BCTIA and KPMG Issue 2014 BC Tech "Report Card" (Follow-up to 2012 Report)Thursday, November 6, 2014
Vancouver, BC, November 6, 2014--(T-Net)--The BC Technology Industry Association (BCTIA), in collaboration with KPMG announced this week that they have released the British Columbia Technology Report Card 2014, profiling the current health of BC's technology sector.
Two years ago, KPMG published the 2012 BC Technology Report Card, a then comprehensive account of the economic growth and vibrancy of the BC tech industry over the previous decade.
It identified gaps and opportunities that, if properly addressed, could further elevate the growth curve and contribute more substantially to the economic fortunes of British Columbia.
Recently, the BCTIA collaborated with KPMG to evaluate the progress of the BC technology industry in the two years since.
The result is the 2014 edition of the report card issued this week which again compares the performance of BC tech across two dimensions: a) relative to other industry sectors in the province and b) relative to tech sectors in other jurisdictions.
In the 2014 report, KPMG assigned an “A” grade for the tech industry's performance compared to other BC industry sectors and a “C+” in our competitiveness against other jurisdictions.
The “A” grade was consistent with the rating from the 2012 report card, demonstrating the sector's continued strength and significant contributions to the provincial economy.
The “C+” grade represents an improvement from 2012 and highlights the progress that the BC tech sector has made in recent years, according to the report.
KPMG found that BC's technology industry is ‘reaping the benefits of deliberate, long-term investments made by all levels of government and is performing strongly compared to other BC sectors.'.
The collected data also supports a number of key conclusions, according to an Executive Summary contained in the Report:
1. The BC technology industry is reaping the benefits of past investments.
An engine of growth in BC today, the BC technology sector is one of the strongest contributors to provincial GDP and creates jobs that pay 66 percent higher wages than the industrial average. BC's technology sector also has a significantly higher overall economic impact than the province's primary resource industries.
By incenting private investment in the sector, the introduction of programs such as the Small Business Venture Capital tax credit, the angel tax credit, Scientific Research & Experimental Development (SR&ED) tax incentive, the Interactive Digital Media tax credit and the BC Renaissance Capital Fund have all played significant roles in driving the successes we see today.
2. Provincial investment and sector focus are more important than ever.
While the aforementioned capital investment and tax credit programs have helped the growth of the technology sector to date, renewing and augmenting these programs would play a significant role in taking our tech sector to the next level.
The tech industry is working hard to improve, and with the BC government and technology minister currently refreshing the province's technology strategy, there is strong room for optimism in our tech future and in the opportunity for all parties to work together to address some key challenges.
3. Government support in the following three critical areas could have a significant impact on the continued growthof the technology industry and its companies:
• Revitalizing access to early stage venture capital.
A local supply of early stage venture capital is largely absent in the province. Early stage venture capital is an essential ingredient to the most successful tech companies. Without it, companies falter, stall or worse fail outright in capturing the market opportunity before them. The decline of local venture capital not only deprives companies of adequate risk capital, but also of the guidance and networking support that are essential to early stage growth. Moreover, an over-reliance on foreign venture capital increases the risk that successful companies will eventually relocate to other jurisdictions.
• Expanding talent availability.
There is a dearth of seasoned senior management, while upcoming talent is currently lacking in specific fields, such as engineering, sciences and marketing. The talent needed to fill senior roles is typically cultivated organically as firms grow in size to medium and large enterprises. With relatively few medium and large enterprises in BC, the available pool of senior management is noticeably constrained. At the staff level, companies are increasingly challenged to fill roles locally as a result of fewer students enrolling in key areas - including engineering, sciences and marketing - compared to other provinces in Canada.
• Growing the size of firms.
The BC technology industry faces the challenge of growing the average size of tech firms and growing the number of medium and large anchor companies in the province. Organic growth and start-up success are the lifeblood of a vibrant, sustainable tech sector, but currently the vast majority of BC tech companies employ fewer than 50 people. Given the degree to which medium and large firms benefit the economy through R&D, employment, community involvement and other spinoff effects, a commitment to a growth strategy to both grow existing ones and attract larger companies is essential.
While these are difficult issues, the report also noted that the BC tech industry is holding its own in many ways, contributing significantly to the BC economy, making strides to catch up with other provincial tech sectors and attracting an increasing number of global players.
The BC Technology Industry Association (BCTIA) also noted some additional following key findings from the report in its recent "The Voice" publication (abbreviated to avoid duplication or overlap of some of the above points).
As a follow up to KPMG's work, the BC Technology Industry Association reported that it will be convening discussions with its industry advisory councils as well as conferring with tech community members, business leaders, post-secondary institutions, investors and our government colleagues to review the findings of this 2014 report card and to refresh the recommendations of the association's policy framework, A 4-Point Plan for Growing the BC Tech Industry.
To read the 2014 BC Technology Report Card, or to download a copy, click here.
KPMG in Canada provides Audit, Tax and Advisory services. We work closely with our clients, helping them to mitigate risks and grasp opportunities. KPMG in Canada is committed to our clients. We have made considerable investments in regards to personnel, research, and hard-won experience. Through these investments, we strive to be the best in everything we do, turning our experience and industry knowledge into real value for our clients. This is the KPMG Way.
Officially incorporated in 1993, the BC Technology Industry Association (BCTIA) is a not-for-profit organization that supports the development, growth, and advancement of technology companies located in British Columbia.
We support tech companies at all stages of growth and development - from startups to rapidly-growing mid-sized companies, and large global players. The BCTIA works to improve British Columbia's competitiveness and visibility by advancing the development of BC's tech powerhouse - an industry of almost 9,000 companies that employ over 90,000 skilled professionals today.
Anthony Lindsay, Partner,
Greater Vancouver Area Market Leader
Technology, Media and Telecommunications
President & CEO
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