Ivan Sierralta, Director, Business Networking and Cluster Development, Calgary Technologies Inc.

In Canada, we often hear concerns about a Canadian company being taken over by a foreign, often American, enterprise. Our natural patriotism leads us to see such acquisitions as chisels chipping away at our Canadian identity. But such takeovers aren't necessarily bad news. In fact, they're often good for Canadian business.

For some sectors, such as advanced technology, it is the way companies evolve and fuel innovation. Whether the innovation originated in Calgary or California, the commercialization path—the route all great ideas take on their way to becoming a successful company—leads to acquisition more often than not.

Advanced technology companies face hurdles many other companies don't. Taking a new product from the idea stage to a marketable product requires a tremendous commitment to research and development—something that can take a financial toll on a startup company. And the life cycle of most technology products is short. You only have to consider how fast your home computer becomes obsolete to understand that taking a product to market fast is key to success. What's more, to be really successful, a tech company usually has to break into international markets to realize big wins -- and that takes a lot of financial and human resources. It's easy to see why entrepreneurs often consider the exit strategy crucial, and why investors typically look for an exit strategy before buying in.

While not all early-stage tech companies are candidates for acquisition, for those that are, it's a win all around. In fact, news of a successful exit often makes entrepreneurs salivate as they anticipate the influx of new money and experienced business mentors.

It's a fact that few entrepreneurs ever really retire. While they might enjoy some much deserved time on a beach, eventually they start thinking about finding new challenges. Their appetite for another success, combined with their experience and new-found wealth, are the ingredients other start-up companies need to commercialize their technology and build a solid company. Not only are successful entrepreneurs sought as mentors and advisers, but they also often become angel investors, bringing their money and expertise to the table.

Of course, just because a company is acquired by a larger corporation doesn't mean jobs move south. On the contrary, Calgary, for instance, has seen a number of lucrative technology deals transpire that not only keep jobs in the local economy, but also give the company the fuel it needs to stay ahead of the competition.

For example, when Garmin Ltd. acquired Dynastream Innovations Inc., of Cochrane, it stayed the course and maintained Dynastream's brand and base of operations. The ink was still wet on the paperwork when Dynastream began recruiting and planning a major expansion, bringing industry stability to the town.

More recently, Calgary-based Veer (provider of visual and design related elements to the professional market) was acquired by Corbis (Microsoft's creative resources company) for an undisclosed amount. The acquisition gives Veer the clout it needs for its long-term growth plans while maintaining the brand and its Calgary operations.

In another case, Hewlett Packard's acquisition of Calgary-based Voodoo Computers enabled it to solve its product development challenges for expansion into the mobile market. Voodoo founders joined the executive team at HP and, with the power of HP behind it, the company is on a fast track to developing a new manufacturing facility in Calgary for its sought-after high performance gaming machines.

Acquisition is also an indirect win for supporting industries. Local suppliers that were dealing with local tech companies are now doing business with multinationals, opening up new potential for supply chains. Commercial real estate also gets a boost as companies embark on faster growth and expansion strategies.

As the tech sector gains traction in Canada, we are starting to see Canadian companies acquiring foreign tech companies, as well. Sierra Wireless of B.C., for example, acquired California-based Airlink in May 2007.

In a perfect world, Canada would have a bigger share of major technology-based corporations that keep home-grown tech companies Canadian owned.

But, even then, acquisition would enable Canadian technologies to grow in importance on the world stage and for the talent to foster new tech ventures in our local markets.