Three years ago I pondered whether all the fretting about Vancouver losing corporate head offices had merit — and concluded that it did not:

If we look at the causes of head office decline in Vancouver, we see that it comes from a position of corporate success — not failure. Successful companies have been acquired by the global players who want their product or service. The MacMillian Bloedel – Weyerheuser merger is an example from the forestry sector. Flickr’s acquisition by Yahoo! offers a smaller yet equally valid situation. Local entrepreneurs created a successful product and company that a global player wanted badly enough to buy the company at a high price.

Another cause of head office decline has been the mergers of BC-based businesses. … Driving these mergers has been the need to compete on the global stage — to improve corporate efficiencies and cut costs. No government policy will change this.

Many entrepreneurial creative or knowledge economy companies also do well in Vancouver and once purchased, receive large boosts of funding from the new parent company, creating more creative jobs. [For example] Radical Entertainment [was] bought by Vivendi and now expanding rapidly.

This week, Stephen Gordon at Worthwhile Canadian Initiative shared statistical evidence that indeed it does not matter where in the world the CFO sits:

Just what is the problem with foreign ownership, anyway? The usual stories about low productivity and R&D being done elsewhere are hopelessly out of date. A 2005 StatsCan study (pdf) found that “foreign-controlled plants are more productive than domestic-controlled plants” and “are also more innovative, more R&D intensive and use more advanced technologies.” Their presence also has spillover effects, forcing domestic rivals to increase their productivity as well. What’s not to like?

Given what we know about the knowledge economy, it makes sense that foreign acquisitions of local companies make them better.  After all, they bring new ideas to an already successful business (if it wasn’t successful, or otherwise have incredible potential, it would not have be purchased).

We therefore need to stop measuring cities by the number of corporate head offices, and focus even more on creating the  environment in which talented people can think and thrive.  This will foment successful startups — that could get bought by a bigger player, with fresh new ideas and the money to make those dreams a reality — as well as attract global players to locate new facilities nearby.

Maybe in the future cities will be measured by the number of Fortune 500 firms with locations there.