14 Oct The Voice – Scaling up BC’s tech ecosystem
Together with our partners at KPMG, we released the latest installment of our BC Technology Report Card for 2016, a comprehensive analysis that compares the BC tech sector against other sectors in the province and against tech sectors in other jurisdictions.
Over the past two years, the tech sector has continued to outperform other sectors in the province, posting an impressive 14.4 percent growth rate since the last report card. On a national basis, BC’s tech sector grew faster than the tech sectors in Ontario and Quebec, and impressively outperformed the US national average. One of the contributing factors was the expansion in the number of medium and large-sized firms that grew by a healthy 14 percent since the last report card.
The 2016 BC Technology Report Card illustrates the consistent, sustained performance of the BC tech sector – which has grown by 91% in 15 years and continues to outpace the growth in the overall BC economy by nearly two to one. The BC tech industry is a cornerstone of the provincial economy, accounting for:
- $26 billion in revenue – growing in excess of 6% per year
- $15 billion in GDP – 3rd largest contributor to the provincial economy
- 92,700 employees – more than all of BC resources industries combined
- $8 billion in wages – with jobs earning 76% more than the BC average
The latest report card scored the province’s technology industry with an ‘A’ grade for its performance in the provincial economy and a ‘B-‘ grade for its performance on the global stage, an improvement from the ‘C+’ grade in the 2014 report.
The report identifies access to talent as the biggest constraint that BC’s technology companies now face in expanding their businesses. Although employment grew at a healthy 22 percent in the period from 2004 to 2009, the growth rate in jobs has softened in the past five years, growing at just 5.7 percent. During the same period, tech wages increased by 25 percent to over $82,000 per year, a 76 percent increase over the average BC wage. While the tech sector continues to provide among the highest paying jobs, the companies trying to recruit are increasingly sounding the alarm on the need for talent, particularly in technical and executive roles.
The key findings of the 2016 report showed:
- The tech sector continues to be a significant growth engine in BC. Unlike other sectors within the BC economy, which can have greater fluctuations in performance, the tech sector has been a consistent performer over the past 10 years.
- The composition of companies is maturing. Since the study two years ago, there are now a greater number of medium and large-sized companies but there continues to be a need to encourage further growth and scaling of companies through the combined efforts of government and business.
- Jobs and talent remain key issues. As companies have grown, the tech sector is experiencing challenges in sourcing the necessary talent to fuel further growth.
- Capital availability has improved. From 2013 to 2015 there has been resurgence in venture capital investments but there remain concerns about the availability of early-stage funding, reinforcing the importance of the province’s new venture capital fund.
- R&D and exports have room to grow. While there has been progress in recent years, the BC tech sector continues to lag behind the performance of other jurisdictions.
The findings from this report combined with extensive consultations with BC tech companies were incorporated into a 2016 update to the BC Tech Association’s 4-Point Plan – a policy framework that outlines 16 actions across four pillars that we believe will strengthen the BC tech ecosystem, improve access to capital, expand access to procurement and global markets, invest in world-class talent and encourage companies to scale up to become globally competitive.
1. Invest an incremental $100 million in post-secondary to expand tech grads.
2. Support the home team and adopt procurement programs to become customers of BC tech companies.
3. Streamline tax credit programs like SR&ED and the angel tax credit to broaden eligibility.
4. Improve the immigration system to attract the best talent from around the world.
While the growth trend of the BC tech sector is encouraging, the competitive framework for the BC tech industry is not national – it’s global. Cities and regions all over the world are looking to capitalize on the technology shift – to become a top ten tech ecosystem, British Columbia will need to undertake strategic policies and investments that will further accelerate the growth of the local ecosystem to forge a stronger outcome.
The province’s #BCTECH Strategy is an important framework outlining priorities to grow the tech sector. Acting on the 4-Point Plan will take that strategy further and will be critical to successfully grow the strong base of BC tech startups into global champions, support the province’s and Canada’s Innovation Agenda and drive long-term economic and social prosperity for all British Columbians.