Borders Keep Out Innovation Too
Since returning from living in Silicon Valley, I’ve been in the grips of something my father calls “expatriate blues” – it involves looking around at my new environment and critiquing what’s different, and not always in a positive manner. This is a natural response whenever you move countries – I’ve lived in five countries over the past dozen years, so this par for the course. So, without further ado, allow me to expound on my latest “expatriate blues”-derived pet peeve: the border.
It’s not that I’m against the border per se. Borders exist for a couple good reasons – ensuring the government’s ability to enforce laws, collect taxes, and keep out undesirables (although that seems to be increasingly interpreted as “primarily poor, unskilled immigrants”). That stuff is all good. Unfortunately, as technology becomes increasingly content-rich and network-dependent, we’re seeing a new generation of technologies that get tripped up at the border in the intricacies of international copyright law and licensing schemes.
I’m not the first one to lament the technologies not available in Canada from our neighbor to the south – Hulu, Mint, Netflix, an Amazon.com that doesn’t suck, hellooo? But this is nothing new for Canada – remember the iTunes store? Introduced in the US in April of 2003 and shortly thereafter in Canada in…December 2004. The streak continued with the iPhone (introduced in June 2007 in the US, July 2008 in Canada), and continues to this day with the continued unavailability of Amazon.com’s Kindle device. And, in case you didn’t realize, that last one also includes the Kindle iPhone App – it’s not available in Canada, which seems silly for a software application that can download books over wireless Internet.
In a world of technology that’s supposed enhance our capabilities and remove barriers to markets, it appears the last true barrier to market is still firmly in place. But why should we care? After all, all the innovations I’ve listed could be easily dismissed as trivial entertainment products. It’s not like we’re not getting access to lifesaving medical devices, right?
Wrong – that’s an incomplete and flawed argument. While it’s true these devices may appear to be frivolous, the future often arrives in unexpected forms. The real reason to be concerned about the unavailability of these services in Canada is that they impede Canada’s ability to innovate and to exploit new markets. In some cases, it is possible for engineers and others to work around the border – a US credit card here, a Washington state drop box there, a US IP address proxy service somewhere else – but these are all hacks. These hacks introduce friction, friction which slow down the system and places the country at a disadvantage to gain momentum.
If you’re a fan of Malcolm Gladwell, some of this argument might sound familiar. In his latest book, Outliers, Gladwell notes that many of the hockey players in the NHL are born between January 2nd, and the end of April. The reason? The cutoff dates for age brackets in the minor leagues is January 1st – meaning that anyone born on January 2nd ends up in a lower age bracket. These players’ age advantage translates into superior motor control and size – characteristics that predispose the players to appear more capable than others in their bracket. This means these players get picked for special coaching, which kicks off a virtuous feedback cycle. The players get better, and because they appear to be better players, they get more coaching, which makes them even better players. And so on.
The same is true for innovation. Without access to these products, Canada is placed at a disadvantage, just like a player born on January 1st. Smallest of the litter, slowest of the pack. Not only do our entrepreneurs not get the opportunity to build on top of these platforms, but our own companies are not forced to compete in the global market. This not only means that Canadians don’t get access to better products, but also that Canadians don’t learn how to build better products themselves for export to the world.
Canada needs to move quickly to remove this barrier, or we may end up finding ourselves out of much more than the latest shiny toy.
This post couldn’t be more timely – turns out the newly released Skype for iPhone app is…not available in Canada! What a surprise.
Again, even though there are ways to get a US iTunes account to hack around this problem, that’s not the point. I shouldn’t have to tunnel under these pointless digital fences…it’s the goddamn 21st century. The whole point of the net is to remove barriers.
go brendon “explaining what governments should be fixing” go!
This kind of thing has been driving me crazy ever since I moved here! I’ve got another for your list: HD-capable TiVo. The PVRs in Canada are HORRIBLE. Terrible UI, DRMS all over the place (so you can’t copy recorded videos to your laptop or iPhone). TiVo is here (after the typical delay), but not the newer ones, because Canada doesn’t support the CableCard standard. Now I fully admit, CableCard 1.0 sucks (for one thing, it’s one-way), but that shouldn’t keep it from being adopted temporarily until CableCard 2.0 is agreed upon. But the CRTC being as slow as they are, it will be CableCard 3.0 by the time they get around to acting on it.
Here’s another one that drives me crazy, but it’s from the other side of the border: The $%&^# Patriot Act. It effectively means that there are few (if any) ‘Cloud services’ or development of such in Canada. If you do work in any sensitive areas for privacy (like Medical Records, Government work, etc.), there is no option to use Google anything or Amazon’s application services. So the old models are still in effect and Canada is left behind technologically.
I’ve written about this before, but if anything, the problem has gotten worse; Despite being ‘The Most Wired Country on Earth’ *per capita*, eccommerce is incredibly expensive here. There is, as you say, no Amazon equivalent, and relatively poor options for online shopping (especially factoring in the shipping costs). Having no reasonably priced streaming movie service (or TV like Hulu) means that Canadians essentially have become the biggest users of bittorrent in North America. Great, we’re the best pirates around thanks to corporations painting us into a corner.
Regarding piracy, it appears the US is going after Canada again, again claiming it is the biggest pirate nation. And, of course, they want Canada to implement the WIPO internet treaties.
My response is “let’s make a deal”: if they launch services simultaneously in Canada, with the same pricing and options, then we can talk. 😉
Why are these services not available in Canada? What causes the delay – some sort of government regulations or the corporate launch strategies?
Canada’s pretty small – if you’re a company thinking about where to launch a product, a country of only 30 million people smeared across the 49th parallel is not that financially appealing.
However, the unattractive size of the Canadian market is offset by the similarity of Canadian customers to their US counterparts (largely the same culture, values, language), and the country’s proximity to the US.
That said, there are still barriers to entering the Canadian market. It’s a different country, and there are different laws – companies usually need to set up a separate company to comply with Canadian laws. Most content licenses are negotiated on a per-country or region basis, and so entering the Canadian market with a content-based product (Hulu, for example) requires negotiating the Canadian rights. Different laws also mean that certain regulated technologies may not yet be available in Canada due to the relative sluggishness of the regulatory infrastructure (CRTC, I’m looking at you).
All of these little differences introduce friction into the system, something that will slow a company’s ability to roll out its products to a new geography. As a company with limited resources, you’re more likely to want to enter a big market with minimal barriers, than a small one. So companies make the logical choice: they put off entering Canada, and may even introduce products in Europe instead (really large market, slightly higher barriers than Canada, so a better return on investment overall).