Issue 17-149 B.C. Technology Sector Profile: 2017 Edition

November 16, 2017

The business of high tech has grown to be an integral part of the global economy, including in British Columbia, which is home to a number of high tech clusters. Firms in the technology sector tend to be innovative and efficient, producing goods and services that drive economic growth by improving productivity and profitability for all types of businesses, while at the same time providing relatively high-wage employment. British Columbia’s technology sector is still relatively small compared to other jurisdictions, but it continues to grow in both size and importance.

There was a 3.5% rise in British Columbia’s high technology gross domestic product (GDP) in 2016, to almost $14.6 billion.  GDP increased in both the high tech manufacturing (+5.3%) and services (+3.3%) sectors. B.C.’s high technology sector generates around 7% of provincial GDP, placing it in the same range as industries such as manufacturing and health care.

Despite the fairly robust growth in 2016, this marked the second straight year that B.C.’s high tech sector grew more slowly than the overall economy. Historically, in most years the tech sector has outperformed the economy as a whole, but strong growth in some service sector industries, particularly real estate, has bolstered the industrial aggregate GDP and pushed growth above that of the tech sector.

In 2016, there was a 9.2% jump in revenue from British Columbia’s high tech sector, to $28.9 billion, the highest level ever recorded. Revenue grew in both the manufacturing and service sectors, with a 6.2% increase for manufacturing and a 9.7% rise for services.

Employment in B.C.’s high technology sector increased 4.1% in 2016, to 106,430, a new all-time high. Around 5.0% of British Columbia’s workforce was employed by the high tech sector in 2016, more than the mining, oil and gas, and forestry sectors combined, including the manufacturing activities related to those resources.

Aggregate wages and salaries paid by British Columbia’s high tech sector reached a new peak for the sixth consecutive year in 2016, climbing 7.4% to just under $9.4 billion. Employees of B.C.`s high tech sector earned $1,690 per week, on average, compared to just $920 for the average B.C. worker.

There were 10,236 businesses in B.C.’s high technology sector in 2016, a jump of 3.3% from a year earlier. About 93% of these businesses were in service sector industries.

B.C.’s exports of high tech services jumped 7.7%, to $4.5 billion in 2016. This comprised just over three-quarters of B.C.’s total high technology exports (i.e., goods plus services).

The value of B.C.’s exports of high tech goods dropped 2.1% in 2016, to just over $1.3 billion. This was in stark contrast to B.C.’s overall exports, which jumped 8.7%. As a result, the proportion of B.C.’s total exports consisting of high technology goods fell to 3.4%.

B.C.’s exports of high tech goods to the U.S. fell 7.7%, while shipments to Mexico plunged 82.6% and exports to the EU dropped 3.0%. However, there was strong growth in exports to the Pacific Rim (+11.6%) and the rest of the world (+35.8%).

Imports of high tech goods into the province also fell in 2016, down 4.8% to $6.5 billion. Imports from the U.S. fell 8.8%, shipments from Mexico dipped 1.6%, goods arriving from the European Union declined 10.2% and there was a 2.4% reduction in incoming trade from the Pacific Rim. However, there was a 15.3% jump in imports from the rest of the world. Together, the U.S. and Mainland China were responsible for 62% of all the high tech goods imported into British Columbia.

British Columbia imported almost five times the value of high tech goods than it exported in 2016. Consequently, the province ran a substantial trade deficit in these commodities. That deficit narrowed somewhat in 2016, to just under $6.5 billion, as the drop in imports exceeded the decline in 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 third in GDP, revenue, employment and value of commodity exports, fourth in count of businesses, 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.

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