vitp eis full report 20061201

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This report was prepared by UVic MBA students Marian de Monye andAmanda Wright

under the supervision of Dr. Anthony Goerzen

at the University of Victoria in 2006.

The authors gratefully acknowledge guidance and assistance received from:

The management staff at VITP; Dale Gann, Vice President – TechnologyParks and Greg Sikora, Sr. Manager, Real Estate

Lillian Hallin, BC StatisticsCam Gray, UVic Business

Michael Rankin, UVic Business

We would also like to thank the companies at the Vancouver IslandTechnology Park and their employees for participating in this study.



Table of Contents

Vision S ta tem ent .................................................................................................................. 4

Mission S ta tem ent ............................................................................................................... 4

Execu t i ve Sum m ary ............................................................................................................ 6

I n t r o d u c t i o n .......................................................................................................................... 15

The Role o f Techno log y Parks in Econom ic Deve lopm ent ......................... 15

Scope o f t he Ana lys is ....................................................................................................... 20 Methodo logy and Da ta .................................................................................................... 21

Resul t s : Tenant Sur vey .................................................................................................. 26

Resul t s : Educat ion and Or ig in o f V I TP Em ployees ........................................ 32

Resul t s : Em ployee Survey ............................................................................................ 33

Qua l ita t i ve Ana lys is .......................................................................................................... 36

Plann ing fo r t he Fu t u re .................................................................................................. 38

Sum m ary and Conc lus ions ........................................................................................... 42

APPENDIX I ..................................................................................................................................... 46

APPENDIX I I ................................................................................................................................... 47

APPENDIX II I ................................................................................................................................. 49

APPENDIX IV .................................................................................................................................. 52

APPENDIX V .................................................................................................................................... 53



Vision Statement

Mission Statement

To develop a "knowledge community" that supports a highlyproductive and satisfying work environment that fosters the

growth of its people, technology and commercial success.

In doing so, we will be able to create a better life for all BritishColumbians through sustainable knowledge and technology-based development that effectively balances human needs andhumanities with economic opportunities.

To create economic development by promoting academic,industry and government collaboration leading to theestablishment and maintenance of research and technology-based facilities in British Columbia.

By remaining committed to our role as an environmentalleader, we will continue to produce quality jobs andopportunities for our community and our province.



VITP Economic Impact Study

Executive Summary

Executive Summary

Create

sustainable

Economic

Development by

promoting

Academic,

Industry &

Government

Collaboration,

as well as

Community

Involvement,

leading to the

establishment

and maintenance

of

World-Class

Research and

Technology

Facilities in

British

Columbia

The University of Victoria’s Vancouver Island Technology Park(VITP), facilitates the growth of technology on VancouverIsland by providing physical infrastructure that links local,provincial, national, and international resources with emergingor growing tech companies. The park provides a facility toaccelerate technology from research labs to the marketplace,combining UVic’s capacity for innovation, IDC’s technologytransfer office, with VITP and its associated businesses’ abilityto commercialize new ideas and discoveries. The Universitypurchased the VITP from the provincial government in 2005.

Strategically placed in Victoria, British Columbia’s secondlargest and high-tech sector, the park is a major centre fortechnology activity, and is easily accessible from Vancouver,Seattle, Portland, San Francisco and other Pacific Rim locations.It is a LEEDTM Gold facility (Leadership in Energy andEnvironmental Design) that concentrates synergisticorganizations such as the UVic’s Innovation and DevelopmentCorporation (IDC), a tech-transfer office; Co-op office; VIATeC;National Research Council Canada – Industrial ResearchAssistant Program (NRC/IRAP), which supports high-techbusiness development; and a business centre that can be used

by high-tech company personnel for meetings and networking.

VITP’s 35 acres house a modern research and technologycentre that enhances the creativity and productivity of itspublic and private tenants by clustering fuel cell, new media,wireless, life science/biotech, ocean technology and informationand communications technologies (ICT) companies andproviding amenities such as a fitness studio. At present, VITPhas a 97 per cent occupancy rate; it has embarked on a masterplanning exercise to accommodate further growth, seeking toexpand by an additional 250,000 square feet.




Executive Summary

The mandate of the Park is to act as a regional hub, providing services, physicalinfrastructure and a province-wide network to accelerate the profitable andsustainable commercialization of technology.1 UVic also sees VITP as an integralpart of the continuum of technology transfer in the region, with UVic as the

research engine, the University’s Innovation and Development Corporation (IDC) asthe bridge and incubator, and VITP as the receptor facility, promoting partnershipswith allied agencies such as VIATeC, BC Technology Industry Association, BCBiotech, NRC/IRAP and Western Economic Diversification (WED).

Many stakeholders in government and communities are interested in how VITP andits tenants contribute to the local economy as a whole. An Economic Impact Study(EIS) provides a scientific estimate of the economic impact of a project,organization or development on a specific geographical area, including dollarimpact, jobs created, and tax revenue generated at the municipal, provincial andfederal level. The EIS we performed was undertaken to give a greaterunderstanding of the many ways in which VITP contributes to the economy of Greater Victoria and the province of British Columbia.

VITP had 28 tenants for the full fiscal year (FY) in 2005. Data for this study wascollected using a comprehensive survey filled out by all but three of the applicablecompanies at VITP. Employee numbers and sales revenue for each individualcompany were gathered, as were overall construction costs for 2005 for thetechnology park. This data was then used to estimate indirect and inducedemployment, sales revenue, tax revenue, business visitor impact, and constructionimpact using the British Columbia Input-Output Model produced by BC Statistics.The sales revenue and business visitor impact figures were then added asappropriate to provide an overall picture of the impact of VITP on the economy of

British Columbia. Our final figures represent a conservative estimate of the totalimpact because of the methodology we used and some assumptions that we made.A description of the conservative nature of our study may be found in theMethodology section of this report.

The findings of this report demonstrate that the tenantsat the Vancouver I sland Technology Park had a total

dollar impact of $279.9 million on the economy of British

Columbia. A total of 2,023 full time jobs in BritishColumbia could be attributed to VITP and its companies.

1 Dr. S. Martin Taylor, VP Research, University of Victoria; speech at Association of University Research Parks conference, May 4th, 2006.




Executive Summary

Employment Impact

In the 2005 FY, 995 people were directly employed by the companies located atVITP (Exhibit 1). Additional jobs were created in British Columbia as thesecompanies purchased supplies and services from other local companies, and as thetenants’ employees spent their wages on groceries, clothing, furniture, and othergoods. These “multiplier effects” are known as indirect impact and induced impactrespectively. VITP generated an additional 659 indirect jobs and 363 induced jobsin the province. As part of this impact, construction completed at the technologypark in 2005 generated 102 direct, indirect, and induced jobs. An additional six jobs were created in the economy as a result of business visitors to VITP spendingmoney in Victoria on accommodation, food and beverages, and transportation.Therefore, the total employment impact that companies at VITP had in BritishColumbia was 2,023 jobs.

Exhibit 1.

Employment Impact FY 2005

995

659

3636

Direct Jobs Indirect Jobs Induced Jobs Business Visitor Jobs




Executive Summary

Total Dollar Impact

The economic impact of VITP’s tenants in British Columbia based on 2005 FY datawas $279.9 million. This figure was calculated from sales revenue, and therefore

implicitly includes municipal and provincial tax revenue, as well as constructionimpact, as these amounts are all generated from the sales revenues of thebusinesses at VITP. We excluded federal tax revenues generated by VITP from thetotal impact because this EIS is only concerned with VITP’s impact on the provinceof British Columbia. Business visitors are funded by sources external to VITP, soassociated revenues were added on to VITP’s sales revenue impact to give the totaldollar impact.

