Why BC’s white-hot tech sector is still being outpaced by its neighbours

Content provided by Business in Vancouver

While B.C.’s high-tech sector continues to grow at a warp speed pace, the province still has a long way to go to catch up to neighbours across Canada and the U.S., according to a study released Friday (June 19) from BC Stats.
“B.C.’s high tech sector continues to face challenges, such as a smaller domestic marketplace and an often tight labour market, which may give B.C. companies a competitive disadvantage, particularly with many of their American counterparts, but also with high tech firms in central Canada,” the province’s central statistics agency said in its annual report examining B.C.’s high-tech sector.

Despite those challenges, gross domestic product (GDP) of B.C.’s high-tech sector grew 2.2% in 2013 — the most recent year BC Stats examined.

The high-tech manufacturing sector led the way, growing 8.8% to a record $1.6 billion. The previous record was set in 2000, when high-tech manufacturing GDP reached $1.5 billion.

“British Columbia’s high technology sector continues to grow and is playing an increasingly important role in the provincial economy,” the study concluded.
“However, compared to other jurisdictions, particularly American states, British Columbia’s high technology sector is still relatively small.”

Overall, high tech accounted for 6.5% of the province’s GDP in 2013 compared with 23% in Oregon and 21% in Washington state. Quebec, which had the highest proportion of its GDP originating from the high-tech sector among all provinces, looked to this sector for 9.3% of its economy.

Thirty-two states placed ahead of B.C. in terms of the sector’s importance as an employer.

The study speculated the reason behind B.C.’s low ranking relative to other jurisdictions comes down to manufacturing.

In the U.S., about 30% of high-tech jobs were in manufacturing compared with 15% in B.C.

“Given that businesses in manufacturing industries tend to have more staff on the payroll than those in the service sector, this could explain why high tech workers comprise a larger share of the total employed workforce in the U.S. than in Canada,” the report said.

Those same high-tech manufacturing workers also appear to be at a disadvantage when it comes to the company payroll.

High-tech manufacturing workers made an average of $1,080 compared with $1,120 a week for average workers in the manufacturing sector in 2013.

“B.C.’s tech sector is unusual in that workers in the goods sector earn less than those in the service sector,” the report said.

To compare, B.C. workers in high tech’s service sector earned an average of $1,440 a week, while the weekly average for workers in the service sector as a whole was $820.

But the sector continued to prove to be a reliable source for jobs, rising 1.4% to 86,800 positions. That’s still down from the peak of 88,270 positions in 2008 before the recession doled out big job cuts.

The province also added 728 high-tech businesses, growing 8.1% to 9,738 business compared with 2012.

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