When California-based Sybase Inc. decided to expand its global mobile wireless software business two years ago, one of the places it decided to do so was in Waterloo, Ontario, mainly because of the work force in the region.

The company currently has 300 employees at the University of Waterloo Research and Technology Park, with plans to grow that work force.

“It’s not just that there is room to expand here, but it is also about where we can get the management and the talent,” John Chen, CEO of the company, said at the time of the expansion.

Sybase’s Waterloo site is a center for research and development (R&D) for its iAnywhere and Financial Fusion subsidiaries.

High-tech companies from across industry clusters are deciding that Canada is a viable alternative for their expansion and relocation projects.

“The first signal always comes from peer groups,” said John Reid, president of the Canadian Advanced Technology Alliance (CATA). “Companies [like Sybase] have done the investment analysis and have set up major operations here. You have a peer group that gives you comfort that the climate in Canada has the right factors to make it attractive as an international business location.”

Canada is positioned to be the entry to global markets, based on its relative proximity to the United States, Mexico, Europe and the Asia-Pacific region. Canadian companies have assured entry to North American markets through the North American Free Trade Agreement.

“A majority of our markets are exports,” Reid said. “A significant portion of our government incentive dollars (federal and provincial) is invested in promoting export markets.”

R&D is an important factor in Canada. Each year, Canadian high-tech companies invest about $5 billion on R&D (based on 2004 numbers), Reid noted. This represents about 40 percent of all private sector research conducted in Canada. Canada’s high-tech sector employs more than 50 percent of the country’s R&D scientists and engineers.

The government augments private sector R&D with numerous facilities and programs.

The Communications Research Centre Canada is one of the country’s leading laboratories for R&D in advanced telecommunications, the National Research Council of Canada is a leading resource for R&D and technology-based innovation, and the NRC Industrial Research Assistance Program provides a range of both technical- and business-oriented advisory services, along with potential financial support to growth-oriented Canadian small - and medium-sized companies.

The Scientific Research and Experimental Development (SR&ED) program is a federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct R&D in Canada that will lead to new, improved or technologically advanced products or processes.

The SR&ED program is the largest single source of federal government support for industrial research and development. Technology Partnerships Canada (TPC) provides funding support for strategic research and development, and demonstration projects that will produce economic, social and environmental benefits. Since 1996, TPC’s activity has been rooted in helping Canadian companies perform R&D that takes new technologies closer to the marketplace, Reid said.

Canada also has a strong university system that focuses on building specific practical skill and scientific engineering components. The result is a highly skilled work force.

“Companies are aware that in order to keep people, you have to take some specific steps with continuous training,” Reid said. “As a country, we understand that innovation is driven by skills.”

The federal and provincial governments commit significant resources to education and research chairs, which are used to attract graduate students and further research, he added.

In addition, the private sector has a strong relationship with universities, Reid pointed out, and some high-tech companies also fund research chairs.