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The Detroit Free Press recently interviewed Microsoft CEO Steve Ballmer who asked him why Microsoft in 2007 built a research and development facility in Canada–over the border in Vancouver–not that far from Microsoft’s quarters in Redmond, Wash.
Why not build it in the United States? Ballmer’s response:
“While the Canadian R&D credit may have been a factor, it wasn’t the deciding one, Ballmer said. That would be immigration policy…”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.”“
In 2008, Microsoft employed more than 78,000 individuals. According to Fortune, Microsoft employs 47,645 in the United States and 30,920 in other countries. Microsoft has said publicly that less than 15 percent of its U.S. work force are H1-B visa holders–which would put the total number of visa holders in the 6,000 to 7,000 range.
The United States has a cap on visa holders at less than 15 percent, so Microsoft is maximizing its use of visas, but consistently lobbies the government for more. The claim? It just can’t find enough talent in this country. Ballmer appears to be beating on that visa drum again in this DFP story. Again, from the article:
““”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.“
Canada is well known for its generous R&D tax credit poilicies and the U.S. wavers on it frequently. From a Scitax Advisory Partners report entitled “North American Politicians Recognize R&D Tax Credits as a Useful Economic Fix”:
“The low priority afforded this issue is witnessed by the fact that Washington has let its Research & Experimentation (“R&E”) tax credit expire no less than 13 times since it was originally enacted into law in 1981. In Canada – and most other countries with similar credits – R&D tax credits are fixed in legislation. But in the US, congress must vote on renewing the R&E tax credit every year. And frequently they vote against renewing it, which means technology companies can’t really count on it.“
Canada’s R&D tax credits may be more significant than Ballmer wants the public and U.S. government to believe.