BCAdvantage 2008; Business and investment across British Columbia

Businesses are starting to realize that consumers want content in multiple ways, such as games, websites and mobile content – and that’s good news for new media in B.C.

By Corey Van’t Haaff

British Columbia isn’t just leaving its mark on the global technology scene; in some cases, it’s repositioning the entire map with itself smack-dab at the centre of the world.

This isn’t just a cheerleading rah-rah for B.C. Instead, it’s a hard-earned and well-deserved world-class reputation for both technology and talent.

Cheryl Slusarchuk, president of the Premier’s Technology Council, said the province has made great strides with bridging the digital divide. Ninety-one per cent of the province has broadband coverage, but it’s not enough.

“We’re ahead of the other provinces,” she said, “but we still have to move it forward to the next step. I don’t know what that should be yet, but broadband is necessary to support economic development, particularly in the regions.”

She also credits the province’s energy plan as good for B.C. from an economic development perspective.

“There are 250 renewable energy companies in B.C. Can you believe that? It’s a huge number; lots are small, lots are doing R and D. Lots will get bought out by U.S. companies but doing R and D here … [that] drives economic development and creates good jobs here, and that’s what we want – good interesting jobs in 10-15 years.”

People bottleneck

Of course, those good jobs need to go to good workers, and people, she said, are still the challenge. “Relatively speaking, the bottleneck is finding qualified, talented, engaged people. People aren’t talking about a lack of capital, not for two years. More and more acute is the lack of people.”

The answer is in educating, re-tooling and immigration. She said there needs to be more emphasis on science and math in school, as those add to productivity and the GDP. She said we need to re-tool workers around the forestry industry who may not have jobs but could be re-trained in new areas. And we need to allow immigration.

“The biggest constraint in 2008 easily is people,” she said. “We need every person we can get who is qualified.”

Renaissance funds

Where money is concerned – and it is a concern – there’s help on the horizon. The B.C. Renaissance Capital Fund is not here yet, but it’s close, and when it comes, it should attract more private venture capital investment into B.C., including tremendous opportunities in clean energy technology, life sciences and information technology.

“As a province, we’ve invested significant resources to support research and development in these sectors. Now, it’s important to look at ways we can help to transform that research into opportunities for B.C.-based companies and workers,” said Colin Hansen, minister of economic development. “Promoting B.C. as a vibrant and sustainable marketplace for venture capital investment will help support made-in-B.C. innovation, diversify our economy and create lasting benefits for our province.”

He said the province is currently negotiating with experienced fund managers that have successful track records and the ability to raise individual institutional funds exceeding $100 million.

New media

Also termed digital media, it’s media designed to educate, inform and entertain. Think websites, e-learning, video games, digital animation, mobile content and social networking.

Kenton Low, president of New Media BC, said all areas of new media saw continued incredible growth. He mentions Club Penguin of Kelowna as a bright light last year. The online world for kids was bought by Disney for $350 million. Such online worlds are made possible by Web 2.0, which allows for stronger, faster applications.

“We’re seeing continued growth of companies in the forefront in various areas of new media – a total of 1,100 in the new media space in B.C.,” he said. “Very few people know of the visual effects done here: The Da Vinci Code, Pirates of the Caribbean, Night at the Museum. They are big blockbuster movies. It’s pretty exciting. Companies in B.C. have that type of talent to generate world-class results.”

He said businesses are starting to realize that consumers want their content in multiple ways, such as games, websites and mobile content. It’s one of the reasons why he predicts that new media will be an even more significant industry in B.C., facilitated by further collaboration between government, industry and academia. The master’s program at the Great Northern Way campus in Vancouver, he said, is an example of B.C. being able to turn out young talent “well-equipped to take their places in digital media when they graduate.”

Warren Franklin, CEO of Rainmaker Entertainment, said B.C. is on its way to being established as a global centre for new media.

“It’s kind of exciting to be able to position ourselves as one of the few places in the world where you can really get top-quality world-class digital animation and gaming – a converging skill set of gaming with Radical and Entertainment Arts, and digital animation companies. It’s a pretty unique position compared with the rest of the world. Very few centres have the level of interactive work that goes on.”

The problem, he said, is one of critical mass. Only as we build up abilities in animation and digital film will we see more traditional theatrical properties delivered.

“Most business is built as a service business. We’re developing games, TV shows, feature film projects where the copyright is owned elsewhere,” said Franklin. “The challenge is we need the mechanism to finance and bring investors so we are owners of the copyright. It’s a hard transition to make.”

Wireless

In Deloitte’s list of fastest-growing wireless companies in North America, four of the top 50 were in B.C., said Michael Bidu, executive director of WINBC. Both consumers and entertainment are looking for wireless technologies and services, which explains why B.C. should see tremendous growth.

“One thing we managed to do in B.C. is we have received funds from the provincial government’s advanced education to create a centre of excellence for accelerated commercialization. It helps companies get to market faster. We can take any wireless technology and make sure it performs and is ready for the market much, much faster,” he said.

The 2007 BC Wireless Industry Survey counted 250 companies, up from 216 in 2004. Direct employment in the industry grew from 3,700 in 2002 to 6,000 in 2007. Revenue growth showed an increase of 54% between 2004 and 2007, from $649 million to more than $1 billion. 2009 revenues are expected to grow by at least 20%, it said.

Bidu said that growth in general is coupled with good financial performance and innovative technologies.

“We asked our companies how many are cash flow positive. 53% are cash flow positive and 27% are expected to be in the next year.”

He said his member companies hold 141 patents already, with 237 pending.

“It’s a good sign of innovation in our province. It’s a highly educated, very smart work force,” he said, adding that serious growth is being seen in location-based services, enterprise data solutions, VoIP/voice, municipal Wi-Fi and wireless ISB, and mobile content.

“It’s not just one big animal out there. It’s very diverse and versatile.”

The challenge, he said, is to export our technologies beyond Canada and the U.S.

“We have what it takes,” he said. “We have to find ways to go there. Access to markets and the ability to sell is a critical success factor.”

Life sciences

“We’re starting to see some new companies beginning,” said Karimah Es Sabar, president of LifeSciences British Columbia. “I see that as a good sign that new companies are being established, as it’s harder today than five to 10 years ago. They need the technology to be more developed and are finding that’s not easy to get for a young company.”

She added that the Centre for Drug Research & Development is playing a pivotal role in nurturing early stage technology out of academia and getting it to a proof-of-principle stage as quickly and robustly as possible. The challenge, she said, remains money and talent, but when a company does well, it gets acquired.

“When you build a good company, people want to buy them,” she said. “If we don’t maintain the company here, we don’t fully realize the commercial potential of those technologies. We don’t build critical mass. With it goes the talent. We have to focus on building a leading life science centre here for the long haul.”

She also said that increasing international pharmaceutical investment into research is a good thing, but B.C. needs to nurture that relationship. There are no big pharma offices and no physical presence here in B.C., she said.

And that’s a problem.

Scott Cormack, president and CEO of OncoGenex Technologies, a private company actively transitioning to a late stage company with two Phase 3 prostate cancer trials in 2008, said that in addition to finding money and qualified people, the lack of mentorship from pharmaceuticals hinders B.C. He said the pharmaceutical companies have development and marketing experience that is just different than the experience base here in B.C. The good thing is that people who work under the senior U.S. pharmaceutical executives learn from them in that environment, then can come out and do their own thing, bringing that unique and necessary perspective. The other really good thing is that our B.C. brand of technology and attitude is unmatchable. “The entrepreneurship spirit here defies the laws of nature,” he said. •

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