Total Sales Revenue Impact

Our results indicate that the tenants at VITP produced $160.2 million in direct sales

revenue in FY 2005 (Exhibit 2). Due to a multiplier effect, an additional $86.5million in indirect sales and $32.8 million in induced sales were generated in theeconomy. These figures are net of federal tax revenue, but do include provincialand municipal tax revenues. The figures also include construction sales revenueresulting from capital projects completed in 2005. Consequently, the tenants of VITP contributed a total of $279.5 million in sales revenue to the BC economy.Clearly, the companies at VITP are generating significant sales and creating wealthin the province.

Exhibit 2.

Total VITP sales revenue impactFY 2005

$160,187,914$86,539,276

$32,815,692

Direct Sales Revenue Indirect Sales Revenue Induced Sales Revenue




Executive Summary

Tax Revenue Impact

In FY 2005, activities at VITP contributed a total of $42.1 million in tax revenues to

the Canadian economy (Exhibit 3). We calculated that $18.8 million in federaltaxes, $19.1 million in provincial taxes, and $4.2 million in municipal taxes weregenerated. These tax dollars are then allocated by government in support of socialservices, education, infrastructure, and community development. Clearly, VITPtenants provide the various levels of government with a considerable amount of taxrevenue - money which is then spent to improve the lives of people living in Victoriaand the rest of the country.

It is important to note that the focus of this economic impact study is the effect of VITP on the British Columbia economy. Therefore, the amount of federal taxrevenue generated has been excluded from the final figure calculated for the total

dollar impact of VITP’s tenants on the provincial economy.

Exhibit 3.

Total Tax Revenue Impact FY 2005

$18,807,351

$19,111,507

$4,182,038

Federal Tax Impact Provincial Tax Impact Municipal Tax Impact




Executive Summary

Construction Impact

Part of the overall economic impact of VITP in 2005 was construction spending byVITP itself and some companies within VITP. This construction impact is included in

the sales revenue impact calculated earlier, but we have broken out the figures forillustrative purposes. In 2005, $7.2 million in direct sales revenue was generated byconstruction activity as existing facilities were renovated or upgraded to betterserve the needs of tenants. Due to a multiplier effect, an additional $3.6 million inindirect sales revenue and $1.2 million in induced sales revenue was generated.Therefore, the total construction impact was $12.1 million (Exhibit 4).

As part of this economic impact, construction projects at VITP directly employed 61workers, and created 29 indirect jobs and 12 induced jobs due to spin-off effects inthe economy. Overall, construction at VITP generated a total of 102 jobs in BritishColumbia. Again, these jobs have been included in the total jobs calculated in a

previous section. We have shown that construction at VITP not only injected moneyinto the local economy but also created a significant number of jobs in the province.

Exhibit 4.

Construction Sales Impact FY 2005

$7,233,516

$3,616,758

$1,229,698

Direct Impact Indirect Impact Induced Impact




Executive Summary

Business Visitor Impact

We collected information from each tenant about the number of visitors to VITP inFY 2005 and the average length of stay in order to estimate the economic impact of

these visitors on the province. Visitors included out-of-town consultants (notemployed by VITP companies), individuals attending conferences, investors, andresearchers from other universities or businesses. These visitors would typically befunded by sources external to VITP, and therefore revenues generated by thesevisitors have been added to VITP sales revenues to give the total dollar impact.

There were a total of 1,991 days spent in Victoria by business visitors, who onaverage spent $156.85 per day. As a result, $312,288 was spent onaccommodation, food and beverages, local transportation, recreation, and retail byVITP visitors in 2005. This direct spending also generated indirect and inducedeffects in the economy with respect to sales revenue and jobs. Therefore, business

visitors to VITP generated a total of $395,632 in sales and six jobs in BritishColumbia. Our results demonstrate that there is a great deal of interest in VITP’soperations from outside Victoria and outside the province, and a significant numberof visitors traveled here for a variety of purposes, contributing a considerableamount to the local tourism industry.

The companies

located at VITPhad asignificantimpact on theeconomy ofBritishColumbia in2005.

Summary of VITP tenants’ Impact on the Economy

Our EIS has found that the tenants at the Vancouver IslandTechnology Park contributed over $279.9 million to theeconomy of British Columbia. $279.5 million of this amountwas VITP sales revenue, which included $23.3 million in taxrevenue, and $12.1 million in construction impact. Theadditional $395,632 can be attributed to business visitorimpact. VITP had a total employment impact of 2023 jobs –2,017 from VITP tenants (which includes 102 fromconstruction), and six additional jobs created by businessvisitors (Exhibit 5).




Summary and Conclusions

Exhibit 5: Summary of VITP ’s impact on the BC Economy, FY 2005

Total Economic Impact

Dollar Impact $279.9 mil lion

Includes:$4.2 million in municipal tax, $19.1 million in provincial tax,

$12.1 million in construction impact

EmploymentImpact

2023 jobs

In addition to contributing to the province financially, VITP also offers qualitativebenefits to local residents and the community. Our research has determined thatVITP tenants play a significant and important role in the B.C economy. In additionto fostering collaboration and promoting the transfer of knowledge between

universities and industry, the technology park also creates wealth and generates jobs in the province. VITP’s tenants provide quality employment opportunities forgraduates of the University of Victoria, Royal Roads University, and CamosunCollege, and it also attracts talented workers from other areas of Canada and othercountries.

Our research has determined that the companies at VITP play significant andimportant role in the BC economy. In addition to fostering collaboration andpromoting the transfer of knowledge between universities and industry, thetechnology park also creates wealth and generates jobs in the province.




Introduction

Introduction

VITP Supports a

Highly

Productive

and

Satisfying

Work Environment

that Fosters

the

Growth of

the Park’s

People,

Technology,

and

Commercial

Success

The Role of Technology Parks in Economic Development

The Role of Technology Parks in EconomicDevelopment

The Association of University Research Parks definesuniversity research/technology parks as developments thathave formal or contractual ties with a university, thusfostering a public/private research relationship that isbeneficial to both sectors2. These parks are established forthe purpose of fostering innovation through improved

university-industry relations and more efficient transfer of new technology from academia to the private sector.Technology parks also aid regional economic developmentby attracting technologically advanced companies thatprovide attractive wages and job opportunities for universitygraduates (Pavlakovich-Kochi & Charney, 2002).

Technology parks offer high quality facilities, competitiverents, the opportunity to collaborate with universityfaculties, and a supply of well-trained students andgraduates to work for the businesses. Empirical evidence inthe form of economic impact studies continues to support

our understanding of the growing roles that universities andtechnology parks play in the economic vitality of theircommunities and surrounding regions (Pavlakovich-Kochi & Charney, 2005).

2 www.aurp.net




Introduction

Typical economic impact studies focus on measurable contributions of technologyparks to the local economy in terms of jobs, tax revenues, and sales, which aregenerated through purchases of goods and services in association with the parks’ operations, and through employee spending. However, these studies capture only a

portion of the overall role of university technology parks in the community. It isimportant to consider other intangible effects for example; technology parksprovide job opportunities for local university graduates, who might otherwise leavethe region in search of suitable employment. Parks also offer incubator space forstart-up companies and encourage the transfer of technology from universities tothe private sector. Additionally, technology parks serve as a compelling attractionfor prospective high-tech companies relocating to the area.

