In recent years, Newfoundland and Labrador has solidified its reputation as a budding tech hub by producing one blockbuster exit and outclassing the rest of the country on unicorn companies per capita.
“There are great companies here that sell to other provincial governments, and they’re not selling here.”
Andrea King, TechNL
The 2020 Nasdaq purchase of local financial crime management company Verafin injected more energy into the province’s tech sector, in part because it minted dozens of local millionaires, multiple people told BetaKit. Meanwhile, emerging scale-ups like Spellbook and CoLab Software have attracted Silicon Valley backers like Khosla Ventures and Spider Capital, alongside a strong local presence on their cap tables.
Now, with a new leader at the helm of its main tech association, TechNL, Newfoundland and Labrador could be poised for policy changes that the organization believes could help drive more startup creation and scaleup growth. The provincial government, led by Premier Tony Wakeham, has signalled it’s ready to work together.
Serial entrepreneur Andrea King took over as CEO of the government-funded innovation nonprofit TechNL in August. In addition to its advocacy efforts, the organization (which has roughly 200 members) runs tech and business development skills training events, a graduate transition program, and a number of other events to help place local talent. King told BetaKit at her office in St. John’s which policy changes are top of mind for the sector.
She said the first priority is reducing red tape—including cutting down on duplicate paperwork when applying for funding or grants across multiple provincial and federal organizations—and speeding up the review process in general. The second item relates to a familiar issue for the Canadian ecosystem: procurement reform to enable more purchasing from local companies.
“There are great companies here that sell to other provincial governments, and they’re not selling here,” King said.
Wakeham, who took office a year ago, appeared open to these asks from the sector when King broached them in an on-stage conversation at the TechNL summit last week.
RELATED: Why CoLab is in the “sweet spot” of engineering software
“Our government was elected with a clear commitment to grow our economy, to create new opportunities, and to make Newfoundland and Labrador a better place to live, work, invest, and raise a family,” Wakeham said on stage, adding that it should be a place “where government works with the private sector to create the conditions for investment, innovation, and growth.”
Another ask is to make the province’s tax system more competitive. King suggested one “easy” win would be to increase the province’s investment tax credit rate from 20 percent (in the North Avalon region, where St. John’s is located) to match Nova Scotia’s 35-percent innovation tax credit.
“I’m open to anything that will improve business and create more opportunities in Newfoundland and Labrador,” Wakeham told BetaKit when asked about whether he would consider such tax changes. “Sometimes we can get hung up on how much revenue government takes in through taxation, but I believe that the more money [is] put back in people’s pockets, the government will eventually get it back.”
Wakeham also hinted at a provincial AI strategy, following the release of Canada’s national roadmap this past June. “It’s something we’re working through,” he said. “Part of all of this has to be working with the players in the industry to make it happen.”
On stage, King said getting people to move to Newfoundland and Labrador was one of the most important issues facing the industry. “We need to attract skilled, educated, and ambitious workers,” she said.
Wakeham agreed that the province needs to create more opportunities for work, but noted that there are “challenges” related to the federal government’s reduced immigration targets.
Taylor Young, chief strategy officer at CoLab, said in a recent interview with BetaKit that talent retention hasn’t been a big problem for the company: “I think the connections are so rich between people that people want to be here and they want to come back.”
Feature image courtesy TechNL. Image by Ritche Perez.