Something Ventured: April 20th Insight For BC Technology Entrepreneurs By Brent Holliday BC High-Tech Industry Report: 2007 April 17th, 2007 "I still down know what I was waiting for And my time was running wild A million dead-end streets Every time I thought I'd got it made It seems the taste was not so sweet" -David Bowie, Changes The Technology Industries Association of BC released their yearly report card on the state of the industry yesterday. I am going to summarize some of the important points and put the report in a new context: How far we have come in 10 years. When you look back, the TIA high-tech report of 1997 was a watershed event. The report was released at the right time, during a horrible downswing in the BC economy and it ignited a series of events that has resulted in the Silicon Slopes, as we were called by Fortune magazine in last year's 100 page feature on BC's technology hub. Some people that are new around here probably think that the significant event was back in 2002, when Microsoft Media moved here after the US DOJ split up the parent into 3 companies. Billg likes to take credit for everything these days. Actually, it all really got going at a dinner to announce the same high-tech report in April of 1998. I was at that dinner and, while it seemed like not a big deal at the time, the roasting of an NDP (remember them?) minister and the unified voice of the technology community galvanized the industry and big changes started. I know its hard to believe today, but 10 short years ago, this province had a mere 57,000 of 1.7 million workers in high-tech. The economy was in a slump because of, get this, a drop in wood and precious metal prices. Now, with 60% of the workforce in high-tech jobs and all of the world attention focused on this micro-economy (which is now bigger than the weak sister to the south, the Silicon Valley), BC is the center of research and commercialization of the world's important technologies. I was talking to John Bruce, EVP and Senior Partner at Ventures West just the other day about the rapid transformation that has taken place here. He said the groundwork done by the TIA reporting team was followed up by intense lobbying of the government to do what Oregon had done 10 years prior to that in 1988. Oregon moved away from a resource economy through careful planning and deliberate government incentives to attract large corporations. By 1998, Oregon had Intel, Micron and other large corporations of the day firmly ingrained in the economic fabric. I pointed out to John that the smartest thing that the BC technology community did was lead the charge to promote some of the emerging companies and to get the government to support their growth through incentives, both corporately and for individual workers. That is how we, here in BC, grew from within to launch Ballard, Creo, Pivotal, Prologic, QLT and Ward Labs into the massive billion dollar companies that they are today. And just look at all of the up and coming technology that has spun out of these companies and out of the universities. To me the most interesting thing that happened was the awakening of the government back in 1998 and 1999. Now that the NDP is a faint political memory, it is interesting to note that they actually got the ball rolling by belying their social leftist views and realizing that betting on knowledge based industry was better than the downward spiral they had helped create in the 90's. Of course, the present government, the IEEE, have risen to power through promoting the power of engineering and the fundamentals of science, while maintaining the right leaning view that commercialization of technology to make money, first and foremost, actually creates downstream economic benefit for all. When you really get down to the heart of the change, I believe it was when the entire BC tech community realized that they in fact did not compete with one another locally or in the global market. They started to arrange events and attend functions that helped each other. They saw great benefit in putting away their egos and sharing information to help create a common voice to the governments and to the world. The PR blitz of 1999 was the beginning, when BC invited the world to see its world class research in universities and colleges, its unbelievably brilliant, well connected and deep pocketed venture capitalists and its new tax system for knowledge based companies and individuals. The follow up recruiting blitz, getting all of the engineers to sign up for the new economy lifestyle that only Vancouver could provide, well, that was brilliant. The train started rolling back then I tell you, and it hasn't stopped. Oh sure, the world isn't perfect today. The merger with Oregon fell through and the stock market has slowed (the TSE dipped below 40,000 this week). But just imagine... think really hard about what this place might have been like if people had just gone on with their own insular lives and waited for someone else to knock some sense into the government and industry leaders in 1998. If the fire hadn't been lit and the fundamental way of running BC hadn't changed? Can you imagine? What a boring and depressing place this would have been. Cripes, I would have moved back to Toronto or something. Random Thoughts - I know this is a biased comment, but, why wasn't there a single venture capitalist on the panel that put together the 1997 report? We actually spend a great deal of our time contemplating the technology landscape and have a unique perspective. Could be that none of us put up our hand? Probably. Is this a backhanded way to get an invite, next time? Definitely. Nice knee jerk reaction by the forestry guys in the press on Friday: Wait a minute, you're not bigger than us! You bullies! Were much bigger. Those numbers are wrong. (Are they counting the striking guys and the laid off workers?) The point of the report is not that technology employs more people. It's that we are growing much faster in this economy and hey, just a minute, the rest of the world's high-tech is growing much, much faster. The skills initiative announced by Mr. Petter, to increase the number of seats at post-secondary institutions for high-tech training is admirable, save one small point. Who is going to teach these people? Industry has been complaining that the graduates lack real-world knowledge. While this is a generalization, it is pretty much true. Perhaps industry needs to focus more on training, both internally and at the universities. Mr. Petter, ask the tech companies to supply expertise to teach small subsections of engineering, marketing and computer science courses. And, for god sakes, get co-op programs working with industry. Why is Waterloo churning out Microsoft employees? They get real world training. Thanks for the responses to last week's Cecil Green story. Many of you were unaware of his connection to Vancouver and his legacy at TI. Read more about him and TI at http://www.ti.com/corp/docs/history/green.htm 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). Something Ventured Archive Online Venture Capital Guide