By Bill Tam, as featured in the Corporate Recruiters Newsletter, Spring 2012
Wednesday, April 25, 2012 – As a tech community, we can all be pretty proud of the fact that our industry has outperformed just about every sector of the BC economy over the past decade, with GDP growth that was more than double that of the province overall. Yet, when we look more closely at how we stack up against the tech sectors in other jurisdictions, it’s easy to see that we still have much to do to realize our full potential.
Tech now accounts for over 6% of GDP in British Columbia (or $9.3B) – putting us roughly on par with traditional industries like construction, retail trade and transportation; and well ahead of any of the resource-based sectors. But a North American wide comparison shows that BC’s tech sector ranks in the bottom half of all states and provinces with more than 30 states in the US ranking higher than BC in terms of technology as a proportion of GDP. In Canada, BC still lags significantly behind Quebec, in which technology accounted for 8.8% of GDP.
So, you might ask: why are we behind and what do we need to do to catch up?
Having been immersed as a tech-guy reviewing economic literature over the past 6 months, I’ve arrived at the simple conclusion that ‘There is No Middle Class in tech’. We have had a persistent imbalance in our industry structure where only 3.5 percent of all BC technology companies are mid-sized or larger (i.e. have more than 50 employees) and where nearly 70 percent of our companies have fewer than five employees.
In most economies, mid-sized companies are the real engine of growth and are fundamental in supporting an ecosystem comprised of re-investable net income, growth financing, and development of skilled talent. They serve as aspirational examples for start-ups and form the natural pool from which large anchor companies will emerge. Looking across North America, other jurisdictions see closer to 8 to 10 percent of their companies being mid-sized or larger. Stated differently, what we have here in BC is a fundamental Growth Gap.
Addressing this Growth Gap is one of the big reasons why we launched our Centre4Growth program in 2010. Having been part of the program from the onset, it’s been personally rewarding to see the difference we’ve made for the nearly 250 companies that have been part of Centre4Growth. We’ve focused on steepening their growth trajectory, applying resources, hands-on coaching and delivering programs that accelerate their growth – and in just 18 months, they’ve realized $36 million in new revenue & investment and created 145 new jobs. We’ve even embarked on ambitious programs like “customer-matching” events, such as our recent DemoDay, so that early commercialization can be supported and championed by local BC companies and so that we can instil a greater sense of home-team advantage in building world-class tech companies. You can view highlights of the day here.
Across our community, there are many programs designed to support entrepreneurs and the growth of their companies – Acetech, Discovery Parks, New Ventures BC, VEF, Wavefront, government programs, regional accelerators and angel/mentor programs to name just a few. Collectively, we’re taking the steps needed as a community to build a stronger, more vibrant tech industry in our province and one that compares favourably with peer jurisdictions on a global basis. That’s the Real Grow-Op for our industry.
To view the complete article, and the rest of the Corporate Recruiters Spring 2012 Newsletter, click here.