The Vancouver I sland Technology Park

The Vancouver Island Technology Park (VITP) was purchased by the University of

Victoria (UVic) in April 2005, fostering a close relationship between academicresearch and commercial technology-based ventures. The park connects UVic’scapacity for innovation with VITP and its associated businesses’ ability tocommercialize new ideas and discoveries.

VITP is located in Victoria, the capital of British Columbia. Strategically locatedwithin the Pacific Rim, the park is a major centre for technology activity, and iseasily accessible from Vancouver, Seattle, Portland, San Francisco and other PacificRim locations. The technology park can draw on a highly-educated, technologicallycapable population for employment opportunities, coming from three local postsecondary institutions: University of Victoria, Camosun College, and Royal RoadsUniversity.

With over 191,000 square feet of rentable area, VITP has the ability to develop anadditional 250,000 square feet, and provides an ideal environment for growingtechnology companies. The space is flexible, efficient, and versatile making itsuitable for laboratory, high-tech manufacturing or information technologypurposes.

VITP housed 28 tenants during FY 2005. These companies were concentrated inhigh technology sectors such as software development, biotechnology,pharmaceuticals and information technology. The companies represent acombination of research, private, and public organizations. VITP tenants employ

approximately 1,000 people, many of whom are graduates of local universities andcolleges.




Introduction

VITP Tenants

COMPANY NAME ACTIVITY

Advanced Economic Research

Systems Inc.

On-line web interface services, database

management for organizations using eBayAir Ambulance Regional BC Air Ambulance dispatchAspreva Pharmaceutical Pharmaceutical development and salesBC Ambulance 911 DispatchCantest Ltd. Environmental testingCisco/Doug Pelton Inc. Internet networking solutionsCompugen Information technology solutionsCorps Commissionaires Building security and access managementEDS Advanced Solutions Inc. Business process, IT outsourcing servicesE-traffic Solutions Ltd. Educational software, solutions and

technology for industry, government and

non-profit organizationsGeffen Gourmet Catering Catering, operation of on-site Hard DriveCafé

Genologics Life Sciences Software Life sciences softwareHRGI SolutionsImmunoprecise Antibodies High quality custom monoclonal antibodiesInteratomicsJasco Research Ltd. Oceanographic instrumentation, scientific

data analysis, environmental acousticsMAD Ventures Inc. Start-up investment model developmentMDS Metro Laboratory Services Diagnostic testing, community laboratory

network

Ministry of Agriculture and LandReprographics Lab

Integrated Crown land and resourcemanagement/ information services

Municipal Software Corporation Software and integrated systems formunicipalities

National Education Consulting Inc. Business strategy training servicesNational Research Council Technical and business oriented advisorOmega Biotech Corporation Develop and extract phyto-nutrients from

botanicalsUVic Genome BC Proteomics Centre Protein analytical services, custom peptide

synthesisVIATeC Vancouver Island Advanced Technology

CentreVigil Health Solutions Innovative nurse call and dementia

monitoring technologyVancouver Island Technology Park Administration

WSI Property management of VITP facility




Introduction

VITP offers reasonably priced office-operating costs compared to other cities inCanada and the United States, with lower rental rates than those found indowntown Victoria. VITP’s healthy “Quality of Life” approach to workspace includessuch amenities as an on-site Hard Drive Café and Lounge, Fitness Facilities,

Wellness Centre, Outdoor basketball courts, walking and cycling trails that connectwith regional trail systems, and direct access to public transit.

Economic Impact Studies

Many stakeholders in developments and projects often are interested in how theproject contributes to the local economy as a whole. Stakeholders such asgovernment are concerned with the amount of taxes generated by an entity such asVITP, and local residents are interested in the number of jobs created directly byVITP and the number of spin-off jobs created by those who work at VITP through

spending their disposable income in the local community.

An Economic Impact Study (EIS) provides a scientific estimate of the economicimpact of a project, organization or development on a specific geographical area,including dollar impact, jobs created, and tax revenue generated at the municipal,provincial and federal level. A detailed explanation of Economic Impact Studies isprovided in Appendix I.

The EIS we performed was undertaken to give a greater understanding of the manyways in which VITP and its tenants contribute to the economy of Greater Victoriaand the province of British Columbia. VITP is a UVic property that has created

many sustainable, clean and high-quality jobs; it also contributes hundreds of millions of dollars to the provincial economy, and it has generated in excess of $42million in tax revenue for Canada. Although government funding was required tolaunch the VITP project, this EIS gives a clear numerical picture of how VITP hasbuilt on that initial investment to become a sustainable and valuable asset to theprovince of BC.




Scope of the Analysis

Scope of the Analysis

The time frame of this study is FY 2005, and the geographical focus of this study is

the province of British Columbia, with some qualitative benefits for the GreaterVictoria area discussed in the Qualitative Analysis section. This EIS measured thefollowing information:

Direct jobs and direct sales revenue from VITP companies Indirect and induced jobs Indirect and induced sales revenue Direct, indirect and induced municipal, provincial, and federal tax revenues One time direct, indirect, and induced sales revenue and jobs resulting from

construction that took place in 2005 Direct, indirect, and induced impact of out-of-town business visitors to VITP

A detailed explanation of these different measurements may be found in AppendixII of this report. The spin-off economic impact results from the businesses at VITPpurchasing goods and services from local supplier businesses (indirect impact) andfrom employees at both VITP and VITP-supported local businesses spending theirwages in the community on food, housing, entertainment, and other expenditures(induced impact). Construction spending also generates similar spin-off effects inthe local economy.

This study also examines some key data obtained from VITP employees themselvesthrough an employee survey, such as home purchases, job satisfaction, and wagecomparisons between employees’ current jobs at VITP and their former jobs. Theemployee survey data provides some compelling conclusions about the quality of jobs provided by VITP and the high level of job satisfaction enjoyed by VITPemployees.




Methodology

Methodology and Data

Our data was obtained from the companies located at VITP.We used a detailed survey to collect information about thenumber of jobs provided at each firm, payroll, salesrevenue, and the number of out-of-town visitors for eachcompany in VITP. We also asked about the education levelsof VITP workers, and about the number of employees ateach company who had lived outside of British Columbia oroutside of Canada prior to working at VITP. A copy of ourtenant survey may be found in Appendix III.

Of the 28 companies located at VITP in 2005, 25 respondedto our survey and provided complete information. Threecompanies chose not to participate in the study and did notprovide responses to our survey. The companies that didnot respond were all quite small and represent only aminimal proportion of the overall number, and excludingthem should not have had a large effect on our final results.Our findings represent a conservative estimate of the trueimpact of VITP on the economy of the province because ourfigures do not include employment and sales revenue datafor these three companies.

The survey provides direct data for use with industry

specific multipliers generated by the 1999 British ColumbiaInput-Output (I-O) Model. The model’s multipliers then givethe indirect and induced impact for each of the threecategories examined: employment, sales, and taxes. TheI-O Model has been produced by BC Statistics (BC Stats)using data from Statistics Canada (StatCan). StatCanexamines the usage of 727 commodities and provides dataabout the inputs and outputs of over 300 industries withinthe country and province. This data is then utilized by BCStats for their I-O Model, which determines the overalleconomic impact per $1 of increased sales of a company,including new companies. The I-O Model breaks theprovincial economy into 66 sectors (medium aggregation),and provides sector-specific multipliers based on provincialspending trends for each sector.




