Is the B.C. tech sector now the teacher’s pet?
For the first time ever the West Coast tech economy has earned an A grade when compared with other provinces, according to the B.C. Technology Report Card released November 22.
That’s one full letter grade up from the B the province earned the last time the report card was issued by KPMG and the B.C. Tech Association in 2016.
“We’re delighted that in a Canada that’s thriving on technology, B.C.’s doing really well,” said Jill Tipping, CEO of the B.C. Tech Association.
The 2018 report card highlighted employment growth of 24% since 2006 and tech sector revenue growth at a compound 7.3% every year from 2011-16.
While the province also scored an A for economic performance indicators, it made no progress in sector input indicators since receiving a B- in 2016.
The report card noted a persistent talent gap — most notably at the master’s and PhD levels. Meanwhile, innovation as judged by R&D and intellectual property has experienced minimal growth.
But the province managed to add 14,000 jobs tied to the tech sector since 2011, growing to 106,430 jobs total as of 2016.
For comparison, about 128,000 jobs in the province are tied to finance, insurance and real estate, while about 92,000 jobs are tied to forestry, mining, oil and gas, and utilities.
Average weekly earnings for tech workers have climbed at a 10-year compound annual growth rate of 3.8% to land at $1,690.
Meanwhile, most of the tech sector remains weighted towards small companies.
Of the more than 10,000 tech companies in the province, 8,222 of them have fewer than 10 employees.
About 450 companies have more than 50 workers.
However, the biggest growth has occurred in firms employing 20-49 workers, the number of which expanded by 19% from 2014-16.
Growth for larger companies remained stagnant, however.
“It’s really quite striking when we look at B.C. We see that we’ve got a fantastic startup sector and we see that we’ve got some fabulous large technology companies,” said Tipping.
But she added that B.C. has been “really weak” on developing the “missing middle” of companies that generate revenue between $25 million to $200 million.
“That’s not an easy problem to solve for,” said Tipping.
She said B.C. needs to double the number of anchor companies based in the province by boosting access to talent and uncovering more funding for companies.
In January the B.C. Tech Association will launch its new HyperScale program to begin achieving growth.
The organization is in the midst of approaching both Ottawa and Victoria to help facilitate the new program.
In terms of output, the province’s tech sector contributed $17.2 billion to the GDP in 2016.
“Recent years have also seen the sector close the gap between comparable tech sectors in Ontario and Québec when it comes to industry revenues, GDP, and employment rates; and its ongoing growth put BC’s tech sector on a path to eclipse Canada’s national average in regards to productivity performance,” the report card stated.
“Nevertheless, sector challenges and shortcomings remain. For as much progress as BC’s tech sector has made (and continues to make), it also has ground to gain when it comes to fostering its talent, investing in R&D, and delivering more scaled up anchor companies.”
Innovate BC CEO Shirley Vickers said in a statement that the report reinforces BC’s position as a leader in Canada’s tech sector.
“The tech industry here continues to grow as more and more entrepreneurs are choosing BC as their home and creating breakthrough innovative solutions to solve business challenges not just here in Canada, but all over the world,” she said.
“The tech sector is – and will continue to be -- a key economic driver for the province.”