Improving on a Digital Economy Strategy for Canada
Submitted by DigiBC — The Digital Media + Wireless Association of BC 2010–07–14 08:14:25 EDT
Theme(s): Building Digital Skills, Canada's Digital Content, Digital Infrastructure, Growing the ICT Industry, Innovation Using Digital Technologies
CONTENTS
Summary
DigiBC, The Digital Media + Wireless Association of BC, is a member–supported, non–profit organization, based in Vancouver, BC Canada.
Our mission is to promote, support and accelerate the growth, competitiveness and sustainability of BC's digital media and wireless industry in the world.
Our vision is to make BC the most recognized and admired centre of digital media and wireless excellence globally.
DigiBC is uniquely positioned to provide strategic insights and recommendations to facilitate and accelerate growth and possibilities. Together with our members, we offer a balance of in–depth local knowledge and extensive global market experience which can be applied in pursuit of ambitious, attainable opportunities for the betterment of all.
DigiBC represents the following industry sectors: Mobile & Wireless, Video Games, Animation and Visual Effects, Web 2.0 and Social Media, Interactive Marketing and e–Learning. According to the 2010 BC Digital Media and Wireless Industry Survey there are over 1,150 companies in our sector, creating innovative products in wireless and mobile, video gaming, animation and VFX, web 2.0 and social media, interactive marketing and e–Learning. Collectively, our sector employs more than 16,500 people and generates revenues of $3 billion a year making us one of the most significant contributors to British Columbia's economic well–being and a major digital media hub in Canada.
DigiBC and its members are pleased to see the Government of Canada being focused on building a stronger and more competitive digital economy in Canada.
As the largest digital media and wireless cluster in Western Canada and natural Gateway to Asia Pacific we feel it is our responsibility to participate in the national dialogue on this important topic and trust that the following recommendations around bandwidth, content creation, foreign investment, immigration, global dialogue, competition, skills and education and wireless health will help you devise and implement a strategy that will benefit all Canadians at home and abroad.
Expertise
British Columbia is a digital media and wireless hub today. We have one of the top video game clusters in the world, with the presence of major publishers, including EA, Nintendo, THQ, Vivendi Activision, Disney, Microsoft, Ubisoft, Pixar, Sony and Digital Domain. The EA studio in Vancouver, for example, is the largest of its kind in the world.
Over time BC entrepreneurs and content creators have launched successful technologies, services and applications such as Microsoft's e–mail program Outlook, Club Penguin, EA's highly successful franchises FIFA and Need For Speed, Microsoft's web management products (NCompass) or Flickr, the revolutionizing photo sharing and social media service. Also, the BC digital media sector has a strong symbiotic relationship with the multi–billion dollar North American film and TV industry.
This is the birth place of mobile data communications in Canada. Vancouver's roots in mobile data communications run deep, beginning with satellite data technologies developed by MacDonald Dettwiler and continuing with the GIS systems developed by MDI. Vancouver is also home to important companies in wireless telecom and technology, including such companies as TELUS, Sierra Wireless and Nokia Vancouver.
DigiBC's 2010 BC Digital Media + Wireless Industry Survey provides an important tool for understanding the size, depth and needs of our industry. Key findings show that a majority of our members are attracted to the region for its large talent pool, deep domain expertise, strong sense of digital media community, strong ties to the film industry, access to the U.S. market and lifestyle.
British Columbia is strategically positioned to the West Coast (North–South) and Asia Pacific (West–East). As a gateway to the Pacific Rim, neighbouring Seattle and a less than 2hrs flight from Silicon Valley, with tremendous cultural diversity including strong ties to emerging Asian markets, we are well positioned, geographically, demographically and culturally, to compete effectively in the increasingly global digital marketplace. In fact, there exists a creative industry and a rich digital ecosystem in BC, where leading global brands facilitate growth and help to foster and spawn small, independent local companies.
Entrepreneurship is a notable characteristic of the local culture with a thriving sector of leading edge, emerging, independent companies. In spite of large, prominent players mentioned here, on average DigiBC members number less than 10 employees. Most plan to increase employment by 15% in the year ahead. Access to capital and education opportunities for their workforce are among the most prevalent of our members' concerns.
We can be justifiably proud of regional accomplishments to date, including three Academy Awards nominations in the past year for Best Picture, Best Screenplay and Best Visual Effects on District 9, some of the best selling video games worldwide, and countless industry awards. On the wireless side, members such as TELUS, Bell and Sierra Wireless have launched some of the fastest and most reliable networks and modems in the world in the last two years alone, making access to mobile broadband a reality.
