TECH POWER

International tech firms, drawn to B.C.’s access to talent, are boosting growth in the province’s service sector B.C. TECH POWERS PROVINCIAL GROWTH

TYLER ORTON W hile most British Columbians rang in 2020 with sips of champagne or personal resolutions, one global financial giant had its eyes firmly set on the $510 million investment it was about to make in

Vancouver.

Mastercard Inc.’s January launch of a new cybersecurity centre in the city’s downtown core is set to create about 300 new positions in the province’s rapidly expanding technology sector. At the Exchange office tower on Howe Street, Mastercard’s new cybersecurity team finds itself in the company of another global giant making similar moves to tap B.C.’s service-oriented innovation industry: Amazon.com Inc.

“We’re going to continue to be attractive to major multinationals making foreign direct investments, and that’s a good thing – but only if we make the investments to ensure that we have a balanced tech ecosystem,” Jill Tipping, CEO of the BC Tech Association, said on the day Mastercard revealed its major expansion plans.

Big investments from massive multinationals are among the reasons B.C.’s economy is forecast to outperform all other provinces in 2020, spurred on significantly by tech’s growing influence on the service industry.

“It is the services-based industries that are poised to drive the province’s employment gains, particularly within the information technology (IT) sector,” states the Conference Board of Canada in its fall 2019 outlook.

The think tank projects the province’s economy will expand 3% in 2020 – above the 2.6% it is estimated to have grown in 2019, but below the 3.3% average annual growth rate enjoyed between 2014 and 2017.

“The province has already attracted investment from major tech players such as Apple [Inc.] and Amazon and will continue to see a rise in demand for IT-related occupations within professional services such as computer services and consulting,” the Conference Board writes.

“As well, the continued rise of financial technology and its related applications will lead to solid employment gains within the province’s strong financial sector over the next two years.” Jeff Booth, an entrepreneur and one of the city’s longest-serving leaders in the innovation sector, says demand for talent is

Mastercard Inc. announced in January at the World Economic Forum

in Davos, Switzerland, that it’s investing $510 million to open a new

cybersecurity centre. From left: Ajay Bhalla, president, cyber and

intelligence solutions, Mastercard; Ajay Banga, president and CEO,

Mastercard; Navdeep Bains, minister of innovation, science and

industry; and Ian McKay, CEO, Invest in Canada • SUBMITTED

driving much of the interest in Vancouver as a tech hub.

Metro Vancouver is home to major universities as well as a number of smaller institutions pumping out thousands of tech workers.

CBRE Group Inc.’s 2019 Scoring Canadian Tech Talent report determined the region was home to 74,700 tech workers – a

BuildDirect

Technologies Inc. co

founder Jeff Booth

says international

firms are drawn to

Vancouver’s access to

talent. But he cautions

the tech sector could

be at risk of becoming

a support ecosystem

for global tech giants

rather than a hub for

entrepreneurship •

CHUNG CHOW

42.6% surge in workers over the last five years alone.

In addition to Mastercard’s $510 million investment in a new cybersecurity centre, Amazon Web Services (AWS) kicked off 2020 by launching a Cloud Innovation Centre at the University of British Columbia to provide students with access to AWS tools in cloud technology.

But Booth, who was the founding CEO of e-commerce company BuildDirect Technologies Inc., cautions that there are knock-on effects that the province should be aware of.

“That race for talent pushes up the cost of business starting here,” says Booth, author of the newly released book The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future. He says this puts Vancouver at risk of drifting into the role of a support ecosystem for global tech giants instead of becoming a hub for entrepreneurship.

In a speech to the Greater Vancouver Board of Trade in early January, outgoing Bank of Canada governor Stephen Poloz touted higher-than-expected growth in business investment.

“This is crucial to the outlook for the economy because investment is both important for growth and vital for building the economy’s productive capacity,” he told the audience.

“And the whole concept of investment is evolving with the digitalization of the economy, making it much harder for Statistics Canada to measure.”

Poloz noted that despite trade conflicts between the U.S. and China that have targeted the goods sector, the services sector has remained fairly resilient throughout this uncertainty.

“Clearly, the Canadian economy is not immune to global developments,” he said.

“We are looking to see the extent to which weakness from manufacturing may be spreading to services, employment, consumer spending or housing. In this regard, the most recent data have been mixed, so we continue to monitor the situation closely.”

Meanwhile, it’s not only global tech giants that are planting a flag in Vancouver’s services sector.

Days before the Mastercard announcement, U.S. financial technology firm Tipalti Inc. revealed plans to open a 50-person office in Vancouver the following month.

“It [Vancouver] actually came out on top in terms of all the metrics we cared about,” CEO Chen Amit said, citing factors such as availability of talent and location within a three-hour flight of the company’s Silicon Valley headquarters.

Months earlier, American tech firm Grammarly Inc. and consumer electronics firm Tile Inc. also set up shop in the city.

Beyond Vancouver, the province’s capital has also proven enticing to smaller international players.

Last year saw the arrival in Victoria of British artificial intelligence firm Element Human Ltd., Seattle’s NetMotion Software and Brazilian software company Daitan Group. Dan Gunn, executive director of the Victoria Innovation, Advanced Technology and Entrepreneurship Council – better known as VIATEC – says Canada’s progressive immigration policies have been one of the driving forces behind the growth of the sector.

“Globally, the entire world is short of high-skilled talent, and so places that have a quality of life and quality of opportunity advantage are going to attract more of those people,” he says.É