Methodology

The direct data from VITP was analyzed using multipliers for the “Professional,Scientific and Technical Services” sector, as all companies at VITP fit in thatindustry classification. The total sales for all companies at VITP for fiscal year 2005was used, as this figure includes what each company spent to make their product,

plus their profit margin. The total sales figure was multiplied by the appropriatemultipliers provided in the I-O Model to give the indirect and induced sales.

To calculate the number of direct, indirect and induced jobs created by activity atVITP, the direct sales figure was multiplied by the corresponding “Professional,Scientific and Technical Services” multipliers and divided by one million, as the dataare expressed as person years generated per $1,000,000 in revenue. Person yearsare roughly equivalent to full time equivalent (FTE) positions. The number of direct jobs calculated by the multipliers was substantially higher than the number of employees actually directly employed at VITP, as given in our survey results. Wewere advised by BC Stats to use the employment numbers collected in our surveyas the direct employment impact, instead of the data generated by the multiplier.The number calculated using the multiplier was high because the ratio of totalrevenue per employee is much higher at VITP than average within the professional,scientific and technical services industry.

To calculate taxes, direct sales from VITP companies were used with the I-O Modelgovernment revenue multipliers. This provides an estimate of the amount of taxesgenerated by the economic activity at VITP at the Municipal, Provincial, and Federallevel.

The economic impact of out-of-town visitors to VITP was calculated according to BCStats recommendations, which includes dividing up the amount spent by these

visitors according to the “Distribution of Total Expenditures by BC ResidentTourists” table3, subtracting out the front end taxes, and using the appropriatemultipliers for each industry to calculate industry-specific impact. Averagespending per visitor per day was obtained from Tourism Victoria Exit Survey data.

The construction impact was calculated using the direct amount spent onconstruction; this number was used with the specific multipliers for the constructionindustry (given in the I-O Model) to determine the indirect and induced constructionimpact. Taxes generated from construction were also calculated using constructionindustry tax revenue multipliers.

Because sales revenue from VITP companies is used with the multipliers, all taxrevenue and construction impact is already included; this is due to taxes being paidout of sales revenue, and construction being funded, more or less, by rents, whichalso come from sales revenue. Additionally, in order to avoid counting the samedollar of sales revenue twice, we have excluded the VITP office, WSI property

3 Table 5, page 22, British Columbia Provincial Economic Multipliers and How to Use Them,1999




Methodology

management, and Corps Commissionaires sales revenue amounts, as all of theirsales revenue comes from the sales revenue of VITP companies. Essentially, VITPmanagement and facilities management are suppliers of VITP businesses andtherefore are already counted as part of the indirect impact. If their revenue was

counted in the sales revenue total for VITP, those dollars would have been countedtwice.

Because all taxes (municipal, provincial and federal) are automatically included inthe economic impact when the sales revenue is run through the sector-specificmultipliers, we need to subtract out the federal tax revenue to isolate the provincialeconomic impact. Most of our figures and information are presented as provincialeconomic impact, so the federal tax has been subtracted from the total economicimpact to get the numbers presented. It is important to mention that some federaltax dollars will in fact be returned to BC and re-invested in this province; however,it would be impossible to determine what proportion of federal tax has an impactprovincially. By excluding federal tax entirely, we avoid any possibility of includinginappropriate tax revenues in our final figures, but it means that the total dollarimpact we have calculated is very conservative.

Business visitors to VITP are generally funded by sources external to VITP, forinstance, executives from other tech parks may visit VITP for a conference, orpotential investors may visit VITP companies. As these visitors usually pay for theirown expenses, rather than VITP companies paying for the visitors’ expenses fromtheir sales revenues, we count the revenue the visitors inject into the localeconomy as an additional impact. The out-of-town visitors’ economic impact isadded to the total sales revenue impact to create the total economic impact of VITPon BC’s economy.

In an effort to be both conservative and accurate in our results, the safety netmultiplier for induced effects was used. “Double counting”, which is counting directeffects from one company as indirect effects from another company, may alsocomplicate our results slightly. An example of double counting would be if onecompany at VITP purchased products from another company at VITP. The purchasewould be reflected in the direct sales of the first company and in the indirect salesof the second. We have made every effort to avoid any instances of double countingin our survey and data calculations; however, double counting is difficult toeliminate completely.

It is also important to note that economic impact studies based on sales revenuescollected from companies may underestimate the actual impact an organization if firms are in a state of rapid growth. For example, many young start-up companiesmay not yet have significant revenues but may be receiving funds in the form of venture capital or debt financing. A portion of these funds would be spent locallyand would have an impact on the economy. Many of the firms in our study areexperiencing rapid growth and therefore we have likely underestimated the total




Methodology

economic impact that the companies at VITP have on the province. This is furtherevidence that our results are conservative.

In addition to the tenant survey completed by companies at VITP, we also

implemented an employee survey to gather information about employee purchasesover the past 12 months, salary levels, quality of employment, quality of life, andlocation of residence. The survey was completed by a random sample of 142 VITPemployees. A copy of the employee survey may be found in Appendix IV. In theevent that VITP’s owners and managers decide to implement another EIS in 2006,we have provided some suggestions on how to streamline the study in the future inAppendix V.




Results

Results: Tenant Survey

The tenant survey was undertaken to give a numerical picture of VITP’s role in theprovincial economy. The results below provide important information about VITP’scontribution to the province. University technology parks such as VITP play a majorrole in enabling the transfer of technology and innovation between academia andthe business world. This economic development function offers important benefitsto the local community. We have endeavored to measure the economic impact of VITP by completing an Economic Impact Study (EIS) for the fiscal year 2005.

We collected information from each company located at the technology park using acomprehensive tenant survey. The combined total sales revenue of all tenants in2005 was used to calculate the indirect and induced sales revenue generated

locally, and to estimate the direct, indirect, and induced tax revenue impact.Information about the number of employees working at VITP as well as total salesrevenue, were used to estimate the number of indirect and induced jobs created inthe economy. We also collected construction data which was used to estimate theindirect and induced sales revenue, tax revenue, and employment impacts resultingfrom construction. Finally, survey data about the number of visitors to VITP in 2005was used to estimate the indirect and induced business visitor impact on the localeconomy.

VITP Employment Impact

Our survey results indicate that 995 people were employed by the companies atVITP in the 2005 fiscal year (Table 1). The majority of these jobs are hightechnology positions requiring advanced skills and education. In addition to thesedirect jobs, VITP tenants also generate indirect and induced jobs in the localeconomy. As the park’s tenants purchase goods and services from other localbusinesses, additional jobs are supported in those businesses. VITP generated 659indirect jobs in British Columbia. When the park’s employees and those in relatedbusiness spend their salaries in the economy, they too support additional jobs inretail, services, government, and other sectors. VITP generated 363 such induced jobs. As part of this impact, construction completed at the technology park in 2005generated 102 direct, indirect, and induced jobs. Six additional direct, indirect, andinduced jobs were also generated by the spending of out-of-town business visitors.Therefore, the total employment impact that VITP tenants had in the province was2,023 jobs.

Obviously, the tenants of VITP have a significant impact in British Columbia withrespect to creating high quality employment opportunities in Victoria andsupporting additional service-sector jobs in the province. The types of jobs offeredat VITP play a critical role in attracting highly educated, talented workers to Victoria




Results

and keeping graduates of local universities and colleges from moving elsewhere insearch of employment.