During the 2010 Olympic Games more than 70 of DigiBC members have been engaged in showcasing our digital media and mobile technologies at the 2010 BC Showcase and BC International Media Centre to business visitors and media from all over the world. More than 90,000 Canadians and foreign visitors have also touched, shared and had fun with new "made in Canada" digital technologies at the BC Canada Pavilion.
We now seek to focus attention, both ours and yours, on ambitious goals for improving Canada's digital advantage on a global level.
Recommendations
We have prepared this paper to stimulate a dialogue with the federal government which will help strengthen and enhance our mutually beneficial relationship, together ushering in an era of exciting possibilities to our sector, our region and our country.
We are optimistic that Canada can regain its competitive status in the digital age by leveraging its digital media expertise, creativity and solid innovation base. The pace of change in our industry is rapid and the winners tend to be those who recognize emerging opportunities and act quickly.
We want to connect with you now to illustrate our perspectives, and our views of ourselves and our place in the world. We have eight specific recommendations to achieve our industry goals, while setting new standards for excellence and creating job growth and wealth from new global opportunities.
1.0 Bandwidth
Recommendation
Increase bandwidth available to all Canadians. Canada has lost its leadership role in this area, but there is an opportunity to set policy and regain our envied position in the world in terms of the supply of bandwidth, and in turn, the supply of knowledge. In many cases, it is not the supply, but the cost of this service that hampers its use. Greater competition within the marketplace must be encouraged to bring costs down and improve accessibility.
Rationale
There are many who believe the move to mobile will be the biggest shift ever in the technology business, even bigger than the move to the internet. Increasingly consumers are demanding not only immediate access, but immediate access from their mobile devices. The two major impediments have traditionally been (i) bandwidth and latency, and (ii) mobile device. Both of those issues are being addressed in a dramatic way, with the growth of 3G networks and the upcoming shift to 4G, and the launch of smart phones and tablets. Until the iPhone's appearance in 2007 the physical mobile device itself was not conducive to a good interaction. Screen sizes were small, slow internet speeds (lousy user experience), small keyboards (only the 12 button phone interface before the full keyboards), difficult to use, and no meaningful applications (changed with the iPhone). Before iPhone, mobile phones were basically phones with maybe the beginnings of e–mail (or with good e–mail in Blackberry's case). But the iPhone really is a browser more than a phone. It will be critical for Canada to be a major player in the mobile space, not only for Canadians as consumers but for Canadian companies as suppliers and exporters of content to potential consumers worldwide. Success will come from having a competitive infrastructure to compete globally in the connected world of the future.
Benefit
There are many benefits to renewed efforts to provide affordable, high–speed, high volume bandwidth to the homes of average Canadians. In the future increasingly sophisticated communications and a wide variety of location–based, context–aware content applications will be made possible by ubiquitous access to high standards of bandwidth. For instance, Canadians will be able to access their medical information or vital signs right on their mobile device anytime, anywhere, making personalized medicine and a sustainable healthcare system a reality.
2.0 Content Creation
Recommendation
Increased investment and a strong focus on accelerated commercialization in areas such as video games, digital animation, data visualization, social media, mobile applications, and wireless–related fields particularly in terms of user interface and digital content creation.
Rationale
Canada has traditionally been a resource provider. Even in the technology space, we have traditionally succeeded as a low cost branch plant or research centre, with commercialization happening through foreign buyouts of successful technology or emerging technology companies. Canada has implemented a tremendous and competitive scientific research and experimental development program. What it has lacked is a similar focus on commercialization in the growth areas of content creation, user interface, and creative engagement. Until that part is adequately addressed, our most promising technologies and emerging companies will continue to be acquired by companies possessing the sophisticated skills to bring those technologies to market. In the digital media space, the need for strong creative talent, content and user interfaces, are the most critical elements to success, even more so than technology advantage.
Benefit
The market for digital goods is becoming increasingly global and digital sale of valuable software is growing. Physical products such as DVDs and CDs are declining and may completely disappear. There will be tremendous revenue opportunities for companies well positioned for global sales in user interface applications and digital products and services.
3.0 Foreign Investment
Recommendation
Encourage the flow of investment capital from US sources. The Canadian government has a presence in Silicon Valley but there is still too little access to funds in the US. There are countless examples of viable Canadian start–ups in their early stages that have made significant innovations with talented staff, but have little access to capital markets to fund major growth. Silicon Valley is flush with capital right now but knows little about the digital media companies in BC and Canada. As a result, many successful small Canadian companies have felt compelled, or in some cases explicitly required, to move their operations to the U.S. in order to access the capital required to grow.
