British Columbia: The Cornerstone of Canada’s Digital Economy

How often do you think of the province of British Columbia, Canada, as a destination of choice for the ICT industry? Especially when compared to Silicon Valley to …

How often do you think of the province of British Columbia, Canada, as a destination of choice for the ICT industry? Especially when compared to Silicon Valley to the south, the likely answer is: Not much. But all the indicators are pointing to BC’s emergence as a tech and design hotspot, albeit facing stiff competition from other North American locations, all vying to attract investment and big name companies.

Recently we spoke to Sergio Barraza, part of the team tasked with building up the BC profile. He tells us here about the industries and firms he’s promoting, why companies should set up in British Columbia, and what he sees on the horizon for this province. Read on for more.

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Originally from Barranquilla, Colombia, Barraza has previously worked as a consultant in several Latin American countries, helping to attract BPO investment from firms in the UK and the European Union. Having started his new role as Investment and Trade Specialist at Invest British Columbia just a few months ago, he now has two objectives: bring investment to BC, and help homegrown BC companies expand to Europe. In short, the mandate is to create new jobs for the province.

The ‘BC Brand’

In addition to stunning natural beauty and world-class skiing, British Columbia has a lot going for it. Here are some stats on the province: With a 2012 corporate income tax rate of 25%, BC has one of the lowest rates in North America.

In 2011, CNN chose Vancouver as one of the best new cities to do business in, for its strong film and digital media sectors, and its proximity to the US and Asia.

According to WorkBC, the province’s GDP is forecasted to rise by 25% by 2017, with much of that growth driven by the services sector. The BC labour force currently consists of 2.4 million people.

Digital media is one of the strongest sectors in Vancouver, with about 3000 graduates from BC’s universities and colleges entering this industry every year.

Specifically in the ICT sector, British Columbia’s main advantage is talent. “Vancouver is an extremely multicultural city, with large Chinese and South Asian communities in particular,” says Barraza. “There are lots of immigration facilities. So if firms want to bring in people, it’s much easier to do it through Vancouver than through Seattle just across the border.”

According to him, the kind of skilled talent in BC is hardly found anywhere else. “BC has a unique combination of creative and technical people, with expertise ranging from wireless/mobile technologies and internet technologies, to digital and creative media.”

Cost and Competition

This highly skilled labor in British Columbia does come at a price. “Wage levels are pretty similar to what you’ll find elsewhere in Canada, depending on the experience and skills you’re looking for. BC is not a low-cost option for basic BPO, but is an interesting location for ICT companies looking to combine talent, low taxation and economic stability,” says Barraza.

The main challenge for Vancouver is strong competition from other locations, mainly North American cities. They usually offer better incentives, but Barraza refuses to play that game. “We think a region should compete based on its long-term advantages,” he says. “We are working to showcase those better in all our key markets”.

The ICT industry in BC enjoys considerable support from both the private and public sector. Groups like the BC Technology Industry Association (BCTIA), BC Film + Media (BCFM), and the BC Innovation Council (BCIC) all provide a soft landing for companies that set up in the area. There is a very strong entrepreneurial base in Vancouver, boosted by the many local programs and accelerators that help start-up firms.

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In terms of provincial government support, the biggest draw is the tax advantages. “BC has one of the lowest corporate taxation ratios in North America,” says Barraza. Its 2012 corporate income tax rate was 25%. BC does offer incentives in terms of tax credits for digital media and game development firms, but these are not particularly competitive when compared to other provinces.

The West Coast Connection

With brands like Disney, Pixar and Sony Pictures Imageworks all having set up in British Columbia, it’s no wonder Vancouver is known as ‘Hollywood North’. “There’s a strong ecosystem of digital media, particularly in visual effects and animation, due to its symbiotic relationship with the film and TV industry. In fact about 15% of Hollywood animation is done here, because of strong post-production capabilities and award-winning visual effect houses,” says Barraza. The fact that Vancouver is in the same time zone as Silicon Valley and the entire West Coast is a huge bonus.

Nearshore Americas is always interested in discovering new start-up hotbeds, and Vancouver is definitely one of them. In his role in the trade and investment division of the BC government, Barraza works closely with the new businesses in the area, particularly in software design and application development. With three offices in China, three in India, and a few more in California, he has a pretty wide reach to connect them with new opportunities. His division provides market intelligence, and helps the start-ups find end users, carriers, developers, etc.

The important point, however, is the direction the BC start-ups are expanding. “Canada is quite a small market, and the US is pretty saturated according to some firms. So from an early stage, most of these companies have to look beyond North America in order to grow,” says Barraza. “They find Asia, Europe and Latin America very attractive. And when I say Latin America, I really mean Brazil.” He currently has about 10 to 15 companies trying to expand internationally.

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