04 Mar BC Tech Sector Brimming with Untapped Potential: Report
Content provided by Business in Vancouver
CRED says B.C. would add 65,000 more jobs and $9.1 billion to provincial GDP if tech sector investments caught up to U.S.
Vision Critical had just five employees when it opened in 2000.
“We’ve been on a hiring spree the last couple of years,” chief marketing officer Tyler Douglas said.
Perhaps that’s somewhat of an understatement.
The Vancouver-based tech company specializing in customer intelligence is today home to more than 700 employees. It plans to add 80 more by the end of the second quarter.
Rumours of initial public offerings constantly swirl around tech startups like Vision Critical and Hootsuite, as seed funding announcements and hiring fairs become fairly predictable rituals at their headquarters.
But despite all the hoopla surrounding the West Coast tech sector, a February report from Conversations for Responsible Economic Development (CRED) questions whether the province is living up to all the hype.
“B.C. still lags behind other tech-producing provinces and the U.S., particularly in exports, jobs and overall GDP contribution,” according to the CRED report.
The non-profit organization examined the latest data and interviewed dozens of industry leaders to find out just how much untapped potential exists in the province’s tech sector.
The study determined that if B.C.’s tech sector were to catch up to the U.S. average, the province would create 65,000 more jobs and add $9.1 billion to B.C.’s GDP.
“[B.C.’s tech sector] really needs more support if it’s going to match the other tech-producing provinces in Canada and if it’s going to match the U.S.,” Liz McDowell, CRED’s executive director, told Business in Vancouver.
That could come in the form of more access to venture capital, loosening of regulations governing temporary foreign workers and the development of the tech sector beyond Vancouver proper, McDowell said.
The report found B.C.’s tech industry has grown 12% since 2007 – twice the rate of the provincial economy. With more than 9,000 tech companies in B.C., the sector accounted for 7.6% of the province’s annual GDP ($15.5 billion) in 2012 and 6.5% of exports.
“B.C., in the Canadian context, is probably punching above its weight,” said Bill Tam, CEO of the BC Technology Industry Association (BCTIA). “But when we look at the tech industry it’s a global business, and it’s one where we need to sort of heighten our sense of competition versus other jurisdictions.”
He said incubators such as the BCTIA’s recently opened Innovation Hub can serve as springboards for small and medium-sized enterprises to become anchor companies, similar to Vision Critical and Hootsuite’s growth paths.
“Even the venture capital stats that came out last week show that B.C. has pulled more than its fair share,” Tam said.
A February report from the Canadian Venture Capital & Private Equity Association found B.C. tech companies brought in $554 million out of the $1.9 billion raised across Canada in venture capital last year. Only Ontario ($932 million) brought in more, while Quebec ($295 million) followed B.C.
“[B.C.’s tech sector] is growing and it’s thriving and it’s doing really well, but it’s still 30% smaller than the tech market in the U.S.,” McDowell said, citing figures calculated in the CRED report.
“With just a small amount of more investment and a small amount of more support, it could actually unlock a huge amount of growth potential.”
But Douglas noted it’s the same challenge the tech community has been dealing with for a decade.
“There’s no doubt there’s untapped potential,” he said. “We will never stop asking ourselves that same question because the appetite for more will always be there and that ‘more’ will continue to push us.”
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