How close is Vancouver to being a global technology and software leader?

The guest post was originally published on Thirdi Software‘s Blog on January 30, 2010.

I don’t know, let’s find out together. This post is one in a series that examines this question from different angles.  Today we look at one aspect in particular, the poor availability of commercial office space and the impact it may have on the city down the road.

I was recently talking with Boris Mann of Bootup Labs and he postulated (and I agree) that due to their cost effectiveness and proximity to great cafes, pubs and restaurants, that Gastown and Vancouver’s Downtown Eastside have become hot spots for software startups. No offense to Yaletown, for years it’s been the trendiest and most upwardly mobile neighbourhood in the city, but because of this it’s also become quite expensive. And while he was excited that parts of Vancouver’s inner city (the Flack Block in particular) had become magnets for fledgling technology companies, when talking about the city as a whole he seemed a little less sure that Vancouver could be included right now in that top tier of globally competitive cities like Boston or San Francisco. “Vancouver itself must grow up and be recognized as a whole. We *need* to point to universities westwards (UBC) and eastwards (SFU Burnaby Mountain), the Microsoft Dev Center in Richmond, the EA buildings in Burnaby, and so on.”

As authors like Richard Florida have stressed, cities need to attract and retain top talent in order stay economically healthy and competitive. It’s a constant process of keeping up with Boston, with Tel Aviv, with the Bay Area, in amenities, quality of life, culture, safety, aesthetics and other supports, and making sure that companies have access to the best possible research facilities and a highly educated work force. That work force is both created through the quality of nearby colleges and universities and through the gravity that is naturally induced by an accumulation of the above mentioned things. When an innovative or large company appears on the scene it creates gravity, it creates spin-off companies, and it challenges everyone to raise their game. So it’s important to both see those companies develop here , or move here.

Vancouver wins hands down in aesthetics, quality of life, safety (minus the earthquake we’re all waiting for) and other supports (dining, leisure, soft laws concerning marijuana?) but there are some things that we’re lacking. It might be cohesion. Is there a disjointedness caused by the geography and inter-competitiveness of the partner cities in the region? As Boris points out, some collaborative effort between competing clusters or competing cities might just make one big cluster and put us in that upper echelon. But while Richmond, Burnaby and Surrey have either seen some large software companies locate offices there or have announced major plans to create office and mixed use developments, Vancouver has been running out of space fast.  Well actually that’s not true, we’ve been running out of space for companies. A slow and steady exodus of tech and software companies out of the downtown core would be a devastatingly bad thing (for Vancouver) if Richmond and/or Surrey started to displace Vancouver as the main cluster of high tech and software companies in the Lower Mainland.

Because of the profitability of luxury residential condos, developers haven’t produced enough commercial office space in the downtown core to accommodate any large companies that may want to have offices there. Microsoft had to locate in Richmond, and some would say so what?That’s still Vancouver right? But that’s millions of dollars a year that local businesses in the downtown business district aren’t getting from coffee breaks, catering, office supplies, etc. And not only that, but if any technology and software companies or other service providers want to do business with a large company like Microsoft, they could have had the convenience of a quick taxi or brisk walk between offices, grab a drink with associates after work and bounce casual ideas around, but now they’ve got to head down to Richmond (boring). SFU, BCIT and UBC campuses downtown or relatively close, Microsoft in Richmond. Thirdi office in Yaletown, Microsoft in Richmond. See the pattern here?

It could be argued that Microsoft is not always the friendliest company especially to startups, but I use them only as an example. If a large company with a reputation of working with startups or smaller firms wanted to find a space in Vancouver proper it would be extremely difficult, as Microsoft proved. And perhaps most importantly, if a local company started to experience strong growth and needed to take on more staff and more space where would they expand to? The fact that there is simply no commercial space left in Vancouver and none really being built, means problems down the road if you ask me. And city council isn’t terribly excited to add more commercial high rise space downtown because of the risk of blocking resident’s views by obstructing our “view corridors“. So it’s a bit of a catch 22 in my opinion, companies want to come here for the beautiful views but we can’t offer them office space because it will block the beautiful views. While cheap office space for startups in Gastown and the DTES is great, this large scale component of Vancouver’s ability to attract and retain larger companies may have a very negative impact on our ability to become a true global leader moving forward.