Table 1: Employment impact of VITP in British Columbia, FY 2005.

Type of Employment Impact Number of jobs generated

Direct Jobs 995

Indirect Jobs 659

Induced Jobs 363

Business visitor generated jobs (direct,indirect and induced)

6

Total 2023

Total Dollar Impact

The economic impact of VITP tenants in British Columbia based on 2005 FY datawas $279.9 million. This figure was calculated from sales revenue, and thereforeimplicitly includes municipal and provincial tax revenue, as well as constructionimpact, as these amounts are all generated from the sales revenues of thebusinesses at VITP. We excluded federal tax revenues generated by VITP from thetotal impact because this EIS is only concerned with VITP’s impact on the provinceof British Columbia. Business visitor impact is not directly generated by the salesrevenue of the VITP companies, so it was added on to the sales revenue impact to

give the total impact. A comprehensive description of how these different impactscontributed to the total dollar impact is presented below.

VITP Sales Revenue ImpactIncludes: Provincial and Municipal Taxes,

Construction ImpactExcludes: Federal Taxes

+


=

VITP ’s Total Dollar Impact




Results

VITP Sales Revenue Impact

Our results indicate that the tenants at VITP produced $160.2 million in direct sales

revenue in FY 2005, net of federal taxes. Due to a multiplier effect, an additional$86.5 million in indirect sales and $32.8 million in induced sales were generated inthe economy. Consequently, the tenants of VITP contributed a total of $279.5million in sales revenue to the BC economy. This amount includes the provincial andmunicipal taxes generated in 2005, as well as the impact resulting fromconstruction projects that year.

Clearly, the companies at VITP are generating significant sales and creating wealthin the province. These sales revenues support the wages paid to VITP employeesand create a foundation for re-investment by companies in research anddevelopment.

Figure 1.

Total VITP sales revenue impact FY2005

$160,187,914$86,539,276

$32,815,692

Direct Sales Revenue Indirect Sales Revenue Induced Sales Revenue




Results

Tax Revenue Impact

VITP companies generate significant tax revenues at the municipal, provincial andfederal level. Direct tax revenues to government were amounts paid as a result of

VITP tenant expenditures, and included taxes paid on equipment and supplypurchases. Indirect and induced tax revenues are associated with spending by thecompanies that supply VITP, as well as employee spending. Business visitors alsocontributed tax revenues, as did construction activity.

In FY 2005, activities at VITP contributed a total of $42.1 million in tax revenues tothe Canadian economy, including $18.8 million in federal taxes, $19.1 million inprovincial taxes, and $4.2 million in municipal taxes. These amounts are implicitlyincluded in the total sales revenue impact presented earlier, but we have brokenthem out here to demonstrate that VITP tenants provide the various levels of government with a considerable amount of tax revenue.

The focus of this economic impact study is the effect of VITP on the BritishColumbia economy. Therefore, the amount of federal tax revenue generated hasbeen excluded from the final figure calculated for the total dollar impact of VITP onthe provincial economy.

Figure 2.

Total Tax Revenue Impact FY 2005

$18,807,351

$19,111,507

$4,182,038

Federal Tax Impact Provincial Tax Impact Municipal Tax Impact

Construction Impact




Results

Part of the overall economic impact of VITP in 2005 is construction spending byVITP itself and some companies within VITP. This construction impact is included inthe sales revenue impact calculated earlier, but we have broken out the figures forillustrative purposes. In 2005, $7.2 million in direct sales revenue was generated by

construction activity as existing facilities were renovated or upgraded to betterserve the needs of tenants. Due to a multiplier effect, an additional $3.6 million inindirect sales revenue and $1.2 million in induced sales revenue was generated.Therefore, the total construction impact was $12.1 million (Figure 3).

As part of this economic impact, construction projects at VITP directly employed 61workers, and created 29 indirect jobs and 12 induced jobs due to spin-off effects inthe economy. Overall, construction at VITP generated a total of 102 jobs in BritishColumbia. Again, these jobs have been included in the total jobs calculated in aprevious section. We have shown that construction at VITP not only injected moneyinto the local economy but also created a significant number of jobs in the province.

Figure 3.

Construction Sales Impact FY 2005

$7,233,516

$3,616,758

$1,229,698

Direct Impact Indirect Impact Induced Impact




Results


We collected information from each tenant about the number of visitors to VITP inFY 2005 and the average length of stay in order to estimate the economic impact of these visitors on the province. Visitors included out-of-town consultants, individualsattending conferences, investors, and researchers from other universities orbusinesses. These visitors would typically be funded by sources external to VITP,and therefore revenues generated by these visitors have been added to VITP salesrevenues to give the total dollar impact.

There were a total of 1991 days spent in Victoria by business visitors, who onaverage spent $156.85 per day. As a result, $312,288 was spent onaccommodation, food and beverages, local transportation, recreation, and retail byVITP visitors. This direct spending also generated indirect and induced effects in the

economy, with respect to sales revenue and jobs. Therefore, business visitors toVITP generated a total of $395,632 in sales and six jobs in British Columbia. Ourresults demonstrate that there is a great deal of interest in VITP’s operations fromoutside Victoria and outside the province, and a significant number of visitorstraveled here for a variety of purposes, contributing a considerable amount to thelocal tourism industry.

Summary of Tenant Results

Our research has shown that VITP and its tenants had a significant positive impact

on the economy of British Columbia, creating large amounts of sales revenue,increased activity at local businesses, and substantial municipal and provincial taxrevenues. We have also shown that VITP generated a considerable number of jobsin the province.

Based on 2005 data, the companies at the VancouverIsland Technology Park contributed over $279 million

to the economy of British Columbia.




Results

Results: Education and Origin of VI TP Employees

When administering our tenant survey we also collected data on the number of VITP-based employees holding a bachelor’s degree, master’s degree, or PhD. Inaddition, we asked about the number of people who moved from outside of BC toaccept a job at VITP, and how many moved from outside of Canada. We wereinterested in finding out how the level of education attained by VITP employeescompares to the education level of the general population in British Columbia, andwe also wanted to determine whether or not the type of employment offered atVITP is attracting skilled workers from other areas of the country and around theworld.

In FY 2005, 37.5 per cent of VITP employees held at least a Bachelor’s degree(Table 2). Of these, 6.3 per cent of individuals held a Master’s degree and 2 percent held a PhD. For illustrative purposes it is interesting to compare these figures

to the education levels of the general population in British Columbia. The mostrecent Census taken by Statistics Canada in 2001 indicated that just 17.63 per centof individuals aged 20 and older held at least a bachelor’s degree4. Only 3.16 percent of British Columbians held a master’s degree, and just 0.63 per cent held aPhD. Clearly, the level of education attained by VITP employees is significantlyhigher than that of the general population. This demonstrates that the type of employment offered at VITP is attracting highly educated individuals. It furtherconfirms that the companies located at VITP are engaged in a knowledge economywhere it is essential to employ talented, skilled, and educated workers.

Table 2: Percentage of VITP employees who have obtained higher educationdegrees compared to the general population of British Columbia.

VITP employees British Columbia

Bachelor’s Degree 37.5% 17.6%Master’s Degree 6.3% 3.2%Ph.D 2.0% 0.6%

Our tenant survey results also indicate that 5 per cent of employees had livedoutside of British Columbia but within the rest of Canada prior to accepting a job atVITP. An additional 3 per cent of employees lived outside of Canada prior toworking at VITP. This shows that while the majority of workers were from within

British Columbia, at least 80 employees moved here from elsewhere to work atVITP. Clearly, the type of employment available at VITP is attracting skilled workerswith advanced degrees from other areas of the country and around the world.

