British Columbia Premier Christy Clark has unveiled the first part of her strategy to boost the province's high tech sector, announcing the creation Tuesday of the $100-million BC Tech Fund earmarked for investing in startup companies.
"B.C.'s technology sector is consistently growing faster than the overall economy making this the perfect time to catch the wave and help smaller companies join in the ranks of economy builders,"Ms. Clark said at a press conference held at the headquarters of Mobify, a startup located in the Yaletown area of downtown Vancouver.
The announcement of the fund, revealed by the Globe and Mail on Monday, is the first plank of the Clark government's innovation strategy, which comes following a multi-year push to expand more conventional, old-economy industries including natural gas and shipbuilding.
While the government has focused on building out a liquefied natural gas industry, the province's at-times overlooked tech industry has flourished in recent years and now employs more than 86,000 people, more than B.C.'s forestry, mining and oil and gas sectors, combined. The tech sector is growing at a faster pace than the overall economy and added $13.9-billion to its gross domestic product in 2013, with tech jobs paying 60 per cent more than the province's industrial average. The province is home to some of Canada's most successful startups, including Hootsuite Media, Builddirect.com Technologies and BroadbandTV. Several other local companies, including Recon Instruments and Plentyoffish.com, have also sold to major international firms in the past year.
The remainder of the government's innovation plan will be unveiled next month and will include actions to bring "the highest quality talent" to the province and "to make it easier to access new markets," the government said in a release.
Under B.C.'s new venture capital plan, the government will select a private sector fund manager to administer its pool of capital. Sources told the Globe the manager hired by government will act as a "fund-of-funds," which would direct the money to venture funds that invest directly in startup companies. Although the government's tech strategy is being led by the ministry of technology, innovation and citizen's services, the money will come from the international trade department budget.
This marks the province's return to venture financing. It last committed $90-million to the B.C. Renaissance Capital Fund in 2008. That fund was overseen by the government's investment capital branch rather than a third party.
In addition to the venture fund, the government said it will increase the number of B.C. technology companies that can claim tax credits available for firms engaging in digital animation, visual effects, or interactive digital media. The government also reiterated its support for $33-million in annual tax credits through its small business venture capital legislation.
While the startup sector welcomed the funding news, observers are keenly hoping the rest of the B.C. plan will address other chronic issues facing the tech sector, including a shortage of programmers and immigration challenges faced by surging tech companies that have held up their efforts to recruit skilled foreign senior executives into their companies.