Technology companies are delivering a ray of hope to an Alberta economy facing the combined impact of a global health crisis and shaky demand for oil. But the sector’s success could be precarious as the province competes with other jurisdictions for investment and jobs.
While CBC doesn’t say it out loud, the news story points to the need for the Jason Kenney government to diversify its mindset as well as the provincial economy by paying attention to industries whose purpose is something other than extracting oil, gas, or coal.
So far, Alberta tech firms “are finding ways to thrive in the middle of the economic desert caused by COVID-19,” CBC writes. “At a time when many other businesses are suffering, this sector has found a way to harness the pandemic to grow the industry,” with companies like Vog App Developers and Helcim Inc. expanding their staff teams by about 40% over the last year.
“It has been beneficial to us because a lot of companies recognize that they had either outdated systems or systems that didn’t support remote working or [were] looking to streamline processes that normally take place in an office,” said Vog CEO Vince O’Gorman.
Calgary Economic Development told CBC the sector’s “huge successes” during the pandemic have included a C$1.1-billion investment deal concluded by Benvity, a provider of charitable donation and grant management platforms. “It feels like it’s their day in the spotlight for sure,” said CED President Mary Moran. “We’re still at what I would call the dawn of our development in our tech ecosystem. But we really have ambitious goals to grow it to 10 times the size it is today.”
One company focused on Internet of Things technology for sanitation, Visionstate Corporation, has seen skyrocketing demand for its services. “I almost hate to say this,” but “because our technology is focused on cleaning, the pandemic has made it more relevant than ever,” said CEO John Putters.
The office of provincial Jobs, Economy and Innovation Minister Doug Schweitzer said Calgary and Edmonton both broke records for venture capital investment last year, but told CBC a specific breakdown was “difficult” to come by. [What do you mean, the province has no easily available breakdown by sector?—Ed.] It acknowledged that tech companies appeared to be doing better through the pandemic than other parts of the economy.
But the companies said the moment may not last, with U.S. competitors poised to poach talent or offer more direct support for new investment.
“There needs to be more tax incentive, more encouragement to employ people here, not lose the dream to other companies that are out of the U.S.,” O’Gorman told CBC. “The market is still pretty fragile for tech.”
“When they’re making IT grants or investments…make those investments directly into businesses,” advised Helcim founder Nicolas Beique. “There’s been a lot of push for different accelerators and incubators and things like that. But unfortunately, those middlemen don’t always translate into giving the cash needed to small tech companies.”
Putters pointed to better incentives coming from the U.S. “That sort of frightens me because we have a lot of very smart people, and you certainly hate to see them go leave the province looking for opportunities elsewhere,” he said. “It requires investment into education and the right programs.”