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In the News...Tech firms thriving in B.C.The Vancouver Sun- Feb 26, 2003 Peter Wilson The B.C. Techmap for 2003 reveals growth, diversity and vibrancy that have survived the meltdown, The Sun’s Peter Wilson writes. The tech bubble may have burst, but a couple of years later the technology industry in British Columbia is still standing, vibrant and ready to grow. That’s the message handed out Tuesday when the vast BC Techmap for 2003 – featuring 588 active high-tech companies and research organizations and their 350 now-defunct predecessors – was unveiled by PricewaterhouseCoopers. “Yes, the tech bubble did burst, but this is the remains and the remains are a vibrant, well diversified, well capitalized and well-experienced industry with a lot of world-class technology,” said Michael Calyniuk, the architect of the $150,000 map and a PricewaterhouseCoopers partner. While the B.C. Techmap – financed in part by the provincial and federal governments – is itself an eye-boggling collection of boxes, names, dates and connecting lines, Calyniuk said the genealogical chart reveals an industry that, since the previous map was created in 1997, has experienced: - Substantial growth: There were 410 tech organizations on the map in 1997. Today there are 910. Since 1997, the percentage of active companies has grown by 91 per cent to 588. - Increased diversity: In 1997, 90 percent of tech companies were in four categories – software, telecommunications and wireless, electronics and peripherals and life science, Now these account for only 75 per cent with new media moving up from two to 10 per cent (from 11 to 100 companies), energy technology from two to four per cent and services rising from three to six percent. - More geographic dispersion: Vancouver Island now has 100 tech organizations on the map, up from 48 in 1997. The Interior has 49, up from 13, and northern B.C. has two where it once had none. Still in the lead is Vancouver with 753, up from 349. - Good revenues: Provincial technology revenues were more than $6 billion in 2001, with Vancouver-based Creo being the first company to achieve $1 billion in revenue. - Strong research base: The largest family tree on the Techmap is that of the University of B.C. with 54 companies that are spinoffs of UBC research. - Growing acquisitions: The 1997 Techmap showed 60 acquisitions of B.C.-based technology companies. Now acquisitions number more than 150, increasingly by international firms. While the last finding may be seen by some observers as a negative development, Calyniuk disagrees. “In many cases, once these acquisitions took place, the companies remained here. And, in fact, the multinationals and other companies have actually supplemented their operations here with further support.” Tied to that Calyniuk, is that such acquisitions open up the companies to international exposure they otherwise would not have had. In terms of the emerging sectors, the map, said Calyniuk, shows that in energy technology, a fuel-cell cluster has developed around the Proton Exchange Membrane Fuel Cell technology developed by Ballard Power Systems. In biotechnology, the anchor has been QLT Inc. Calyniuk said the development experience and talent fostered at QLT has spread throughout the industry. The biotech family tree, he adds, can be traced back to the strong research infrastructure provided by UBC, which has fostered more than 40 biotechnology companies, including Infalzyme Pharmaceuticals and Forbes Medi-Tech. In wireless, the cluster, while it has a substantial hardware component, is primarily focused on providing wireless business solutions and making wireless usable for carriers, companies and consumers Another aspect revealed by the map, said Calyniuk, is that B.C.-grown companies are taking advantage of a beneficial research and development environment in the proving to build a global technology presence. Some of the examples offered were: - MacDonald Dettwiler and Associates designed and developed Radarsat-2, the world’s most advanced high-resolution radar earth observation program. - The world’s top electronic games developer, Electronic Arts, has its largest development studio in Burnaby. - The leading fuel-cell technology was invented and developed in B.C. by Ballard Power Systems. - The largest of IBM’s 14 international innovation centres is in B.C. - Epson has its only non-U.S. research and development centre in B.C. - Nokia is designing the next generation of wireless devices at its research and development centre. - PeopleSoft has its North American support and development centre in Vancouver. Calyniuk said one of the discoveries that came out of the Techmap is that are 80 to 90 people he describes as the Circle of Influencers – a group of entrepreneurs, investors, core techies, tech organization members, etc. – who are the people forming and influencing the industry in B.C. “That group has a strong belief and a passion and they’re here for the long haul,” said Calyniuk, who said he couldn’t reveal their names because much of the information gathered about them was confidential. He did, however, single out John MacDonald and Vern Dettwiler, who founded MacDonald Dettwiler almost 30 years ago, along with Pivotal co-founder Norm Francis and Geoffrey Ballard, founder of Ballard Power Systems. Calyniuk added that B.C.’s tech industry is now beginning to attract exposure from the outside and is bringing in CEOs and senior executives from the United States. “You wouldn’t have seen that two or three years ago,” he said. “Part of it is the economic climate and part of it is our cost structure. And I think the Circle of Influencers has a lot to do with it. People look at that group and say ‘this is a good place to be. I like being around those types of people – those are people that can get me ahead.’ ” Calyniuk said B.C. is becoming more attractive to firms outside its borders because of lower costs relative to the west coast of the United States. According to the TechMap, an average software company can save as much as 33 per cent, a biotechnology research and development firm can save up to 30 per cent and a biopharmaceutical manufacturing firm as much as 20 per cent by moving here from the U.S. Individuals, said Calyniuk, were drawn by both lifestyle and the second-lowest individual tax rate for top earners among Canadian provinces – and a lower tax rate for those same executives than they would have in California. TOP 15 B.C. TECH COMPANIES BASED ON NUMBER OF EMPLOYEES: 1 Telus Corp TOP 16 B.C. TECH COMPANIES COMPANIES BASED ON REVENUE 1 Creo inc.
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