A new study ranks Vancouver’s tech sector third in the nation by size, but industry veterans say the sector hasn’t come close to reaching its growth potential.
A Brookfield Institute for Innovation + Entrepreneurship study ranked Vancouver third in terms of overall employees behind Toronto (286,100) and Montreal (222,200). Vancouver’s tech sector employs an estimated 111,700 people, more than construction and manufacturing and only less than retail.
Eric Bukovinsky, a principal at venture capital firm Yaletown Partners, says Vancouver is still in metamorphosis.
“It’s not dissimilar from making that leap from horse-drawn transportation to a combustion based engine,” said Bukovinsky. “The reason I like that analogy is it also creates a relative comparison to where everybody else is. (In) Silicon Valley, which is operating on fully electric flywheel technology, they’re out driving Ferraris and we’re still on Model Ts. We’ve gone through a great shift but there’s still a long way to go.”
Bill Tam, president and CEO of the BC Tech Association, described the province’s tech sector as a coming-of-age journey. No longer nascent, the industry is now maturing as a key economic player in a town long known as a resource hub.
“If you look at the B.C. tech sector, it is really only about 30 to 35 years old, compared to Silicon Valley which is about 75 years old. So in the maturation process for us, I think we’ve moved from that awkward teenager stage to a solid adolescent.”
Michelle Sklar, vice president of marketing for startup accelerator Wavefront, says Vancouver’s tech sector is now hitting its stride.
“We may be in that early ‘adolescent stage,’ but as (American author) Ray Kurzweil notes, (in) the ‘law of accelerating returns,’ I expect we will grow up quite quickly,” said Sklar.
Creig Lamb, policy advisor for Brookfield, said Vancouver and B.C.’s next steps will be crucial to the sector’s development.
“Moving forward, it will be important to ensure tech firms in B.C. have all of the financing and supports they need to continue to thrive and scale to maintain B.C.’s position as a prominent tech economy.”
According to the Brookfield study, The State of Canada’s Tech Sector, the industry was directly responsible for $117 billion or 7.1% of Canada’s economic output in 2015, greater than finance and insurance-related businesses. Approximately 864,000 Canadians are employed in the tech sector, which makes up 5.6% of Canada’s total employment. The tech sector was by far the largest investor in research and development: more than $9.1 billion was invested by nearly 71,000 firms, representing 6.1% of all Canadian businesses. Tech sector employees earn approximately $67,000 annually, compared to the national average of approximately $48,000, said the study.
According to a 2014 BC Technology Report Card by KPMG, the B.C. tech industry has more than 9,000 companies across the province. The majority of these are small enterprises, with 90% of output related to services. KPMG estimated the B.C. tech sector generates $15 billion in GDP.
