of lawyers: Well, when we first did an interview a few years ago, I saw the use of lawyers to be unnecessary and expensive. Now, with the way things are going at the border, we must make sure that all of the paperwork is done perfectly, and it helps that it is on the letterhead of a good Popul. Space Place (2014) DOI: 10.1002/psp
K. Richardson attorney. We had a problem last year at the border when it came to hiring one of our scientists from the United States. The situation was so unpleasant for her that she thought about not actually taking the job we offered her … after all the work we went through to get her to come to Vancouver! So, now to minimize something like this happening again, we spend the money up front on a very good lawyer. It’s still expensive, but essential to the process of getting good talent. (Vancouver, 2010)
DISCUSSION Similar to the findings of Bresnahan and Gambardella’s (2004) research on high-technology clusters around the world, the author’s survey reveals that Vancouver’s biotechnology cluster has been dependent on the hiring and retention of foreign talent, especially from the US, when a particular firm reached crucial stages of product development. However, there are particular dimensions that may be specific to the Vancouver location. First, because of the cluster’s relatively small scale, and also the relatively small size of individual firms, the recruitment of the foreign highly skilled was difficult and expensive. Each firm that did hire foreigners had the intention of long-term employment for this foreign talent. However, the foreign highly skilled within Vancouver’s biotechnology sector were prone to cyclical crisis at the level of the firm (e.g. key technology not securing governmental approval and lack of crucial financial support from underwriters), and on balance, this instability made foreign talent workers more vulnerable than the global financial recessions of the early 2000s and 2008. On a firm-by-firm basis, the Vancouver biotechnology cluster was subject to extreme volatility when it came to securing US Federal Drug Agency approval or reaching certain milestones with drug or medical product development when it came to the requirements of funders. An outcome of this industry volatility resulted in frequent layoffs of many foreign highly skilled professionals regardless of a global financial crisis or growth in the global economy. This finding resonates with that of Ernst and Young (2009) who argued that the biotechnology sector, as a whole, was not as directly Copyright © 2014 John Wiley & Sons, Ltd.
affected by the global financial crisis of 2008 as compared with the high-technology sector. Second, the firm-level survey found that a collaborative network of auxiliary professionals worked to retain the foreign highly skilled within the Vancouver region if the highly skilled foreigner lost his or her job. This finding extends the notions of resilient regions by Christopherson et al. (2010), a concept that placed particular emphasis on the importance of the highly skilled’s fluidity between the local region and the global level. They demonstrated that it was the fluidity and trust facilitated by auxiliary professionals, namely HR managers, operating within the region, who retained many of the foreign highly skilled. The Vancouver firm survey also extends the work of Wolfe and Gertler (2004) and underscores the importance of day-to-day coping mechanisms performed by auxiliary professionals, who had an extreme professional dedication to keep a fledgling cluster alive, especially in times of crisis at the firm level. Much of Sassen’s (2012) work on the global city and talent creates a presumed duality between the highly skilled foreigner and the regular (common) domestic professional. This research demonstrated a unique development of ‘urban knowledge capital’ that was created and actualised in the Vancouver cluster when it came to retaining foreign talent. Specifically, there was strong evidence of clever collaboration between the highly talented foreigners and the domestic HR managers regarding strategies and actions used to keep the highly skilled foreigner employed within Vancouver. Much of this unique ‘urban knowledge capital’ may be attributed to the combined talents of both the domestic HR managers and the highly skilled foreigners. A third issue relates to the importance of open borders on the flows of overseas skilled workers. Thus, both Sassen (2012) and Beaverstock and Hall (2012) emphasise the importance of an urban region’s ability to be open to highly skilled foreigners when it came to global city status. Although Canada’s leading city regions, namely Vancouver, Toronto, and Montreal, frequently promote the notion of their openness to foreigners in their ongoing quest to be considered global cities, both the early 2000s and 2008 economic crisis led to a ‘spirit of restriction’ at a Canadian governmental policy level when it came to facilitating policies and programmes and the actual Canadian ports of entry that were designed to Popul. Space Place (2014) DOI: 10.1002/psp
Retaining the Foreign Highly Skilled in Vancouver’s Biotechnology Sector procure the hiring of the foreign highly skilled. (See Richardson, 2010, for an in-depth discussion on this issue during the early to mid-2000s.) Overall, the schism between policy directives set in Ottawa, the nation’s capital, and its actual implementation within regional programmes and at Canadian ports of entry was becoming more and more severe after 2008. Vancouver’s experience with immigration policy and its implementation seems to run counter to the relationship between London-based firms and the City of London’s current immigration policies and implementation when it came to highly skilled foreigners as demonstrated by Beaverstock and Hall (2012). However, Beaverstock and Hall (2012) cautioned that the City of London and Great Britain, in general, might bend to international pressure regarding revised international banking laws, as a result of the global economic crisis, and the subsequent possible tightening of highly skilled immigration policy for foreigners originating outside of the European Union. For Vancouver, however, this lack of proper policy execution led many firms to hire and retain immigration lawyers in order to help facilitate the securing of highly skilled foreigners. Finally, the survey underscored the importance of spousal jobs and incomes for successful settlement of foreign workers. According to Sassen (2012), a city’s ability to be a participant within the global real estate market was a strong indicator of a burgeoning global city status. Indeed, this seemed to be the case for Vancouver. As of 2011, Vancouver ranked as the most expensive North American city to live in with the cost of housing being a major factor (Yu & Donville, 2011; EIU, 2012; Gold, 2013). Because of this escalating high cost of living, the professional working capacity of the second spouse was crucial to the family income and the possible purchasing of a home in the greater Vancouver area. The working capacity of the second spouse was also critical if, for instance, the primary spouse lost his or her job within the Vancouver biotechnology cluster and was not able to secure a similar job with a comparable salary quickly. CONCLUSIONS Much has been written about global cities and their seemingly ongoing need to attract foreign talent in an effort to advance their standing and rank as important international urban centres. However, Sassen (2012) stresses that the global Copyright © 2014 John Wiley & Sons, Ltd.
labour market for these foreign professionals is actually made up of multiple specialised labour markets with specific peculiarities and idiosyncrasies, based on the particular industry and host city and country in question. In fact, far less is known about what it takes to attract and retain foreign talent in a newly emerging global city and in specific industrial clusters, especially during times of volatility in employment at the firm level as well as global economic crisis. This study of firms in Vancouver’s biotechnology industry revealed that foreign talent was indeed an important part of the city’s urban knowledge capital and that local and regional auxiliary professionals and immediate family members, namely spouses, worked to retain the foreign highly skilled professional in the host city of Vancouver during times of economic crisis. The efforts and importance of these local and regional auxiliary professionals and spouses and their contributions to the development of newly emerging global cities and subsequent retention of foreign talent have gone unacknowledged until now. Although there were factors at work specific to the Vancouver case, further research should acknowledge that aspiring global cities often comprise a number of industrial or service sector clusters and that these require more in-depth study. NOTES (1) These calculations included very-early-stage companies normally comprised of one to four founders per firm but usually with no active employees.
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