Rationale
There is a lack of venture capital in Canada, driven mainly by a lack of top tier venture capitalists with successful track records and global connections. As a result, companies in Canada are valued at a significant discount from their American counterparts. There are distinct advantages for companies operating in Canada, from lower salaries, availability of proven creative and technical talent, competitive tax and business operating expenses, and significantly lower health care costs. Valuations in Silicon Valley and in China are currently very high, reflecting an excess of capital for the number of available companies. Canada should be more aggressive in attracting that capital to Canada. One of the most important things Canada could do is to encourage as many investors in the US to hold a Nexus card and to issue and encourage as many of our Canadian managers to hold an APEC card. Lowering the barriers to travel will encourage more of that capital to Canada.
Benefit
We believe the government in partnership with the industry can play a positive role in addressing this imbalance, improving the awareness and competitiveness of Canadian companies by ensuring they have the resources available to grow and prosper. There are many opportunities to encourage venture capital from U.S. technology hubs in Silicon Valley, New York and Boston to their Canadian equivalents in Vancouver, Toronto and Montreal.
4.0 Immigration
Recommendation
Changes in immigration policy are needed to facilitate immigration of specialized talent and senior management including tax incentives. BC and Canada lack sufficient senior talent necessary to help small entrepreneurial companies navigate growth to become large companies. Increased senior creative and management talent will help to strengthen the talent pool and ensure successful growth of Canadian digital media and wireless companies with unique innovative products and services. The attraction of experienced management and specialized talent is often hampered by taxation differences between Canada and the U.S. Perhaps, as in other tax related programs, we can consider ways to address this imbalance. Similarly, we also need to do more to support Canadians who work globally, both to minimize disruptions in travel and to allow greater access to digital content across borders.
Rationale
Canada has tremendous talent in creative and technical fields. In the digital media space, it does lack for more senior management and sales talent with global connections. Canada could also use more successful globally connected general partners from venture capital firms to help Canadian companies connect outside Canada. Bringing more of both to Canada would provide a tremendous boost to our emerging Canadian companies and allow them to stay and grow independently in Canada, rather be acquired in order to access the global markets.
Benefit
The more balanced and attractive the offer in comparison to other countries, the easier it will be to attract and retain senior talent and potentially entire companies to Canada.
5.0 Centre For Digital Dialogue
Recommendation
Promote Canada as a Digital hub between North America and Asia Pacific. The Asia Pacific Region is expected to continue as one of the fastest growing regions in the world. Increased trade with Asia will also help to reduce Canada's dependence primarily on the US. Canada is in a natural position to benefit from increasing global digital trade. Here in BC we have a tremendous opportunity to promote Vancouver as a Centre for Dialogue, both physically and digitally.
Rationale
There is a fundamental shift in the global economy. The North America — Europe dialogue is moving to a North America — Asia dialogue at digital speed. When it was North America — Europe, the key players were the United States, Germany, France and Great Britain. As a result, much of that dialogue happened in neutral countries such as Switzerland and Belgium. Canada, through Montreal, could have been the North American centre for that dialogue, but that opportunity was never seized. As the world shifts to a North America — Asia dialogue, the dominant economies will be the United States, China, India and Japan. Singapore has emerged as an Asia centre for that dialogue. Canada should make every effort to strategically position Vancouver as the North American centre for that dialogue as well. There are tremendous benefits, and influence, that will accrue to Canada by striving to make that happen.
Benefit
There is already an Asia Pacific Centre for Dialogue at UBC, and the Great Northern Way Campus among other globally–minded institutions. DigiBC seeks to work with the government to develop initiatives to solidify Canada's role as a meeting place of ideas, people and economic development.
6.0 Competition
Recommendation
Ensure that small and medium enterprises (SMEs) qualify for government procurement projects. One way to increase fairness and access to government procurement projects is by allowing for collaborative applications of groups of small companies or other similarly innovative measures to ensure the continued participation of SMEs.
Rationale
The single biggest driver to the growth of the technology industry in the United States has been military spending. Ultimately, that military spending can be regarded as government procurement on innovative new products and services, often providing the necessary proof points and initial orders so critical to the success of a young company. Canada needs to find a way to use its government procurement to even the playing field for Canadian companies.
