Report: Okanagan tech industry contributed $1.3 billion to the local economy in 2015

The tech industry in the Okanagan is booming, according to a recent Economic Impact Report by a technology-driven accelerator, Accelerate Okanagan.

The Okanagan tech industry contributed a combined $1.3 billion to the local economy in 2015, including $1.02 billion in revenues generated by tech companies, according to the report. This rise of over $300 million in revenue represents an unprecedented 30 percent growth rate in two years. That’s higher than any other business sector in the region.

The Okanagan Valley is now home to 633 technology businesses with a combined workforce of 7,600 employees. The average business in the area employs eight people, a similar distribution to the rest of the B.C economy. The growth of the tech sector impacts change on the economy, culture, and future development of the region.

Tech sector draws diversity

Growth in the sector is creating thousands of jobs for skilled workers, who say they are migrating to the area to enjoy the benefits of the Okanagan lifestyle. Businesses list a low commute time, tax benefits, and easy access to beaches, vineyards, and ski hills as some of the benefits.

A lack of financing was the second most-cited problem facing Okanagan businesses.

Over the course of two years, the workforce has increased by an additional 1,049 people. This is equivalent to five companies the size of a business like QHR Technology, an Okanagan-based startup that recently sold for an estimated $170 million. That trend may continue, with 71 percent of companies indicating that they would be looking to hire in the next year.

The region is also starting to appeal to a younger demographic, who bring with them education, enthusiasm, and a passion for change. Over half the workforce (52 percent) is under the age of 35, an increase of 14 percent since 2013.

“It’s really gratifying to see this growth trend in our local technology sector,” said City of Kelowna mayor Colin Basran. “It has taken vision and hard work by Accelerate Okanagan, local technology companies, and local governments to establish an environment where talented young people want to live and excel in their work.”

Attracting diverse talent is just one piece of the puzzle. Another piece is providing the support to retain them. The report shows that the region is attracting companies that are innovating rapidly, with 42 percent of those who took the survey operating between one and five years.

metabridge

In a region often labeled as ‘cliquey,’ the Okanagan’s tech sector is working hard to turn perception around by creating a ‘give-first’ mindset. Examples of this are Kelowna’s engaged Slack channel, where members offer advice and create connections; Digital Okanagan, who are running a series of events for local businesses; and Biz-camp, who are creating a conference for small business owners. On a larger scale, organized retreats, like Metabridge, do their part to attract bright-eyed entrepreneurs and experienced venture capitalists.

The tech talent crunch comes to the Okanagan

According to the survey, although the region is attracting diversity, businesses still cite lack of talent as the number one constraint. Although there are many lifestyle advantages, businesses also suffer from issues with distance to clients, and a small client base. These problems go hand-in-hand with high travel costs and a high cost of living.

“Like the adage says: if you build it, they will come.” – MP Stephen Fuhr

To help foster more tech talent locally, Okanagan College and the University of British Columbia are providing new educational programs. Accelerate College is also developing an animation diploma program as well as a coding program in partnership with Lighthouse Labs.

“We’re happy to help the community reach its goals with our long-standing computer science programs, new programs such as the Bachelor of media studies, our emerging software engineering program — and other areas that come forward as we continue our discussions with members of the tech sector,” said Dr. Phil Barker, associate vice president of research and vice principal of research at the University of British Columbia.

Funding the tech sector

Local barriers to growth also include a lack of financing, the second most cited problem facing Okanagan businesses. In the past, this has resulted in entrepreneurs moving to Vancouver, Calgary, and Toronto to start their businesses.

To address the Okanagan’s funding gap, Atrium Ventures VVC Inc. recently announced a $5 million investment fund that aims to nurture early growth stage companies in BC’s tech sector. This commitment fills a critical gap that will support the region’s economic growth and will encourage local businesses to maintain their grass roots.

2017 will see the opening of the Kelowna-based Okanagan Centre for Innovation, which promises to foster collisions between business, talent, funding, mentorship, and education. Established local tech companies including FreshGrade and Strawhouse Labs will share the space with Accelerate Okanagan and the Okanagan College. The building is predicted to open at close to full capacity, which is almost unheard of in the community.

“Like the adage says: if you build it, they will come,” said Stephen Fuhr, MP for Kelowna Lake Country. “The whole one stop shop idea encourages creative collaboration. It’s something that I think will attract people to the OCI and Kelowna in general.”

Among the efforts to bring companies to the Okanagan is the installation of fiber optic cable in Kelowna, Penticton, and Vernon bringing high bandwidth data services to local homes and businesses.

“This kind of connectivity is really the missing link for allowing companies to compete on a global scale,” said Penticton mayor Andrew Jakubeit.

Photo courtesy UBC

Emma Bullen

Emma Bullen

Writer & editor, passionate about creating engaging, storyrich content.