The guest post was originally published on Thirdi Software’s Blog on March 21, 2010.
This is the third post in a series of three looking at what it might take to put Vancouver in the same echelon as the top software and technology centres on the planet. Regions like greater Boston, San Francisco and Silicon Valley, Tel Aviv, Austin, the powerful clusters and mega-regions of Asia. Is it possible for Vancouver to be mentioned in this class? The first two posts looked at potential reasons why it might not be possible, or at least why it isn’t today. Today’s post questions exactly what it is that Vancouver could be best suited for. What could we likely be the global leader in, if anything?
All roads lead to Rome, goes the old adage. At the height of the Roman Empire the major trading networks, supported by superior Roman road building, bridge and aqueduct construction meant that it was the place to be if you wanted to reach an affluent market. Wealth poured in from the vast outskirts of the empire and fueled the urban economy. Like a pressure cooker, Rome condensed this wealth scoured from millions of square km of European, African and Middle Eastern regions and made one of the mightiest cities to ever exist. It was the centre of the universe, when the universe had a centre.
That’s just the problem though, here today gone tomorrow is the loose capital in a globalized marketplace. Though this is pretty much an economic truism I’ll still use a recent example of the fleeting nature of regional importance to illustrate why in my opinion geography is both one of Vancouver’s most valuable assets and at the same time completely irrelevant to its potential as a hi-tech leader. It’s all about the product, or the service.
It was recently announced that the Chief Technologist of, Applied Materials, one of Silicon Valley’s most prominent firms, would be relocating to Beijing where the company’s newest and largest facilities were recently built. China has been booming for several years, developing new automobiles, computers, and gadgets for an increasingly affluent population. Applied Materials, along with many other makers of technology products, rely on proximity to markets, they’re one of the premier producers of components for semiconductors, solar panels and flat-panel displays. Two things that are likely going to be in increasing demand in China are energy, and entertainment. Therefore, putting facilities right in the heart of the market makes sense. Applied Materials are like the merchant who follows the road to Rome in this instance.
In my previous post, Jonathan Kassian, Manager of Research & Communications at the Vancouver Economic Development Commission, helped me cover some of the nuances of Vancouver’s economic competitiveness and challenges in regards to other Cities, regarded as high-tech and software leaders. Airline restrictions, proximity to markets, incentives, cost of living, and other details were picked apart a little just to give an idea as to how complex and subtle the issues and challenges in Vancouver could be. So if it’s that complicated, what is the path of least resistance if Vancouver is to become a global powerhouse in something?
If we’re too far removed from markets, not connected enough globally, and too expensive to locate manufacturing in, then technology components, boxes of software or hardware, and other physical products involving global transportation are largely out of the question. And so because of this other types of industries that overcome or avoid these obstacles will flourish, and are flourishing here. In my estimation, the most innovative and successful companies in Vancouver are increasingly internet based, offering SaaS (Software as a Service) or a product/service that uses instant electronic transportation. By transcending the challenges of geography the internet offers a forum for Vancouver companies to reach the global market without worrying about airline routes, proximity to markets, the costs of office or manufacturing space, and traditional “all roads lead to Rome” barriers. While some technologies and some components are made here, the major players in our high-tech industries (which I use as an umbrella term for ICT, high-tech, digital arts, eCommerce and other internet software developers) produce “light” goods. And by light I mean, they’re light to transport and can be downloaded almost as fast as the speed of light. These include entertainment, digital animation, eCommerce, apps development, games, software etc. If our greatest challenges lay in economic geography (cost of living, cost of office space, scarcity of office space, geographic isolation and so on) then companies that offer online solutions or products and services that transcend the challenges of space and cost will likely continue be the most successful here by and large, the other pillar of this theory rests on Vancouver being a highly creative city that nurtures innovation and art; particularly in the digital medium(s).
A creative population makes for creative companies with creative business models and business cultures. Companies are increasingly adopting flex hours, mobile or remote working- because let’s face it, when the sun is shining in Vancouver we make the most of it. We network and collaborate where a lack of large management structures leaves a career path vacuum. We need to run lean businesses, that can adapt quickly and produce products involving minimum storage, shipping, or even packaging. Yes Vancouver is expensive, no one argues that, but that forces the companies here to be even smarter and more innovative. We might not be Hollywood, but our digital effects and animation studios are consistently creating internationally renowned and award winning products. The talent and resources in the city have drawn the interest of Pixar, who announced they will be opening a 20,000sq foot studio in downtown Vancouver, because who wouldn’t want to locate their business here if they could?
The success of recent post production studios, digital effects companies, animation studios, and Pixar opening shop here combined with the recent creation of Great Northern Way Campus signals to me that digital entertainment, a massive and growing industry, is going to continue to be one of Metro Vancouver’s most prominent sectors for a while to come. This makes perfect sense, we’re a creative population, not a manufacturing population. And as was pointed out in the two previous posts Vancouver’s business culture plays a powerful role in the kinds of companies that locate here and begin here. We might not have MIT, but our universities and other post secondary institutions are world class, and GNWC is the culmination of those institutions in an innovative and collaborative environment. The Provincial Government has also recognized the importance of the digital entertainment industry and has created incentives to aid in its growth. What’s particularly interesting to me is how as time goes by, the video game, software developers and film industries are beginning to coalesce, and nowhere does it seem to be happening more seamlessly than in Vancouver. Will we see a new mega-sector evolve from this? (or simply re-categorize our economic sectors?) If we do, that might make Vancouver a globally recognized cluster for whatever this sector becomes, or is named. A combination of digital entertainment, eCommerce, social media, software development and some things we haven’t even seen yet. It’s an exciting possibility.
I believe that our rising stock as a global leader in digital entertainment, online content, software as a service and other light products looks pretty good. While we’re in no way limited to just these light products, they represent to me the best chance of Vancouver being recognized as a global leader in the information age. Digital animation, software language and other skills can be taught, creativity itself is something that can’t be. It’s this intangible and prized trait that Vancouver as a city nourishes, welcomes and inspires. This combined with the economic and geographic nuances of firm location creates an environment where the creative sector finds ways to create light products with major value and impact. Does this put us in the same category as San Jose, Boston, and the rest? Will all roads lead to Vancouver? Maybe, but the combination of strong and longstanding clusters with major management structures, the presence of some of the most highly praised universities and technical schools on the planet and proximity to larger markets will likely make those places dominant for a while to come, but Vancouver is definitely mounting a charge. We just need to realize what we’re good at, and become the best at it.
I think we’re on our way to doing that.