Newspaper article The Christian Science Monitor

US High-Tech Start-Ups Look Longingly at Canada

Newspaper article The Christian Science Monitor

US High-Tech Start-Ups Look Longingly at Canada

Article excerpt

CONVENTIONAL wisdom says the jobs of the future will be in small companies, and high-paying jobs will be found at high-tech firms.

If that is so, then the United States should keep up with other nations in supporting high-tech start-ups, says Gilbert Amine, president of Austin, Texas-based Rochelle Communications Inc. Rochelle makes "Caller ID" hardware and software products for businesses.

"The US is very behind," Mr. Amine complains. "The future is with small companies. Yet, capital is extremely difficult to come by. There is no infrastructure to help high-tech start-ups with financing."

Amine points to the Innovatech program in Quebec, which combines federal and provincial incentives. One feature of the program is a loan on easy terms of 90 percent of the money a nascent high-tech company needs for research and development.

"You can get that without giving away 80 percent of your company," Amine marvels. "They're doing it because they want high-tech jobs.... If I had known about those incentives, I would have located Rochelle in Canada." In fact, he says he already has plans to develop a future product there.

At Opera Systems Inc. in Danvers, Mass., Michael Peel is startled to hear about the program in Canada. "I'd like something like that here," says Mr. Peel, vice president of worldwide operations for the three-year-old manufacturer of mass-storage computer servers.

Amine says when an order came for 1,000 hardware components from a Canadian company, Rochelle did not have the cash flow to cover the manufacturing costs. Fortunately, the customer agreed to pay 50 percent down. A Canadian company could have taken a purchase order from a US customer to a Canadian bank and walked out with a loan for 90 percent of the face value, he says.

Rochelle has a Taiwanese competitor who receives funding from the Communications Bank of Taiwan, Amine says, even though Taiwan does not have Caller ID. …

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