alberta's ict opportunity
TRANSCRIPT
Capturing Alberta's Opportunity to Build a World-Class IT Industry
Rotary Club of EdmontonNovember 16, 2006
Tom Ogaranko
What you
imagine steers what you see, feel, think
and experience.
What if our new Premier Faced…
• 2006– no water permits issued south of Red Deer
• 2011 – major workforce retraining required due to changing capital
projects• 2020
– Alberta Forests devastated by Pine Beetle• 2025
– net importer of natural gas, conventional oil, falling royalties
NOT so fictional!
What if this was 1981 again?
Why do I care? Simply, their future.
“Ideas are the factors that lift civilization. They create
revolutions. There is more dynamite in an idea than in many
bombs.”
John H. Vincent
Overview
• Background on Information and Communications Technology– The impact– The opportunity – The imperative
• Outline an Action Agenda– For our families– For our businesses– For our public sector
What is the ICT Industry?
• Businesses involved in – computer software and
services,– telecommunications
equipment and services,– computer hardware, – communication cable and
wire, – recorded media, – internet service providers
(ISPs) and – additional ICT products.
What is ICT’s impact?
How big is the ICT Industry?
ICT Market (C$B)
1998 2005 2007 Est.
2013 Est.
Global $2,500 $2,800 3,200 4,800Canada 125 130 149 220Alberta 12.5 8.5 10 30AB as % of Global
0.5% 0.3% 0.3% 0.6%
• Though the global market is growing steadily at 7%, Alberta’s current strategy has targeted 15% growth.
US GDP
6 Sectors32%
All Others68%
ICT Industry is key to competitiveness
Advanced Technology Industries account for only 32% of US GDP.
Advanced Technology Industries account for 76% of US GDP Net Productivity Gains over the past 10 years; 85% globally.
Why? Strategic Use of ICT to create products/refine processes.
US Net Productivity Gain
6 Sectors76%
All Others24%
ICT is an Enabling Technology
ICT is an enabling technology and Canadian Businesses and individuals have embraced it
50
100
150
200
250
300
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
ICTs Non-ICTs
Indexed growth of business sector investment in ICTs and non-ICTs
1990 = 100 (current $)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Computer & other office eqpt Telecom. Eqpt Software
Breakdown of business sector investment in ICTs by type of asset
1990-2002 (millions of current $)
ICT is an Industry & an Enabler
Private Sector R&D Expenditures2003 Intentions ($ millions)
ICT Canada’s most innovative sector
• ICT sector R&D expenditures are expected to reach $5.2 billion in 2003; 43% of the total Canadian private sector R&D
• Six of the top ten R&D performers in Canada are ICT firms
Source: Industry Canada’s compilation and Statistics Canada Cat. 88-001
5,182
ICTSector
Aerospace Products & Parts
Scientific R&DArchitectural
and EngineeringServices
Pharma-ceutical
& Medicine
1,147 1,051 872
Alberta’s ICT Industry• 4th largest sector in terms of GDP contribution (7.5%), 5th largest employer• 4500 companies• Employees focused on two major activities
– 50% in computer consulting mostly global brands– 50% developing products and technologies
• Technology company profile– 6-10 people, most under 40 years old– Little business experience– Undercapitalized
Industry Sector Revenues (2005)
$ in Billions
Employees
All Manufacturing $59.3b 147,100Construction $42.1b 159,700
Mining, Oil and Gas $42.5b 122,600ICT Sector $10.0b 70,000
What are some of the Global opportunities?
• Thought based computing• Simulation• Artificial Intelligence• Robotics• Social Economy
What is Alberta’s ICT Opportunity?
• Wireless, Software – Focus: Data Services, Simulation and Business
Intelligence in• Heritage Industries (Energy, Forestry, Agriculture)• Healthcare and Life Sciences• Entertainment and Education • Defense and Security
• 2 (real) Examples:– Forestry: Sustainable Forest Management
Modeling– Healthcare: Ending Diabetes
Potential Alberta Impact Areas
Opportunities– Simulation and
modeling– Data
acquisition
Healthcare: Ending Diabetes
• Integrate leading health, nano and ICT research with– Wireless Nanosensors– Artificial Pancreas
– Transmit blood sugar level from sensor to artificial pancreas for automatic insulin dosage adjustments
Our Choice Today
“Buy” or “Build and Sell”?
ICT
24
Why Act Now?
7%
Our Heritage Industries are Threatened
• Oil and Gas– Forecasts – out of Natural Gas and Conventional Oil
by 2025• Forestry
– Pine Beetle threatening forests and migrating species• Agriculture
– No more water permits south of Red Deer– Salination of Southern Alberta– Water for Life Strategy
• Our water use by 2020 determines the sustainability of Saskatchewan and Manitoba
The Challenges
Access to Patient Capital
Access to Markets
• First Customer Access– 85% of Alberta ICT firms have more problems
selling locally than elsewhere• Export Market Access
– No natural distribution channel– Weak intelligence on target markets– Little support to access market– Underdeveloped international business skills
R&D Commercialization, Leverage
• Improve commercialization track record– 2005, C$19M net commercial returns on
C$5B in Canadian research funding– Poor linkages between industry and research
• Increase R&D2– 0.73:1 Ratio of Private:Public R&D in Alberta
• 3:1 in Finland and leading countries– Build capacity for demonstration projects– Increase innovation and adoption rates in
Alberta industry
Skilled, Experienced People
• Technologists– Canadian Software Human Resources Council projects
75,000 ICT jobs offshored by 2010– Alberta leads Canada in supply of educated S&T
graduates (7.5/1,000 persons employed v. 6.4 nationally) but we lack US (9/1,000) and Finland (15/1,000)
• Business Skills– International business – Finance– Technology product development and marketing
Supportive Tax, Fiscal Environment
• R&D Tax Credit– Alberta is the only province in Canada to not have one.– Canada’s SRED Credit skews start-up behaviour
• Investor Incentives– Parallel flow through share, stumpage fee, agricultural subsidy,
film tax credit– BC Angel funding experiment created 16000 jobs and 570
companies with a 90% survival rate after 5 years.
• Foster Collaboration in key public sector areas with ICT industry– Procurement practices
What Can you Do At Home?
• Promote ICT education with your kids, grandkids– As a career– As a life skill
• Mentor– Help a technology entrepreneur
• Invest– Ask your investment advisors how you can invest in
Alberta’s technology sector• Ask your MLA, MP
– what they are doing to support Alberta’s technology industries
What Can you do At Work?
• Strategic Sourcing – co-develop solutions with local firms
• Encourage commercialization of technologies
• Invest – In innovation– In training
What can we do as Rotarians?
• Equipment
• Training
• Mentorship
• International linkages
Your actions will make them smile!
Thank you!