Western Economic Diversification Investment in Calgary High-Tech Falls Short of Needed Funding

Oh-oh, I’m sure I’m gonna get some bad emails sent to me on this post. I’ve just read the recent announcement from Western Economic Diversification investing $390,500 in Calgary High Tech.

Not wanting to look a gift horse in the mouth, we certainly appreciate the $$$ and the recognition of the need for federal investment in high tech … kudos to local Calgary West MP Rob Anders for the announcement .. however, it does smell like lip-service.

The amount of the investment falls well short of what’s needed. If you read my prior post Calgary’s simmering high-tech community set to explode, according to a report from the Calgary Economic Development Office, the tech sector in Calgary includes 2,400 companies and employs over 55,200 people … and accounts for 10% of Calgary’s economic growth.

Let’s do a quick calculation. If we divided $390K by 2,400 companies, each firm could get their hands on $162 … enough to take your staff of 8 to the movies. That’s hardly the kind of investment really needed to get the sector moving into high gear!

In comparison to the $390K, Government expenditure on the oil and gas sector including tax, program and direct expenditure totaled $1.5 Billion in 2002. And, while I’m sure the recent announcement in Calgary high-tech is probably not an apples-to-apples comparison (for example, the $1.5B is for all of Canada, not just Calgary), it does give one the impression that we’d collectively prefer to continue to make money digging holes in the ground as opposed to investing to position Canada as a high-tech global leader in the future. Shouldn’t the time to invest in alternate economic growth engines be when oil is at it’s peak … when times are good?

Looking at the $390,500 more closely, it’s divided into two parts. The first $221K is going towards the expansion of the Alastair Ross Technology Centre (ARTC). The building is already packed to capacity and is a wonderful hub for high-tech in Calgary … expansion here only means good things and is money well spent.

The second amount of $169,500 will be spread over three years, to eight companies a year that have developed products ready to be marketed. Again, I applaud the intent … those that swim in the high-tech waters in Calgary know there’s plenty of great products and development teams that are missing the talent and funds to go to market successfully.

But, the amount is not enough. $169,500 / 3 years / 8 companies = awards of $7,041 each. You couldn’t even make a glossy brochure, let alone a website and corresponding adword / measurement campaign, not to mention building distributor networks and channel management. Actually, considering the amount of red tape (application forms + meetings) a company will probably need to go through to get the $7K, I doubt it would be worth the time invested. Dunno … am I misunderstanding this?

SOOOooooo … huge APPLAUSE for the intent … disheartened FROWN for the amount that falls short … contented SMILE that someone is paying attention … hopeful RAISED EYEBROW that this is the first of many such installments (at every level of government).

Time for a steaming cup of joe.

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