As many countries slowly lift lockdowns, fDi is speaking to leaders in the FDI community as they return to work and plan for the future.
Montreal has a vibrant tech sector but its fortunes are also pegged to the local aerospace industry, which faces an uncertain future. Montreal International (MI) head Stéphane Paquet outlines his views on how the Canadian city should navigate the challenges ahead.
Q: How has your team adjusted to the crisis?
A: Everyone has been working from home since March. We can’t travel, so we’ve been focusing on the more than 2,000 foreign affiliates already here. We got in touch with them to find out what we could do for them and have done everything to make sure they stay in the greater Montreal area.
Although some investment projects have been postponed, we surveyed our base of investors in March and April – 62% of companies surveyed said they still intended to invest in the greater Montreal area.
Last year the city attracted C$2.6bn (US$1.9bn) in FDI, a record year. In terms of capex, we’re still projecting higher numbers this year, although distributed across few projects.
In 2019, 58 companies set up locally, that number is going to be lower this year. In order to establish operations in a location, senior executives still need to get on a plane and see the place. So the number of newcomers will be lower, but foreign affiliates already here are reinvesting.
The situation varies sector by sector. Montreal has a big aerospace cluster, which faces a difficult period. But we also have artificial intelligence (AI), gaming, and digital technologies, which will do well this year.
Q: What do you expect over the mid-to-long-term?
A: It’s a major crisis but won’t do a 180-degree turn [in our strategy]. We will adapt. Working from home will have a bigger role at the organisation, although employees seem to be enjoying it less than at the start of the crisis.
We will probably travel less. After meeting once or twice, a video call may be enough.
The makeup of our budget may change in the future. Securing government funding going forward will be more difficult because government debt will grow. At present, about 20% of our budget comes from the private sector. We won’t have much choice other than to increase the share of private sector money coming into the organisation.
Q: Will your start-up ecosystem weather the storm and lead the recovery?
A: Start-ups in industries such as life sciences or food have seen jobs grow during the crisis, whereas other start-ups have had to pivot their market focus to adapt. Overall, the ecosystem really mobilised. We need to make sure there are new opportunities for those laid off to remain in the ecosystem.
Q: Montreal International has a mandate to attract foreign start-ups to the city. How do you see the initiative developing?
A: We’re working hard to make sure the Quebec government still backs the initiative. So far we have attracted 20 start-up projects and there have been successes, which means taxpayers’ money has been well spent. Out of the 20 start-ups, 12 came from California (mostly Silicon Valley). For those start-ups, one dollar spent in California equates to two dollars spent in Montreal. For start-ups on tight budgets, Montreal represents a good proposition.
Stéphane Paquet is the president and CEO of Montreal International.
You can find the full archive of the fDi’s Virus Diaries series at the following link. If you work in economic development or investment promotion and want to share your experience in dealing with the coronavirus, get in touch at fDi@ft.com.