Issue 17-12: Profile of the BC Technology Sector: 2016
January 18, 2017
High technology has evolved into a key sector in the B.C. economy. 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. While the tech sector in British Columbia is still relatively small, the province is home to some of the top tech companies in the world and continues to expand.
The gross domestic product (GDP) of British Columbia’s high technology sector expanded 2.4% in 2015. The high tech manufacturing sector exhibited stronger growth, with GDP rising 3.4% to over $1.5 billion, compared to growth of 2.2% for GDP in the tech service sector, to almost $12.6 billion (GDP figures are in chained 2007$).
GDP in B.C.’s high tech sector has generally expanded faster than the overall economy over the last decade, although 2015 was an exception as strong growth in the real estate industry, in particular, helped boost the aggregate GDP growth rate to 3.1%. In 2015, high technology accounted for approximately seven percent of British Columbia’s overall economic output.
Revenue of British Columbia’s high tech sector climbed 5.0% in 2015, to $26.3 billion. Both the manufacturing and service sectors boosted their revenues, with a 3.4% increase for manufacturing and a 5.3% rise for services.
British Columbia’s high technology sector employment eclipsed 100,000 for the first time in 2015, rising 2.9% to 101,780. Around 4.9% of British Columbia’s workforce was employed by the high tech sector in 2015, more than the mining, oil and gas, and forestry sectors combined.
In 2015, aggregate wages and salaries in B.C.’s high tech sector also continued to rise, climbing 4.5%, to over $8.4 billion, reaching a new peak for the fifth consecutive year. In 2015, average weekly earnings of high tech employees were $1,590 per week, compared to just $910 for the average B.C. worker.
The number of high tech businesses with employees in B.C. climbed by 1.9% in 2015, to 9,905. About 93% of these businesses were in service sector industries.
In 2015, B.C.’s exports of high tech services jumped 6.7%, to $4.2 billion. This comprised just over three-quarters of B.C.’s total high technology exports (i.e., goods plus services).
There was a 20.4% jump in the value of B.C.’s high technology commodity exports in 2015, to almost $1.4 billion. By comparison, the total of all goods exported from the province edged up only 0.3%. 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 3.8%.
B.C.’s shipments of high tech goods to the U.S. jumped 18.4% in 2015, to $831.3 million. There was also robust growth in exports to the European Union (+21.5%), the Pacific Rim (+12.3%) and the rest of the world (+11.2%).
There was a 15.7% jump in imports of high technology goods into British Columbia in 2015, rising to an all-time high of $6.8 billion. Growth in imports was strong from most areas of the globe, including a 19.6% jump in shipments from the United States, a 23.6% increase in exports from the European Union and a 14.7% rise in shipments from Pacific Rim countries. The U.S. and Mainland China are the primary sources for high tech goods imported into British Columbia. Together, they were responsible for 63% of all the high tech goods imported into the province.
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 2015, in absolute terms, the increase in value of imports was larger, such that B.C.’s high tech trade deficit increased to an all-time high of over $5.2 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.
Among Canadian provinces, British Columbia’s tech sector ranks fourth in GDP, revenue and count of businesses, third in employment and value of commodity exports, and second in average weekly earnings. 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 in B.C. than it does in over half the states.