Last month’s launch of the 2014 British Columbia Technology Report Card painted a fascinating picture. While the report shows that the tech industry in BC is a real engine for growth and a top contributor to the provincial economy, it has a way to go to reach its full potential.
A combination of factors, including a historical lack of Venture Capital (VC) funding (both local and from outside Canada) and a comparatively young sector, has led to a community that is heavily skewed towards businesses of 50 people or under. In fact, the majority of BC tech companies employ just four people or less. It’s clear that much more diversity is needed if BC is to become globally competitive.
Much of the commentary since the launch of the Report Card has been around Vancouver’s need for more VC investment. While BC has a healthy level of angel investment, locally sourced early stage VC funding has been in decline over the last few years. I believe this stems from a culture of early exits and risk aversion by Canadian companies and VC firms. A lack of big exits means little investment into new startups to propagate growth.
Speaking from experience, growing from the 15-person startup to the 100-person small business is one of the hardest stages to navigate in a company’s development and cash flow is absolutely essential. So a decline in funding is an obvious concern. But VC money alone is not enough. A successful transition from startup to SMB requires talent, deep expertise, and experience, in addition to a great idea and solid funding.
So where will that expertise come from in a community with so few large companies?
It’s a bit of a chicken and egg situation. While we can and should grow more anchor companies organically right here in BC, it will take time. And growth will be limited without a deeper pool of experienced talent to draw on.
We need to think about solving our talent problem as a multi-pronged approach. As well as nurturing local companies to be future anchors and increasing the number of relevant undergraduate and graduate degrees, we need to be attracting and retaining already established multinationals. With deeper pockets and fully-fledged training programs, these companies can more rapidly expand our talent pool and strengthen our corporate infrastructure. As well as attracting top people from outside the province, well-known, well-funded companies can help in creating a more “sticky” community for our tech talent—so often tempted to pursue hipper, cooler, better compensated roles in the US. We need high profile innovative, exciting companies to attract smart people and to compensate them accordingly. In my opinion, this has always been a challenge for Vancouver—compensation has traditionally not been aligned with cost of living and this needs to change if we are to compete.
Equally as important is the role that big businesses play in driving the development of a new generation of senior managers, thanks to structured professional development programs and investment into the wider community.
Fortunately, we are already starting to see more big tech businesses in BC, with companies such as Microsoft and Amazon Web Services expanding their operations, and of course Dun & Bradstreet setting up a global product innovation center in the heart of Vancouver. While the introduction of these bigger firms may put pressure on our local talent pool in the short term, I believe the introduction of more multinationals is good for BC in the longer term. We’re already seeing wages rise with workers in tech earning 66% more than the BC industrial average, and I expect to see a whole host of benefits for the sector as these businesses get established in the province.
Dun & Bradstreet is a case in point. D&B acquired Indicee in April of this year. As Indicee, we had a team of bright, entrepreneurial people. But like most startups, professional development money was limited. Since our acquisition by D&B, we have the backing of a 5000-strong global company, complete with professional development programs, and community engagement budgets.
As our team grows, we are much more able to train, educate and mentor individuals into leaders. For example, employees have access to programs such as the D&B CEO Leadership Program—a series of in-person workshops designed to develop and grow business leaders through sustainable, human performance strategies—and D&B’s regular “Rattlesnake Pit” competition, designed to identify and mentor entrepreneurial employees with innovative ideas (“intrapreneurs” if you will).
We’re also welcoming our first intake of co-op students to the Vancouver team in January and have established our own “Ministry of Learning” program to facilitate knowledge sharing internally. Of course, as a part of a much bigger team, we’re reaping the benefits of working directly with D&B teams and business leaders from all around the world in order to solve a global Big Data problem.
Diversity is key to a thriving tech sector. It’s an incredibly exciting time to be working in technology in BC and with more big business being drawn to our province, the future for our industry is very bright. I’m looking forward to seeing even more growth in the next BC Tech Report Card as we take full advantage of the opportunities in front of us.