Microsoft makes a crossborder connection in North America

When it comes innovation, global tech giant Microsoft believes national frontiers should not be a barrier.

Microsoft’s first and most ambitious target has been to create a crossborder technology mega-hub linking its home base of Seattle, in the US state of Washington, to Vancouver, in the Canadian province of British Columbia. The initiative, dubbed the Cascadia Innovation Corridor, will also include Portland, in the US state of Oregon.

On a smaller scale, Microsoft is also backing a programme to link companies in the US city of El Paso in Texas with others just over the border in Mexico’s Ciudad Juárez, to boost the region in general. 

Such ideas might not be novel in areas such as the EU, where borders between countries are routinely overlooked. But in North America, where the frontiers between the US and Canada, and the US and Mexico, are robust, immigration is tightly controlled and national identities are strong, the challenges are greater. Even within the US, it can take endless negotiation for neighbouring states to collaborate on attracting investment that benefits both.

Combined strengths

The man behind both Microsoft projects is the company’s president and chief legal counsel, Brad Smith. The aim of the Cascadia Innovation Corridor is to use synergies and create transportation links between Vancouver and Seattle, cities 230 kilometres apart, to build on their individual and shared strengths and make the whole region more prosperous. With 800 workers in Vancouver, and 60,000 in Seattle, Microsoft has a vested interest in closing the gap between them.

In an interview with the Seattle Times, Mr Smith explained that bringing the two locations together was especially important because they are not among the world’s largest cities, nor do they have a status comparable with the likes of New York or London. “When you bring cities like this together, you can start to do things that you cannot do when you are acting on your own,” he said. 

Combining the strengths of both cities’ highly rated universities would create a world-class research base to support innovation, he added, while closer integration could spread out growth and relieve the high cost of living in both cities if transportation options were improved. However, he admitted: “It’s an interesting time to be pursuing something that crosses a border.”  

A study by Boston Consulting Group concluded that Seattle and Vancouver had the necessary assets and skills for the idea to work. In 2016, Washington state governor Jay Inslee and British Columbia premier Christy Clark signed a formal agreement to deepen co-operation in trade, research, transportation and education.

In 2018, a steering committee was named, including leaders of the business, technology, academia, transportation, border policy and life sciences communities, as well as local officials. The co-chairs are former Washington state governor Christine Gregoire, who is now the CEO of business alliance SeattleChallenge, and Greg D’Avignon, president and CEO of the Business Council of British Columbia.

Catching the nerd bird

The steering committee has an ambitious programme. By 2021, it aims to position the corridor as a global innovation hub in life sciences, transformative technologies such as quantum and blockchain, and sustainable agriculture. Development targets for 2035 are being drawn up.

Microsoft helped kickstart the process by investing $1m in the Cascadia Urban Analytics Initiative, a joint programme involving the universities of Washington and British Columbia. A crossborder cancer research partnership, the Cascadia Data Discovery Initiative, has been established between leading institutions, and a Northwest Quantum Nexus project aims to develop a quantum-fluent workforce and economy in the region.

To truly unify the corridor, however, transportation links are essential. A daily 'nerd bird' seaplane service between Seattle and Vancouver launched in May 2018. The ultimate goal is to build a high-speed rail system between the two cities, though in November 2019 Washington state voters baulked at the $24bn to $42bn construction cost and turned the project down. 

Mr D’Avignon remains undeterred by this setback, saying voters often veto big projects before they ultimately approve them. He is encouraged by the growing interest that individual businesspeople are showing in the corridor, and by the prospects for FDI it generates. Moreover, he is unworried by what might seem a serious barrier to crossborder collaboration: the strict immigration controls on the US side of the border. Thanks to the US Global Entry programme, there is expedited clearance for pre-approved low-risk travellers into the US.

Borderplex businesses

The Global Entry programme also facilitates a Microsoft initiative on the US-Mexico border. It dates from March 2018 when the company selected El Paso as one of six sites for its TechSpark programme, designed to spur economic growth in rural communities and smaller cities by improving the use of digital technology by businesses, computer science education in schools, and access to rural broadband. 

However, Microsoft soon realised El Paso and Ciudad Juarez, in the Mexican state of Chihuahua, came as a package. Though separated by the Rio Grande, together they constitute a metropolitan area of 2.7 million people in two countries, speaking two languages and representing two cultures known as the Borderplex. People, goods and services move easily across the border. 

“We think there is perhaps no place in North America that has a greater opportunity to realise the potential of AI and those new jobs than the El Paso-Juarez region,” Mr Smith said in a blog post. 

As part of this commitment, Microsoft invested $1.5m in the Bridge Accelerator, a company co-founded by local entrepreneur Ricardo Mora. According to Mr Mora, manufacturing facilities in the region buy $39bn of inputs a year, but only 2% is sourced from local suppliers. The Bridge Accelerator helps companies selected equally from both sides of the border to compete through an intensive training programme that includes identifying different types of innovation and how it applies to the manufacturing supply chain. 

A related company, the Hub, is a binational business incubator that offers space, mentoring and a 3D lab to help start-ups expand.

Microsoft has a global reach so perhaps it is unsurprising that it has been able to transcend national boundaries. But these initiatives are proof, if needed, that political tensions between countries do not have to get in the way of international collaboration for mutual benefit.