Premier Christy Clark held her annual BC Liberal leader's dinner in downtown Vancouver a few weeks ago, which as usual brought in over $1 million for her party's coffers. Continuing to advance her storyline from the 2013 election, Ms. Clark extolled the virtues of developing BC's liquefied natural gas (LNG) reserves as the path to long-term prosperity for the province.
The irony of the Premier's message is that it had little to do with the current economic climate in the city in which it took place. It also demonstrated how the Premier's single-issue focus is hurting emerging industries that warrant attention, but are getting little from the government.
While the LNG "industry" has an LNG-Buy BC advocate that gets paid $150,000 per year by the BC government, there will not be one LNG project that is up and running by the 2017 election (in spite of a promise that the first would be opened in 2015). The industry employs a tiny workforce in Vancouver, due to proposed projects sitting in limbo, uncertain about environmental approval or economic viability.
Contrast this with Vancouver's tech sector, which has really experienced a breakthrough over the past three years, both in terms of flexing its economic strength and grabbing attention across the world. This recent boom is fuelled by an explosion of dynamic start-ups, the successful recruitment of companies like Microsoft and Amazon, and the ease of bringing skilled foreign workers to Canada as compared to the US.
According to a recently released labour market outlook from the Information and Communications Technology Council (the "ICTC"), there are currently 74,530 people working in information and communications technology in Vancouver, which is more than oil & gas, forestry and mining combined. The ICTC estimates that there will be 15,500 new tech openings in Vancouver by 2019.
Herein lies the biggest issue the sector faces as it continues to establish Vancouver as a hub in the mould of Silicon Valley.
The tech sector's average age of employees tends to be quite young. PayScale, a company based in Seattle, looked into 32 of the most successful tech companies, and found that only 6 of the 32 had a median age greater than 35 years old, while eight of the companies had a median age of 30 or younger. The latter group includes tech giants like Facebook (28) LinkedIn (29), Google (29) and Apple (31). In our company Canada Drives, 85 per cent of employees are under the age of 30.
The problem for this group comes with Vancouver's extremely high cost of living, and in particular, housing. The city's housing prices have jumped an astonishing 30 per cent in the past 12 months, and on average, consume more than 48 per cent of average monthly household incomes. As a result, young people are leaving the city. In 2013, Vancouver lost a net 1,571 people between the ages of 20 and 30, and these numbers are increasing dramatically every year with no ceiling for housing prices in sight.
The reality is that tech worker "millennials" as they are so often called, are extremely vulnerable to the market, with the lowest purchasing power and access to capital/savings of any demographic.
Now this isn't a unique situation for our sector, as evidenced by Vancouver conversations these days, which are consumed with real estate chatter everywhere you turn.
Economically, however, it is particularly relevant when considering the widespread demand for tech professionals in cities across the world. This means that not only are Vancouver tech companies competing against each other for human resources, but against aggressive international recruitment campaigns.
One of the main reasons I decided to relocate Canada Drives to Vancouver in 2014 was due to an abundance of talent. The city was drawing in amazing tech professionals from across Canada and the world, and we knew that this was the calibre of candidates necessary for our company to reach the next level.
And it worked. We touched down in YVR with six employees, and 18 months later, are on track to grow to 250 by the end of 2016. Navigating the company's next phase of expansion, however, is proving far more difficult than the first.
As a tech entrepreneur whose wagon is firmly hitched to the City of Vancouver, I'm growing tired of politicians that don't seem to fully understand the impact of this housing crisis.
For several years, BC's tech sector has grown at double the rate of the provincial economy, in spite of the fact that our province lags behind other jurisdictions when it comes to tech exports, jobs, GDP contribution and availability of investment. In other words, the sector is succeeding in spite of a lack of attention from policymakers.
The fact that Vancouver serves as the economic epicentre of the industry, however, means that the ongoing lack of affordability could cause a chain reaction that forever cripples tech's future potential across the province.
Policy makers would be wise to carefully consider this before offering further inaction, which will have far longer implications than the four-year election cycle.
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