4 http://www40.statcan.ca/l01/cst01/educ41c.htm




Results

Results: Employee Survey

In addition to employing a tenant survey to collect data for our Economic ImpactStudy, we also collected information from 142 individual workers at the VancouverIsland Technology Park. An employee survey was used to gain insight aboutemployee purchases over the past 12 months, salary levels, quality of employment,quality of life, and location of residence. Based on the sample size and using a 95per cent confidence level, the results are considered accurate within +/- 7.5 percent. Results of the employee survey are shown in Table 3.

Table 3: VITP Employee Survey Results.

Have you purchased a homeor recreation property in the

past 12 months?

19% YES 81% NO

Have you done any significanthome improvements in thepast 12 months?

27% YES 73% NO

Have you purchased a vehiclein the past 12 months?

32% YES 68% NO

Compare your current salary& benefits to the wages youearned prior to working atVITP – is your current salaryhigher/lower/same?

70% Higher 18% Lower 12%Same

Do you feel that the quality of your job at VITP is higher thanyour previous job?

77% Higher 20% Lower 3% Same

Do you feel your quality of lifeis higher now than it was priorto working at VITP?

76% Higher 22% Lower 2% Same

We found that 19 per cent of VITP employees purchased a home in the past 12months, and 27 per cent did significant renovations on their home. We also foundthat 32 per cent of employees purchased a vehicle. Evidently, these individuals aremaking significant purchases that contribute a great deal to the local economy.VITP workers are earning a living that allows them to make investments in property

and vehicles and to make improvements to existing properties.

Seventy per cent of employees indicated their salary is higher at VITP than at the job they held prior to coming to VITP. We believe that the high-tech nature of employment at the companies located at VITP requires higher education levels andhighly skilled workers. As a result, these jobs tend to pay high salaries. Clearly,workers are earning competitive wages and they are earning more at VITP thanthey earned in previous jobs. High salaries could be another feature that is




Results

attracting talented workers to VITP from other areas of British Columbia, Canada,and the rest of the world.

With respect to employment quality and quality of life, 77 per cent responded that

the quality of their job is higher at VITP than in their previous employment, and 76per cent indicated the quality of their life is higher. We think that workers arehappy at VITP because their jobs are more challenging and enjoyable, and becausethe environment and services offered at VITP are beneficial. During our datacollection we had a chance to talk with many employees, and we were toldconsistently that people love having access to a fully-equipped gym at theworkplace, and they really enjoy the food services offered in the Hard Drive Café.People also appreciate the walking/jogging trails that surround VITP and theoutdoor basketball courts. Undoubtedly, VITP offers a pleasant workingenvironment that promotes well-being and health, which improves the quality of employment and quality of life of its employees.

As shown in Table 4, our survey found that 26 per cent of individuals live inSaanich, 12 per cent live in Victoria or the downtown core, and 10 per cent live inOak Bay. Smaller percentages of workers live in Esquimalt, Colwood, Langford, andSooke. A few individuals even live permanently in Vancouver and Seattle but workat VITP during the week. Therefore, the majority of VITP workers live within a 15-20 minute drive, but many people are willing to have longer commutes in order towork at VITP. This suggests that the figures we have presented are relevant notonly to BC and Vancouver Island generally, but more specifically to thecommunities of Saanich, Victoria, and Oak Bay.

Table 4: Location of residence of VITP employees in 2005.

Municipality in which employeeslive

Percent of respondents

Saanich 26%

Victoria/Downtown 12%

Oak Bay 10%

Esquimalt 5%Colwood 4%

Langford 4%

Sooke 3%Vancouver/USA 2%

Other municipalities(less than 2% of respondents each)

34%




Qualitative Analysis


The tech park model is not a new concept; however, there is an increased focus on

clean, sustainable jobs as a desirable cornerstone of any local economy, resulting inrenewed interest in tech parks and other clusters of clean industries. VITP hasdeveloped according to principles of sustainable development, environmentalstewardship, and clean construction. These principles are evidenced by itsLeadership in Energy and Environmental Design (LEEDTM) 2.0 Gold rating from theU.S. Green Building Council.

For potential tenants, part of the draw of university research parks, such as VITP, isthe interactive community of like-minded individuals and companies. Relationshipsdevelop and ideas are exchanged among the various firms, partially due to regularinteraction with each other in common physical areas, such as workout facilities,

high-tech meeting rooms, and the on-site café. Marti (2004) observes thatsustainable competitive advantages in the knowledge economy are built by both acompany’s internal intellectual capital and the intellectual capital of othercompanies, and organizations, especially those within technology clusters.5

Research parks such as VITP become knowledge collectives where synergies andcross-functional knowledge sharing between companies can foster greater creativityand discovery, and therefore these parks become very effective in drawing techcompanies of many sizes to Victoria. Carrie (1999) suggested regional clusters willcompete for business success over the next few decades, rather than the traditionalcompetition among individual firms. Furthermore, success will be closely linkedwith the knowledge management and knowledge assets of the organization.6 VITP

is following this regional cluster model with considerable success.

High tech companies’ assets are the employees that they can attract and keep, andthe knowledge, skills and abilities that these highly educated employees bring towork each day. Lucas (1988) argues the clustering of talented people or humancapital provides increased productivity, which drives the development of cities andregions.7 Glaeser’s (2000) research provides evidence of the linkage betweenlevels of talent and regional economic development.8 These academic papers serveas additional reinforcement of the value of the technology cluster concept embracedby VITP.

5 Marti, J (2004). Social capital benchmarking system: Profiting from social capital whenbuilding network organizations. Journal of Intellectual Capital, 5(3) pp426-4426 Carrie, A (1999. Integrated cluster: the future basis of competition. International Journalof Agile Management Systems 1 (1) pp45-507 Lucas, R. (1998). On the mechanics of economic development. Journal of MonetaryEconomics, vol. 22 pp1-428 Glaeser, E. (2000). The new economics of urban and regional growth. Oxford Handbookof Economic Geography, pp83-98. Oxford University Press.





"Municipal Software Corporation has grown from two employees at itsinception in 1982 to more than 40 people locally. We wanted to ensure thatour new corporate facility would accommodate our steady growth, as well asprovide a pleasing and dynamic working environment for our employees and

our customers. We believe our new location will help us continue to attractand retain the high-calibre employees that are so important to our business.It's essential to provide a healthy productive environment for our employees.And VITP's LEED Gold rated facility delivers that. We will also need to bringour government customers from all over North America to a world-classfacility, and it was clear that the Tech Park provided the best flexibility andopportunity for us."

~ Rob Bennett, President & CEO. Municipal Software

Part of the positive impact of VITP is providing challenging, rewarding and lucrativework opportunities to the many local graduates leaving post-secondary institutionsin Victoria and the rest of the province. The above quote from Rob Bennett alsoarticulates the importance of a creative work environment and comfortable physicalsurroundings in keeping employees contented and interested in a long term workcommitment. The high level of job satisfaction found through our employee surveyindicates VITP is succeeding in creating a positive, creative work environment for itstenants’ employees.

VITP has a partnership on many levels with UVic; this partnership includesfacilitating student cooperative placements, employing recent graduates of UVic, joint research initiatives and special educational programs. These joint initiativesaid in retaining skilled young workers in the provincial economy.

