Opinion from Gavin Dew: Let's help BC's tech unicorns multiply
This article was originally published on the Daily Hive on July 23, 2021.
British Columbia’s tech sector has been blessed lately, with eight unicorns in as many months; privately-held startup companies valued at more than $1B.
This means we’re doing great things. Our quality of life is outstanding, our governance is stable, our tech talent is world class, our expedited visa policy is bringing in more talented people, and we are attracting leading venture capitalists and foreign direct investment from around the globe.
But where will those unicorns be in eight years - will they stay and multiply, or leave for greener pastures? For example Slack, now a $25B company, was born in Vancouver but is now based in San Francisco.
I’ve learned a lot about the challenges and complexities of helping the tech sector thrive while leading efforts to build an integrated agricultural technology hub in Abbotsford.
What looks like overnight success for BC’s tech sector has been a long time coming, building on huge efforts by individual companies, sector leaders, and multiple levels of government. That includes BC Tech, the Vancouver Economic Commission, BC’s Digital Technology Supercluster, and the rest of our ecosystem of tech communities who are producing world-class results.
Innovators and entrepreneurs at companies like Visier, Trulioo, Thinkific, AbCellera, Galvanize, Clio, and Geocomply have built disruptive business models and an amazing pool of talented tech workers.
BC has a strong cleantech cluster working to address climate change, with companies like Squamish’s Carbon Engineering grabbing attention and investment from around the world. Vancouver is emerging as a global leader in areas like artificial intelligence and virtual and augmented reality. It is also the birthplace of non-fungible tokens (NFTs), a blockchain technology that is changing the world of content ownership and as a result has already created a newly-minted unicorn in Dapper Labs and a new platform called Flow.
Lifestyle is a top reason tech talent chose to relocate here. The mountains, water, skiing, and mountain biking help attract and retain people who could be anywhere. But that alone is not sufficient.
We need smart, market-tested policies and investments to help lay the foundation for success, shaped by digitally-native policymakers and advisors. We need modern government leaders who understand the complexities and tensions of tech and entrepreneurship, not just old-fashioned politicians who want photo opps in offices with foosball tables. Fax me if you agree.
We need both homegrown tech champions and tentpole companies - global giants like Microsoft and Amazon. We need both the Davids and the Goliaths to stay and scale, rather than choose jurisdictions with a more established talent base, a more affordable cost of living, or a preferable tax regime for companies and people.
Success breeds success. Ian Crosby, CEO of Bench - a future unicorn that has raised more than $135M and created hundreds of jobs in BC - has rightly argued that the best founders are experienced tech employees - people who have been part of a big company or a big exit, and now want to build something new themselves. Given the right conditions, their talent and capital is naturally recycled back into strengthening the local ecosystem of innovation and investment.
That’s why it’s so important that we continue to build our local pools of both capital and talent.
Making sure we attract and retain enough productive capital to grow our tech sector has always been a challenge, although recent success has shown that our companies can raise money with the best.
We need to build on these successes, supercharge organizations like Trade and Invest BC, and continually dial in taxes and incentives that encourage investment at all stages, as part of a comprehensive review of our tax competitiveness.
Government should help set good conditions for investment and innovation at a broad level, not try to pick individual winners and losers or compete with the private sector to allocate capital. If taxpayer dollars are going to be invested, that should be done with genuinely arms-length governance, good investment principles, and a nimble approach - not slow-moving and with political strings attached.
We need to ask tough questions about the financial context for tech investment, not just fiddle around the margins. For example:
- Does it make sense for the same small business tax threshold to apply to an early stage tech startup running at a loss as an established and profitable operating business?
- Is it time for more aggressive tax policies to ignite growth in key sectors where we have potential to profit from a positive impact, like in cleantech?
- If BC’s economy is too heavily invested in residential real estate and seeing too little per capita GDP growth, what are the right policies and incentives to shift the balance of individual and institutional investment into more productive sectors, like tech?
To build our local talent pool, we must break the bottlenecks preventing young British Columbians from getting the training and opportunities they crave in areas like engineering and computer science. We can start by increasing apprenticeships and vocational programs in high schools to let students stream into tech earlier. We should also make more tech learning programs available in rural and remote communities, given their potential to stimulate and support micro-clusters of local employment and opportunity.
When it comes to post secondary programs that are key to the growth of our innovation economy, we need to increase the number of available seats by multiples, not percentages. Now, not 10 years from now.
Whether it’s over beers with friends or on the campaign trail (I’m running to lead the BC Liberals), I hear the same thing time and again from tech leaders and workers. They want to stay and grow here, but above all else affordability makes that nearly impossible, with expensive housing exacerbated by the average tech worker earning less than half as much as their peers in San Francisco.
There are no magic bullets when it comes to the complex balance of wages, affordability, and innovative economic growth. We don’t need blame games or utopian promises; we do need leaders who can directly understand and address those tensions rather than pretend they don’t exist.
We need to fix fundamentals like housing and childcare, so that tech people can afford to thrive here in the long run, not just survive for long enough to get an American work visa.
I know firsthand the brutal truth of entrepreneurship: it’s a lot easier to work long hours and take big risks when you don’t have dependents, especially if you’re a woman. We must address that tension and ensure it’s possible for tech people to build both companies and families.
As Bank of Canada Governor Tiff Macklem says, every sector is now a tech sector. We need to unlock and incentivize opportunities around connectivity, innovation, and sustainability across our traditional sectors, from construction to mining to manufacturing. For example, Vancouver’s own Portable Electric is disrupting diesel generators, from movie sets to off-grid EV charging. Our tech companies are thriving in agriculture - take Trendi, who have raised international seed capital to use artificial intelligence and robotics to help food producers reduce waste and improve food security.
Digitally Literate Leadership
A generation of digitally-native citizens, entrepreneurs, and business leaders expects and demands a government that understands we are well into the 21st century digital economy.
We simply can’t keep being the province that took seven years and two different governments to figure out how to regulate ride hailing. That approach left incumbents (taxis), innovators (Uber and Lyft) and consumers (you and me) in limbo so that political parties could avoid a difficult conversation and seek short-term electoral advantage instead. It sent a signal to the market that if you want to innovate, do it somewhere else. And it turned people whose jobs or retirement savings were at risk into political pawns. That’s not right.
We need leaders in government who can compassionately understand and address the tensions between opportunity and job dislocation. With the Business Council of BC finding that 42% of jobs have significant potential for automation in the next 20 years, we need to help people working in industries ripe for disruption to anticipate and navigate changes in the nature of their work.
And most importantly, we need government leaders who act quickly and decisively to put solutions in place before opportunities fly away to warmer climates down south.
The Path Forward
On balance, tech offers tremendous opportunities for our people. B.C.’s tech sector is among its fastest growing, with wage growth outstripping most other industries. But its size relative to population pales in comparison to other jurisdictions.
It’s time for the next generation tech sector in B.C. to be taken more seriously in all its complexity than it ever has been before, by a provincial government that understands both people and business and is focused on the future.
Doubling our tech sector’s revenues is well within reach if we keep growing our blessing of unicorns. To make that happen, we need a new generation of digitally native business and government leaders to step up.
Gavin Dew is a 37-year-old Vancouver entrepreneur and father of two. He is running to lead the BC Liberal Party.