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In the News...Tech firms prize Vancouver's climateGlobe and Mail - November 11 2002 He also mentioned that, for his company at least, Vancouver is a bargain. "It's not that complex," the president and chief executive officer of California-based PeopleSoft Inc. said last week. "We were looking for a high number of highly skilled workers, at a reasonable cost and a favourable business climate. We found that in Vancouver." Such an assessment is welcomed by technology advocates such as George Hunter, the president of the British Columbia Technology Industries Association and a long-time booster of the province's technology sector. And he's not worried by the notion of Vancouver being seen as a source of affordable talent for foreign companies. Business is global, he and others in the industry say, and for every multinational that invests in Vancouver, another sets up shop in Bangalore. Just last month, Vancouver-based software company Pivotal Corp., which has downsized its North American work force twice in the past year, said it planned to launch a subsidiary in India. If the 1990s were all about growth for B.C.'s high-tech sector, Mr. Hunter and others say, this decade will see growth and maturity, with home-grown companies, branch plants and research and development shops tapped into head offices in Santa Clara or San Jose all becoming part of the mix. "The fact that we have a great cost environment means we should be able to springboard more quickly when the marketplace rebounds," Mr. Hunter said. Signs of a downturn are easy to find. During the past year, home-grown companies such as Pivotal and wireless modem manufacturer Sierra Wireless Inc. have cut hundreds of employees and restructured. Some startups have disappeared. Sales tumbled and have yet to recover at chip maker PMC-Sierra Inc., which has executive offices in Santa Clara, Calif., and its research and development centre in Burnaby. Those setbacks reversed the trend of the 1990s, when high tech was the bright light on B.C.'s economic horizon. On average, high tech grew more than twice as fast as the economy as a whole over the past decade, according to a profile of the British Columbia high-technology sector released last month by the provincial statistics department. Between 1992 and 2001, constant dollar gross domestic product generated by B.C.'s high-tech sector increased every year except 1996, when it slipped by 2.7 per cent. Those gains pushed high tech's share of overall provincial GDP from 2.1 per cent in 1991 to 3 per cent in 2000. Last year, its contribution dropped back, to $3.3-billion, or 2.9 per cent of overall provincial GDP. That makes high tech a relatively small player. The biggest, generating 12.1 per cent of B.C.'s GDP, is the financial, insurance, real estate and leasing sector. But the "fledgling" aspect is gone. Creo Inc., which makes programs and systems used in the graphics arts business, last year became the first B.C. technology company to break the $1-billion mark in sales. In second spot, by revenue, was MacDonald Dettwiler and Associates Ltd. It posted sales of $481-million in 2001 and, unlike many of its peers, stayed in the black even as the technology market soured, turning a profit in each of the past three years and in the first three quarters of 2002. Springing up around established companies, such as MDA and Creo, are the upstarts, in areas including biotechnology, fuel cell and wireless technology and game development. Foreign participation in local ventures is common and takes many forms. Shell Hydrogen last week announced a $7-million (U.S.) investment in Vancouver-based QuestAir Technologies Inc., a private company developing gas purification systems for use in fuel cell and other markets. Privately held Internet security firm Inkra Networks Corp. of Fremont, Calif., has about 60 employees in California and another 35 in Burnaby, a setup that Inkra vice-president Dave Roberts said makes for affordable research and development and other advantages. "In general, it's been phenomenally positive," Mr. Roberts said. Inkra has found it easier to hire "and retain" qualified employees in Canada than in California, Mr. Roberts said, although the hiring squeeze in Silicon Valley has eased with the collapse of the dot-com sector and widespread downsizing by tech companies. PeopleSoft's Mr. Conway also referred to employee retention, saying that the average technology worker in California changes jobs every 18 months. For a company attempting to build a low-cost, stable work force, that kind of turnover is not ideal. Hence, PeopleSoft not only has its eyes on current members of the labour pool, but future ones: Part of the company's recent investment in British Columbia was a $4-million (Canadian) software grant to the B.C. Institute of Technology. The grant is a way to promote the company's technology and help produce graduates with the type of skills that PeopleSoft requires. Mr. Hunter, meanwhile, remains convinced that high tech's contribution to the provincial economy will grow, driven by home-grown companies, foreign-owned branch plants and various models in between. "At some point, yes, I think you'll see B.C. heading toward more of a modern industrial mix, where technology emerges alongside [mining and forestry] as a major contributor," he said.
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