In addition to offering high quality employment opportunities to the localpopulation, VITP’s development strategy emphasizes construction of sustainablefacilities and responsible stewardship of the land, water and air of the VITPgrounds. There are abundant trails, green space and recreation areas on the VITPgrounds, as well as an environmentally sensitive parking area and public displays of biofiltration.

The ability to convert technological innovation into high levels of local industrialproductivity and global competitiveness is one of the main producers of wealth inindustrialized and developed countries.9 VITP’s innovation network ties togetherthe research and innovation of academia and the commercialization of new ideas,

resulting in an increased ability for BC to compete in the global technology market.Greater competitiveness from our local companies leads to long term success andgrowth in BC’s research and technology sector.

9 Scheel, C. (2002). Knowledge clusters of technological innovation systems. Journal of Knowledge Management, 6 (4) p356-367




Planning for the Future

Figure 4.

2,023

3,891

0

5001,000

1,500

2,000

2,500

3,000

3,500

4,000

2005 2008

Total Employment Impact of VITP in BritishColumbia: FY 2005 and projected FY 2008

Figure 5.

$23,293,544

$65,083,066

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

2005 2008

Total Tax Revenue Impact of VITP in

British Columbia: FY 2005 and projectedFY 2008




Planning for the Future

Figure 6.

$279,938,514

$750,022,230

$0$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

2005 2008

Total Economic Impact of VI TP in BritishColumbia: FY 2005 and projected FY 2008

Total Sales Revenue Impact Total Business Visitor Impact

The high level of growth forecasted by the companies at VITP is not typical of themost recent annual economic growth rate in BC of 3.5 per cent10; however, it is notsurprising as many VITP companies are in the start-up phase of their business, andthey are bringing new ideas and technology to market. Although the scale of

growth is interesting, these results are only for existing tenants; the increasesshown in figures 4-6 do not give any information about new tenants who areinterested in renting space in VITP now or within the next three years, which willresult in additional sales revenue and employment growth.

Our best source of information about the expansion of existing tenants and possiblenew tenants at VITP is the construction estimates for 2008 from the VITP facilitiesdepartment. VITP is following a “70/30” expansion plan, where 70 per cent of expansion will result from existing tenants and 30 per cent of expansion will resultfrom new local or international companies. Their estimated expenditure range forconstruction in FY 2008 is $17 million to $34 million, which will create between

50,000 and 200,000 square feet of additional space. VITP’s low present vacancyrate of 3 per cent and the planned expansion clearly show VITP is a desirable placeto do business. Additionally, although companies at VITP are already experiencingsuccess, they will grow considerably over the next three years, providing additionalhigh quality jobs and creating more wealth in the province of BC.

10 Canadian Economic Observer, May 2006. www.statcan.ca/english/ads/11-010-XPB/pdf/may06.pdf






Our 2005 EIS has found that the companies at the Vancouver Island TechnologyPark contributed over $279.9 million to the economy of British Columbia. $279.5

million of this amount was VITP sales revenue, which includes $23.3 million in taxrevenue, and $12.1 million in construction impact. The additional $396,000 can beattributed to business visitor impact. VITP had a total employment impact of 2023 jobs – 2,017 from VITP tenants (which includes 102 from construction), and sixadditional jobs created by business visitors (Table 5).

Table 5: Summary of VITP ’s impact on the BC Economy, FY 2005

Total Economic ImpactDollar Impact $279.9 mil lion

Includes:$4.2 million in municipal tax, $19.1 million in provincial tax,

$12.1 million in construction impact EmploymentImpact

2023

In addition to contributing to the province financially, VITP also offers qualitativebenefits to local residents and the community. Our research has determined thatVITP tenants play a significant and important role in the BC economy. In addition tofostering collaboration and promoting the transfer of knowledge betweenuniversities and industry, the technology park also creates wealth and generates jobs in the province. VITP’s tenants provide quality employment opportunities for

graduates of the University of Victoria, Royal Roads University, and CamosunCollege, and it also attracts talented workers from other areas of Canada and othercountries.

Our results demonstrate that VITP companies contribute a substantial amount of sales revenue in the province, and generate considerable tax revenues formunicipal, provincial, and federal governments. We have also illustrated that, onaverage, VITP employees are earning higher salaries, enjoy a higher quality of life,and higher quality jobs than they did prior to working at VITP. Based on 2005figures, we have clearly shown that the companies at VITP have a significant impacton the economy of British Columbia.




Works Consulted

Works Consulted

Bongiorno, Steven J. (1994) States innovate programs to grow high-tech industry.Industry Week/IW, Vol. 243 Issue 17, pg 53.

Broomhall, D. The use of multipliers in economic impact estimates. AgriculturalEconomics, Purdue University Cooperative Extension Service. West Lafayette,Indiana.

Charney, A. and Pavlakovich-Kochi, V. (2003). University of Arizona ResearchExpenditures: Generating jobs, wages, and tax revenues in the local economy. Aneconomic and tax revenue analysis for FY 2002. University of Arizona Office of Economic Development, USA.

Cross, P. and Ghanem, Z. (2006). Multipliers and Outsourcing: How industriesinteract with each other and affect GDP. Canadian Economic Observer, January2006. Statistics Canada – catalogue no. 11-010.

Greater Victoria Economic Development Commission: www.bizvic.com

Horne, Garry (2003). British Columbia Provincial Economic Multipliers and how touse them. BC Stats, British Columbia Ministry of Management Services.

Link, Albert N. (1996). Economic Impact Assessments: Guidelines for conductingand interpreting assessment studies. Publication from the University of North

Carolina at Greensboro. Accessed online at http://www.nist.gov/director/prog-ofc/rept-961.htm.

Link, Albert N. (2003). University-Related Research Parks. Issues in Science & Technology, Vol. 20 Issue 1, p 79-81

Pavlakovich-Kochi, V., and Charney, A. (2000). Impact of the University of ArizonaScience and Technology Park on the Economy of Tuscon and Pima County: AnEconomic and Revenue Impact Analysis 1999. University of Arizona, USA.

Pavlakovich-Kochi, V., and Charney, A. (2002). Impact of the University of ArizonaScience and Technology Park on the Economy of Tuscon and Pima County: AnEconomic and Revenue Impact Analysis for FY 2000-2001. University of Arizona,USA.

Pavlakovich-Kochi, V., and Charney, A. (2005). Economic and Tax Revenue Impactsof the University of Arizona Science and Technology Park during FY 2003-2004.University of Arizona, USA.

Regional Economic Profile: www.city.victoria.bc.ca/business/profiles.shtml




Works Consulted

Schumacher, C., Lysnar, P., McLaren, E., Arin, P., and Spoonley, P. (2004). SmalesFarm Technology Office Park: A Social and Economic Impact Study. MasseyUniversity, Auckland.

National Association of State Universities and Land-Grant Colleges (2001).Shaping the Future: The economic impact of public universities. Washington DC,USA.

Walcott, Susan M. (2002). Chinese Industrial and Science Parks: Bridging the Gap.Professional Geographer, Vol. 54 Issue 3, p349-364

Westhead, P and Batstone, S. (1998). Independent Technology-based Firms: ThePerceived Benefits of a Science Park Location. Urban Studies, Vol. 35 Issue 12,p2197-2219




Appendices

APPENDIX II

DEFINITIONS The British Columbia Input-Output Model was developed by BC Statistics and isbased on data collected in 1999 by Statistics Canada. This model structures thebusiness sector of the entire British Columbia economy in terms of who makes whatand who uses what. It is used to estimate how an increase in output in one industrywill impact on other industries and therefore on the entire economy.

