Issue 16-177: Profile of the British Columbia Technology Sector 2015

September 20, 2016

The high technology sector is an integral part of the B.C. economy. The recognition of the importance of the sector to the province is reflected in its development of the #BCTECH Strategy, which outlines an approach to continue to nourish the sector and ensure its growth.

High technology firms tend to be innovative and efficient, creating goods and services that confer benefits on other parts of the economy by improving productivity and profitability, while at the same time providing relatively high-wage employment. The tech sector in British Columbia is still relatively small, but the province is home to high tech clusters in areas such as digital media and biotechnology that are among the best in the world.

There was a 3.3% increase in the gross domestic product (GDP) of British Columbia’s high technology sector in 2014. Growth was slightly higher in the manufacturing industries within the high technology sector, expanding 4.0% to over $1.5 billion, compared to 3.2% growth in the sector’s service industries, to almost $12.0 billion.

Over the last decade, GDP in the high tech sector has grown faster than that of the industrial aggregate in all but two years (2004 and 2009). In 2014, high technology accounted for approximately seven percent of British Columbia’s overall economic output.

British Columbia’s high tech sector produced around $25.8 billion in revenue in 2014, a rise of 4.8% from 2013. Revenue climbed in both the manufacturing and service sectors, growing 6.3% and 4.5%, respectively.

There was a 2.5% boost in high technology employment in British Columbia in 2014. The number of high tech jobs in the province climbed to 92,700, the highest level ever recorded. The high tech sector employed around 4.6% of British Columbia’s workforce in 2014, more than the mining, oil and gas, and forestry sectors combined.

Aggregate wages and salaries in B.C.’s high tech sector also continued to rise, climbing 5.8%, to $7.6 billion in 2014, the highest level ever recorded. This was the fourth consecutive year that total high technology wages and salaries reached a new peak. In 2014, average weekly earnings of high tech employees were $1,580 per week, compared to just $900 for the average B.C. worker.

There were 9,720 businesses with employees in B.C.’s high technology sector in 2014. About 93% of these businesses were in service sector industries. The count of high tech businesses with employees climbed 3.0% from June 2013 to June 2014.

The value of B.C.’s high technology product exports jumped 10.3% in 2014, to over $1.1 billion. By comparison, the total of all goods exported from the province grew 7.0%. Given the faster growth for international shipments of high tech commodities, the proportion of B.C.’s overall exports comprised of high technology goods rose to 3.2%.

In 2014, there was a 9.7% jump in shipments of high tech goods from B.C. to the United States, while high tech exports to the European Union (+6.8%) and the Pacific Rim (+3.7%) grew at a slower rate. However, high tech exports to the rest of the world soared 26.8%.

There was a 5.1% increase in imports of high tech goods into B.C. in 2014, to $6.1 billion, which marked an all-time high. An 11.7% surge in imports from the United States returned that country to the position of top source for high tech goods for British Columbia, edging out Mainland China. Together, Mainland China and the U.S. were responsible for 61% of all the high tech goods imported into the province. Imports from China grew 8.2%, which offset declines in shipments from South Korea (-43.8%), Taiwan (-16.6%) and Japan (-6.8%), such that overall imports from the Pacific Rim still increased by 1.7%.

High tech imports from the European Union climbed 4.0% in 2014, with particularly strong growth in shipments from Italy (+14.1%). Shipments from Mexico, the third largest source for high tech commodity imports into B.C., rose 3.2%.

British Columbia imports far more high technology goods than it exports and, as a result, the province runs a substantial trade deficit in these commodities. Although exports grew at a faster rate than imports in 2014, in absolute terms, the increase in value of imports was larger, such that B.C.’s high tech trade deficit increased to $4.8 billion, or more than four times the total value of B.C.’s high tech exports.

Computers and telecommunications products dominate both exports from and imports to British Columbia, with aerospace goods and life sciences products (which are mainly comprised of medical equipment) the next two most important commodity groups.

Trade in goods is an important component of B.C.’s high tech sector, but trade in services plays an even larger role. In 2014, there was a 7.1% surge in B.C.’s exports of high tech services, which comprised just over three-quarters of B.C.’s total high technology exports (i.e., goods plus services).

The high technology sector in British Columbia ranked fourth among the provinces in terms of GDP, revenue, employment and business counts. However, B.C.’s high tech commodity exports were the third highest in the country and B.C.’s high technology employers offered the second highest wages. British Columbia’s tech sector trails behind the majority of U.S. states, with high technology making up a far smaller share of employment and GDP than it does in over half the states.

The complete report is available for download.