Benefit
The Canadian government will be helping to transform small Canadian companies into stronger global competitors and create more highly–paid jobs at home and abroad. As a major source of innovation, support for SME's will encourage growth and in turn strengthen ties within Canada. This will also provide for more competition and better value plus dynamic and varied solutions by encouraging greater diversity of bids.
7.0 Digital Skills & Education
Recommendation
Make sure that education, training and co–op programs are properly funded. This is a great way to strengthen ties between academia and industry and also ensure that the Canadian talent pool is continually refreshed with new highly skilled talent. Industry finds this to be the best method to train and recruit new talent into the workplace. In addition, The Great Northern Way Campus affords an opportunity for further development of our industry and community. There is more that can be done to reach our potential, such as the inclusion of undergraduate programs, continuing education and programs devoted to the development of new technologies. We also recommend scholarships and other avenues to remove barriers and ensure greater access to education in digital media for qualified applicants. Also consider "Own the Podium" — like initiatives to support high performance achievers or globally–minded start–ups to encourage them to apply their skills here in Canada upon graduation.
Rationale
Canada is a multicultural society that has a tremendous asset in the diaspora of many emerging countries. Ultimately it is through those who have come to Canada for their education, who will provide Canada with the most influence and interest between Canada and their original birth nation. As well, success in the digital media field will come from having the most talented creative, technical, marketing and senior management. Therefore, future success in a digital Canada will come from a strong education system with high digital literacy values.
Benefit
A continued focus on education and co–op programs ensures a richer relationship between academia and industry. These ties will improve the retention of talent within Canada and continue to feed companies with the best and brightest.
8.0 Wireless Health
Recommendation
DigiBC supports proposals to digitize and mobilize the Canadian health care sector. As we all know, the cost of health care is rising rapidly and something must be done. Digitizing health care can help to reduce cost and improve health care services. This includes enabling practitioners through digital tools, automating processes to increase productivity and reducing error–related risks and allowing patients to manage their own healthcare. We recommend for governments at all levels to harmonize standards and care practices in healthcare IT systems in order to take advantage of new innovations.
Rationale
The current trends in health care spending are unsustainable in Canada. At the same time, there is a demand for increased health care due to our aging population. We need to find ways of engaging Canadians to take a more active role in managing their health and to provide them the tools to encourage them to do so. Ideas are emerging of ways to make our health care more effective and efficient, many of which come from new tools being released in the consumer online and social networking spaces. From personal health records access to information to allow consumers to do more on the health and prevention side, Canada should be exploring using new tools that allow Canadians to be more involved and engaged in their health, fitness and wellness.
Benefit
The benefits of such an ambitious endeavour are many, particularly in developing innovative strategies to effectively leverage the $182 billion Canadians spend each year on health care. The sooner we adopt wireless health, the quicker we will see more collaboration with university labs across the country, more innovation, more startups, creation of new types of jobs, positive effects in the healthcare system, and exports to new markets.
Conclusion
Digital technologies allow for convergence, collaboration and cross–pollination among DigiBC members, which have become a prime engine of innovation, investment and growth as part of the larger Canadian digital media industry.
We are encouraged and energized by the government's invitation, to all Canadians, to provide input on improving Canada's digital advantage. We look forward to further discussion and welcome an opportunity to meet in person. In our increasingly digital age it is sometimes easy to forget the value of literally standing together and looking toward a better future for our industry, our country and our world.
DigiBC Contributors
V. Paul Lee — DigiBC Chair and Managing Partner Vanedge Capital
Parminder Singh — DigiBC Vice Chair and President Intellectual Ventures Canada
Warren Franklin — DigiBC Vice Chair and CEO Rainmaker Entertainment
Howard Donaldson — DigiBC Director and VP Propaganda Games/Disney Interactive
Chris Langdon — DigiBC Director and VP Network Services TELUS
Darshan Kaler — DigiBC Director and Director Olympic Services, Bell Canada
Dr. Gerri Sinclair — DigiBC Director and CEO Great Northern Way Campus
Olivier Vincent — DigiBC Director and CEO Canpages
Jim Mutter — DigiBC Director and Managing Partner Benson Salloum Watts LLP
Michael Bidu — DigiBC President
For inquiries about this publication or the 2010 BC Digital Media + Wireless Industry Survey, please contact:
Michael Bidu
President DigiBC
900–1188 West Georgia Street
Vancouver, BC
Canada V6E 4A2
Telephone: +1–604–602–5237
Email: michael@digibc.org
DigiBC Website
