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A bi-weekly column with timely, relevant and possibly irreverent insight into the BC technology industry.

Something Ventured:
May 6th, 2005

By Brent Holliday
Greenstone Venture Partners


Four More Years


"In this life you can lead
If you only believe
In order to achieve
What you need
You can never give up" - Shaggy, Hope

With all eyes on the mess that is our federal government right now and an economy that is chugging along, the BC election is almost a non-event. Four years ago I wrote a column just before that fateful election dissecting what the NDP had done for the technology industry in BC in its 10 year rule. Their efforts for our industry can be summed up in the following paragraph:

Now, to be sure, the technology sky was falling in spring 2001 and it was clear that with everything else going poorly in the economy a tight fiscal policy was the best course for the new Liberal government. Even with that bleak picture and very tough decisions that would make the government unpopular, Premier Campbell followed through on his promise to focus on the future of BC and create a Premier's Technology Council (there is no Premier's Forestry Council, by the way) that he personally would chair. He made tax code changes, employment act changes and generally listened to the PTC's recommendations for change. This is about 1000x more than the previous administration, which is odd because the technology industry is generally non-polluting, young and urban in its make up and very successful in BC in the 90's despite zero attention from the government. I guess the NDP ignores us because tech isn't unionized. Hmmmm. I don't want to rant on unions, but if you go see the movie version of Hitchhiker's Guide to the Galaxy by my favourite authour, Douglas Adams, you will see that the union mentality is well represented by the Vogons. Mediocrity is celebrated and red tape bogs everything down to a humorous crawl. Wait… the NDP acted exactly the same way in power. And Carole James… no, I'll get in trouble.

What about the performance of the BC Liberals then? Why should we vote for them as technology workers? Why not the Green Party (the only mention of technology in their platform comes here: http://www.greenparty.bc.ca/frames/frame404.html) ? You should also know that the Green Party seems to have the same prevailing thought as NDP that big corporations are essentially evil. But they at least acknowledge that contract, casual and part-time make up a big part of technology workers and the industry needs special treatment.

Let's look at what has happened during the BC Liberal's four years:

- Technology weighted NASDAQ - On May 17th 2001, the NASDAQ was at 2,086, down from 13 months prior when it was a ridiculous 5,000+. Today it's at 1,986. Hmmm, not much lift there… but it bottomed in 2002 at 1,280. This is the trend of the economy as a whole during the Liberals current mandate. It got really tough in the first year, then it recovered nicely and seems much stronger today.

- A few of the local successes in technology were public before the Liberals took power. PMC-Sierra was at $39.28 on May 17th, 2001, it is $7.52 today with no splits. Ballard Power was $88.50 on May 17th, 2001, it is $4.54 today, again with no splits. Angiotech was split-adjusted $18.50 on May 17th, 2001 and it is $17.90 today. MDA was $25.50 on the 17th of May 2001 and it is $28.00 today. Once again, with the exception of Ballard, these stocks went much lower in the late 2001, early 2002 period and have been steady or recovering since.

- BC's GDP at market prices grew a mediocre 0.9% in 2001 (essentially recession level) and then had 3.3%, 2.5% and 3.9% growth in the following three years. This is one indication that the economy is healthy and growing again and forecasts for 2005 are higher than 4% in some economist's minds.

- According to BC Stats, technology employment was 27,400 workers going into 2001 and was 31,800 workers going onto 2004 (the most recent count). The High Technology GDP in BC has come down from $3.7B at the end of 2000 to $3.5B at the end of 2003 (my guess is that 2004 was higher…).

- The most interesting indicator in the economy and one that can be most closely tied to BC Liberal policy is overall capital investment. The government has created many policies towards getting businesses to spend money in the province. In 2000, the last complete year of NDP rule, it was $21.8B in BC. In 2004, the number had grown to $29.1B, a 34% increase. Considering that there was an 8% increase over the five years of Glen Clark/Ujjal Dosanjh NDP, this is a roaring success and should payoff down the road.

- The 2010 Winter Olympic Games were awarded, as has the 2006 World Junior Hockey Championship, the 2005 Grey Cup, the 2006 World Men's Curling Championships, the 2007 FIFA Under 17 Soccer World Tournament and a host of other world class events.

- Tourism dove in the aftermath of 9/11 but has recovered very strongly in BC. The BC Liberals accomplished what the NDP could not do and got the Trade and Convention Centre expansion started to attract big conventions and trade shows, including some key technology events, boosting tourism dollars nicely.

The commodity prices of oil and lumber have spawned the greatest recovery for BC as our economy is still largely commodity based. The NDP is right in saying that the prime reason for the economy being charged up now is due to these factors and not particular government policies. But the party ruling over a booming economy almost never loses (Tony Blair just rode that to victory despite the Iraq question in the UK). So the best thing that the BC Liberals did was fix the election date and have it fortuitously land at this particular part of the economic cycle.

Gordon Campbell may look like some sort of reptile and his discretion when having eight glasses of wine for dinner is not an example for us or our kids, but he will be our leader through 2009 as we build out for the Olympics. Most importantly for we technology sector folks, he will continue to listen and act for us. And that alone is worth my vote.

What Do You Think? Talk Back To Brent Holliday


Something Ventured
is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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