Multipliers estimate how much additional economic activity will result from anincrease in output in an industry. The relationship between one form of economicactivity and the total additional activity it generates is called the multiplier effect.For example, an aggregate economic multiplier of 2.50 would mean that for each

dollar of output produced in an industry, $2.50 is generated in the economy.Multipliers are used to calculate indirect and induced effects in the economy.

Direct jobs refer to the number of jobs in the organizations involved in the study.They include regular and contract jobs. Associated with direct jobs are directwages and salaries paid to employees.

Indirect jobs are generated through purchases of supplies and services from othercompanies, resulting in an increased demand for products and services in otherindustries and their increased demand for labour input. These new jobs insupporting industries are referred to as indirect jobs. Accordingly, wages and

salaries paid to those employees are called indirect wages. The more a companybuys from other firms in the area, the larger the number of indirect jobs will be inthat area. Otherwise, these jobs will be generated outside the region.

Induced jobs result as employees in both the companies involved in the study andtheir supplying businesses spend their incomes in the community; this generatesadditional jobs and associated induced wages. Typically, most induced jobs aregenerated in retail and services sectors, reflecting household expenditure patterns.

Sales correspond to “output”, defined in the input-output model as the value of production. For construction sectors, output is equal to sales of constructioncompanies; but the value of the construction project equals the construction output

(sales) plus the cost of materials and outside subcontractors required for theproject.

Direct tax revenue impacts are generated by expenditures by the firm orbusiness itself. The company makes purchases and expenditures that generate taxrevenue dollars to the municipality of Saanich, the province of British Columbia, andCanada.




Appendices

Induced tax revenues are those revenues that are generated when income orwages are spent in the local economy. When a new industry hires workers, theirpayroll represents an increase in income to the area. As this money is re-spent,taxes are paid in the form of sales taxes, property taxes, and fuel taxes. In

addition, when a basic industry expands, the output and work force of otherindustries that sell to the basic industry also expand. Workers in these linkedindustries also re-spend their money in the community, thus generating taxrevenues.

Assumptions in this study

1) Any companies which had offices/operations outside of the tech park wereallocated a representative amount of the total sales revenue of the global company.As this only applied in one case and the type of work done in each location wassimilar, the percentage of the company’s employees that worked in the province

was used to allocate sales revenue (i.e. if 73 per cent of employees of the globalcompany were employed in BC, then 73 per cent of the global revenue wasallocated to that operation).

2) For any company not registered in BC (so therefore the company would onlypay provincial or federal income tax on a small amount of the profit it generated)we only used 70 per cent of their sales revenue for the study, to conservativelyallow for profits that would leave the province and therefore not have an economicimpact on the provincial economy.

3) When calculating the provincial economic impact of the sales revenue (direct,indirect and induced impact), federal tax had to be subtracted for each category,yet there is only one multiplier for both direct and indirect federal tax. Weallocated 66 per cent of the direct/indirect federal tax total to “direct federal tax” and 33 per cent of the direct/indirect federal tax total to “indirect federal tax”, thenwe subtracted those amounts from the total sales revenue impact for theirrespective categories.




Appendices

APPENDIX I II

Vancouver Island Technology Park

ECONOMIC IMPACT STUDYFiscal Year 2005

Please answer each question as accurately as possible. Where exact numbers are

unavailable, you may use your best estimate. If your fiscal year ends on March 31

2006, please do your best to predict your year-end figures. We would also like

you to forecast where you expect your company to be in three years.

Company contact person: ______________________________________

Phone number or e-mail address: ________________________________

Employees 2005 Forecast 2008

Total number of employees (FTE’s) for the fiscal year(average)

Please list the number of contract employees (includingout of town contractors, consultants, etc) not accountedfor above

Number of employees with Bachelors Degrees

Number of employees with Masters Degrees

Number of employees with Ph.D’s

Number of employees who lived out of province prior tobeing hired by your company

Number of employees who lived outside of Canada priorto being hired by your company

Payroll 2005 Forecast 2008

Total payroll (including benefits and source deductions)for the fiscal year

If the above total does not include any payments tocontract employees, please list those payments here

Taxes 2005 Forecast 2008

Is your business exempt from any taxes? (i.e property

tax) If so, please list:

Amount of GST paid in fiscal year

Amount of PST paid in fiscal year

Amount of Corporate Income Taxes for fiscal year

Amount of Corporate Capital Gains Tax (price overdepreciated value of equipment sold)




Appendices

Scientific Research and Experimental Development Grant(SR&ED) credits/rebates received in fiscal year

Research Grants 2005 Forecast 2008

Total value of grants received in fiscal yearExpenditures (Goods and Services Purchased by Your

Company)

2005 Forecast 2008

Equipment / Office Supplies / Hardware / Software

Communications

Hotels

Restaurants

Services (Accounting, Banking etc…)

Auto Repairs / Service

Entertainment

Construction (including renovations or expansion)

Transportation (including airfare)

Education / Professional Development

Expenditures (Goods and

Services Purchased by Your

Company)

Manufactured in

British Columbia

Manufactured in

rest of Canada

Manufactured

Outside of

Canada

Of goods and services purchasedin 2005, please estimate thepercentage:

Of the goods and services you

expect to purchase in 2008,please forecast the percentage:

Sales Revenues 2005 Forecast 2008

Please give your sales (revenues) for the fiscal year

Sales (Goods and Services

Sold by Your Company)

Sold to

Customers in

British Columbia

Sold to

Customers in the

rest Canada

Sold to

Customers

Outside of

Canada

Of the goods and services soldby your company in 2005,please estimate the percentage:

Of the goods and services youexpect to sell in 2008, pleaseforecast the percentage:




Appendices

Visitors 2005 Forecast 2008

Out-of-town visitors/consultants connected with VITPcan inject significant revenue into the local economy.Please estimate the total number of out-of-town visitorsyour company had in the fiscal year:

Average number of days per visitor




Appendices

APPENDIX IV

Anonymous Employee Survey

1) Have you purchased a home or recreation property in the past 12 months? Y or N(optional) cost: $_________________

2) Have you done any significant home improvements in the past 12 months? Y or N

3) Have you purchased a vehicle in the past 12 months? Y or N

4) Compare your current salary & benefits to the wages you earned priorto working at VITP – is your current salary/benefits: Higher or Lower

5) Do you feel that the quality of your job at the Tech Park is higher than Y or Nyour previous job?

6) Do you feel your quality of life is higher now than it was prior to working Y or Nat the Tech Park?

7) Have you earned a degree from a university in BC? Y or N

Thank you for your help!




Appendices

APPENDIX V

Our recommendations to any consulting team that conducts an economicimpact study at VITP in the future are as follows:

1) Shorten the tenant surveyThe survey that we developed asked for extraneous information that wasnever needed to complete our analysis. The length of the survey alsoimpeded timely collection of information from each company. Therefore,it is recommended that the survey be shortened to include only thequestions about employees and sales revenues.

2) Eliminate business visitor impact from the studyWhile the business visitor impact may be interesting to some

stakeholders, the calculations are onerous and time-consuming, and theimpact itself is negligible compared to the total impact of the technologypark. Therefore, to save time and effort it is recommended this impact beignored in future studies.

vitp eis full report 20061201

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