14 Sep 2016 (BIV) Tech sector gains strong foothold in BC’s north
Content provided by Business in Vancouver.
Northern British Columbia’s thriving tech sector is putting some distance on its outdated image as an economy dominated exclusively by mining and forestry. Technology in the north, with almost 500 tech firms and counting, provides more than 5% of employment in the Northeast, North Coast, Nechako and Cariboo regions.
“There’s a lot of misconceptions of where economic development in the province of B.C. as a whole is coming from, and also in northern B.C.,” said Liz McDowell, consultant for advocacy group Conversations for Responsible Economic Development. “Of course resources are important, but particularly after the collapse of the logging industry with the pine beetle, we’re seeing real regional investments in other sectors.”
McDowell said sectors receiving investment like manufacturing are interrelated with the resource sector and add value to resource products. The same goes for the developing tech industry in British Columbia’s north.
Tech firms originating in the north often develop technology specifically for the more traditional northern B.C. industries like energy, mining and forestry.
“Often what we see is that there is a proximity benefit when you develop tech companies that are symbiotic with the local ecosystem,” said Bill Tam, CEO of the B.C. Technology Industry Association. “In Prince George, for instance, because there’s a lot of forestry companies up there, obviously you’re going to see a lot of tech companies emerge that are principally focused on solving real-world problems that the forestry industry sees up there.”
Part of the proximity benefit that tech companies have is more direct access to their customer base. According to Tam, businesses are able to get a head start by locating near industry customers and co-ordinating with them to make something that the industry truly wants and needs. These businesses are then able to develop products with industry expertise. That technology is often export-ready, and firms simply have to scale operations to meet demand from industries across the world.
British Columbia’s tech industry is made up of diverse companies and products. The diversity is a result of the variety of markets that the technology companies serve. Tam said northern B.C. tech companies have built world-class systems around the resource industry, but there are also tech companies focused on serving other markets. Prince George is home to software companies that have developed mapping applications, including Sparkgeo and Map Jungle.
The companies that make up northern British Columbia’s tech industry have varying origins. Some companies started organically, others were spun out of existing companies in the resource industry. Tam said the technical revolution of the 21st century has forced companies to adapt by researching and developing their own technologies. If they don’t, they risk being dependent on the technology developed by their more innovative competition.
“We have seen, in a few cases, larger companies like Teck Resources (TSX:TCK.B) and Goldcorp (TSX:G) are starting to look at their innovation agendas and how they can actually be better at applying digital technologies to how they do business,” he said.
Northern B.C.’s tech industry could be a long-term solution to the region’s struggling economy. However, Tam said, tech companies are having trouble attracting the volume of talent that they need. While the northern tech industry’s connection to the resource sector makes it difficult for them to move, small talent pools in the region could force their hand.
McDowell said “there are a lot of things happening” in the sector, “but there is the potential for a lot, lot more.”
Like Tam, McDowell says the unmet potential is the result of a lack of skilled workers. McDowell says that there is also a challenge with venture capital funding. While companies can get investment at the angel stage, many struggle in the middle stages trying to find private investment.
The City of Prince George is trying to encourage industry growth by implementing technology and business incubators as well as building needed infrastructure. Overall, people are optimistic that with proper financial and educational investments the tech industry could offer a beacon of hope for some of the region’s economic difficulties.
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