As Nortel edges toward oblivion, people are starting to think about life post-Nortel. What will Canada’s high-tech sector be like without thousands of high-paying employees? What will life be like for thousands of pensioners whose benefits are shrinking or disappearing? How will Canada’s R&D activity be impacted?
Another interesting issue is whether Nortel’s demise will have a major effect on Canada’s startup landscape. In Canada – and probably many countries around the world – one of the great offshoots has been Nortel employees who have left the fold to create their own startups. Armed with experience and expertise, these entrepreneurs have played a key role in fuelling the start-up landscape, even though they might not get the attention that highlights their time with Nortel.
When Nortel disappears, not only will the company disappear but, sadly, the flow of entrepreneurs coming from the corporate mothership. The question is who will replace Nortel as the corporate entity that will spawn entrepreneurs?
Will employees from Research in Motion fill the start-up gap? How about Microsoft Canada or Ericsson or Nokia or Open Text?
Nortel's MEN auction is postponed. What else is new. Seems that no one wants the crown jewels ! More than a year in trying to sell it and now they look like dummies with this last 5 days extension. Please we need the final curtain on this stupid saga asap !
A last-minute revised earnings statement has the entire industry in a tizzy; it says Nortel is still global number one.
yes4aapl
Oh Wow, what will happen now? It will happen what some predicted years ago. Nortel will become fertilizer for new business. and it happens all the time in the free market economy bad companies with no profits go bankrupt and new companies/other companies grow on that example Huawei will need another 70 000 employees soon to satisfy demand and Let me show you few numbers from a good company Apple According to the report, Apple's operating profit was $1.6 billion on sales of 7.4 million iPhones, generating revenue of $4.5 billion. Nokia's profit was $1.1 billion on sales of 108.5 million phones, generating revenue of $10.36 billion (€6.9 billion).
Nortel's gap will be replaced over time with E///, NSN, Avaya, and the Chinese, to the extent governments allow it. The larger impact will be the micro-economies created and sustained by local wage earners, pensioners and suppliers. Look, for example, at any Midwest US town or region once inhabited by General Motors. Many are now ghost towns; retailers that once flourished from GM paychecks left town long ago. One could argue unionization, but the point is the micro-economies were devastated. Look around today, business after business, small and large, are going out of business because the high-paying jobs are leaving. Nortel's demise is, however, it's own - greed, mismanagement, lies, deceit, deception, ineptness, incompetence. It's unfortunate that what once was a positive contributor to people, families, communities and regions is now gone. One can only hope that the talent and contribution will continue on through entrepreneurs and innovation and that governments will support (and defend) those pensioners impacted.
zeroman
was thinking the same thing yesterday. everybody is adamant that life will continue. well maybe it will hobble along but absolutely the local micro environment will be affected. most of the other companies will only maintain a small branch office to be in Canada. Some may have R&D but think about this:
1. would any company pour resources here or into their other HQs globally - NO 2. would customers visit small companies - NO 3. would local talent have a future long-term - NO 4. would engineering school graduates have future opportunities lined up - NO 5. would suppliers to Nortel continue large operations - NO 6. would high salaried execs and people stay for lower salary jobs - NO 7. would investors put in money here preferring it over other locations - NO
the economics may not be as devastating as a GM but it is going to have an impact. it will be tough to deal with the vaccum. people will step up but in today's environment this will be long term depending upon the next best thing coming out of here.
almost all companies locally can trace their roots to Nortel as it fostered innovation. talking about Nortel the entity here not the management. people point to RIM and think mobile widgets will do it. right a single product line company that is already under threat from Apple, Samsung, Palm, Motorola, Nokia and Google. wait and see.
MyHeadHurts
Losing thousands of high-paying jobs? In 2009? Not true.
Many employees in Canada will end up with the acquirier. The majority of damage done to the Canadian economy was in the last 9 years before the break-up. So, the impact now is actually fairly low compared to the damage, destruction caused from the 2001-2002 downturn. In Ottawa, Nortel alone lost more than 25000 jobs over 9 years. The remaining 1000 or so who do not make it to an acquirer are peanuts at this point. Nortle only has less than 4000 employees in Ottawa (I think it's down around 3500 or something now ... )
Now, the question to ask is, what did those 25000 do? Many of them actually went on to start ups, or other technology companies. Ottawa's unemployeement rate never lept in heaps and bounds due to Nortel's demise. Quite the opposite, many Nortel staff found jobs in high-tech. Whether they stayed in Ottawa is a different story.
Ottawa is really no longer Silicon Valley North. That demise happened during 2001-2004 really. Most of the high-paying jobs in high-tech in Canada migrated to Toronto and the GTA. Ottawa is still mostly software development jobs, that are not "high-paying". If you mean 60k a year, then sure. But other comparable service sectors offer that with a few years of experience. In Nortel, the real money was in R&D JCI 3 or 4. That's when you went form 60k a year to a "high-paying" job.
I'd argue RIM has been filling Canada's high-tech top spot for a while now. You can argue CGI is doing that as well. CGI is a larger employer than Microsoft, Ericsson or Nokia in Canada.
So, while we poo poo Nortel, we must remember that she WAS great. She is no longer relevant, as most of the world moved on 5 years ago. This is the problem with the company. Looking to past greatness instead of getting on with things and reinventing herself.
Note that government pays in the 60K range but private sector pays significantly more and this is in a city with a lower cost of living than Toronto. I think part of the musing is what happens to Canadian tech leadership when thousands of people who are currently 'innovating' move to safer government jobs like many have chosen to do. Perhaps others step up and perhaps they don't.
Teleguy
Statistically, Ottawa still has the lead in the country for high-tech jobs, even over Toronto. I am not sure where you heard they are mostly in software development. There are certainly as many hardware jobs here as software.
chrisman
Ah yes, the "University of Nortel". It took me 12 years to get my degree before I graduated. Was a great training ground though.
zeroman
the good old days had top training, employee development, talent movement. Z said in August 2009 the last 6 years Nortel was not a normal company. 4 of them were on his watch btw. all thos programs were killed off so pretty much the workforce lost its edge on technology and their own development.
Another Downside to Losing Nortel
As Nortel edges toward oblivion, people are starting to think about life post-Nortel. What will Canada’s high-tech sector be like without thousands of high-paying employees? What will life be like for thousands of pensioners whose benefits are shrinking or disappearing? How will Canada’s R&D activity be impacted?
Another interesting issue is whether Nortel’s demise will have a major effect on Canada’s startup landscape. In Canada – and probably many countries around the world – one of the great offshoots has been Nortel employees who have left the fold to create their own startups. Armed with experience and expertise, these entrepreneurs have played a key role in fuelling the start-up landscape, even though they might not get the attention that highlights their time with Nortel.
When Nortel disappears, not only will the company disappear but, sadly, the flow of entrepreneurs coming from the corporate mothership. The question is who will replace Nortel as the corporate entity that will spawn entrepreneurs?
Will employees from Research in Motion fill the start-up gap? How about Microsoft Canada or Ericsson or Nokia or Open Text?
Any thoughts?
More more on Nortel’s startup legacy, check out James Bagnall’s story in the Ottawa Citizen.