CITY HOPING FOR EVEN MORE UNICORN SIGHTINGS
Region continues to move up tech rankings but attracting talent remains a challenge
It's the original unicorn in Calgary, but it's not the only one.
As local authorities aim to transform the city into a majorleague tech player, the challenge is how to continue the recent string of wins and nurture more firms to follow the path of Shareworks by Morgan Stanley and become billion-dollar entities.
Founded in 1999 as Solium Capital, the Calgary-based company earned the rare “unicorn” status in the sector after it was acquired by Morgan Stanley for $1.1 billion in 2019.
Shareworks remains rooted in the city, expanding its online benefits platform and stock plan administration services and technology. The local workforce has increased by 50 per cent to more than 750 employees during the past two years.
It's looking to keep growing, as the company searches to find the right talented workers.
“We continue to hire for 60 open tech positions right now, in addition to another 35 open positions across other functions,” former Solium CEO Marcos Lopez, now managing director of Shareworks and co-head of Morgan Stanley at Work, said in an interview Thursday.
“We can attract exceptional talent based on the exceptional quality of life that we have ... (but) it is hard to find good tech talent. It's highly competitive. That is not a Calgary problem, that is a global problem.”
The recent success of companies such as Shareworks, Benevity,
RS Energy Group and Parvus Therapeutics — all achieving $1-billion valuations over the past two years — proves tech firms can thrive in Calgary.
Success is tied to many factors, including the ability to find and attract a talented team of employees.
A report this week by CBRE found Calgary is quickly rising in the rankings of the top 50 “Tech Talent” cities in North America, with the scorecard based upon the community's ability to grow and attract skilled workers.
Calgary was cited as the second-fastest mover in this year's study, jumping six spots to 28th place. It now ranks behind Philadelphia and Charlotte, and just ahead of Pittsburgh and Kansas City.
“It's a testament to the work that's been done,” Brad Parry, interim president of Calgary Economic Development (CED), said Wednesday.
“People are starting to realize the great things that are happening here.”
Edmonton also joined the list this year for the first time, ranked in 38th place. The top Canadian cities included Toronto in fourth spot, Ottawa in 10th and Vancouver just behind the nation's capital.
For Calgary, the recognition arrives as several tech firms have expanded rapidly during the pandemic — such as Symend and Neo Financial — and international firms Infosys Ltd. and Mphasis Ltd. announced plans this year to set up shop in the city, bringing a combined 1,500 tech jobs.
“It confirms what we're seeing on the ground with exponential growth happening right now in Calgary in technology,” Jobs and Economy Minister Doug Schweitzer said Thursday.
“We are seeing an opportunity here to get thousands of Albertans working in the innovation and technology space.”
The CBRE report noted Calgary saw its technology workforce increase by 18 per cent in the past five years to more than 46,000 employees, with an average annual wage of almost $96,000.
The study examined 13 different categories to measure the “depth, vitality and attractiveness” for companies trying to secure talent, such as graduation rates and tech labour pool size.
“There is a huge difference between the top 10 and where we rank here in 28, but the trend is in the right direction,” said Greg Kwong, CBRE'S regional managing director for Alberta.
“If we take a specific section of the tech business, business related to clean energy ... we can certainly become a top 10 city.”
The report highlights one clear advantage for Calgary and Edmonton: low costs.
CBRE found the annual labour and real estate expenditures for a typical 500-person tech firm (leasing a 75,000-square-foot office) would range from a high of US$68 million in red-hot Silicon Valley down to $31 million in Waterloo, Ont.
In Calgary, the cost was US$35.9 million, placing the city 43rd overall, while Edmonton came in two spots below at $33.9 million.
However, the study underscores another perennial concern: a shortage of skilled labour in some key technology occupations.
The report noted the total number of computer engineering degrees being completed in Calgary sat at 298, up 63 per cent between 2015-19, but “other tech engineering” degrees fell by 10 per cent during that time.
“You can do all of the analysis and all the cost-benefit (studies) you need to do to justify a move here, but if you don't have anyone to work for you, then you're not going to grow the business,” said Kwong.
Post-secondary officials are striving to address this issue, with institutions adding training spots, such as the creation of SAIT'S School for Advanced Digital Technology.
“The gap between the existing talent and where you need to get to is actually not that big,” said Jim Gibson, the school's dean and a veteran of Calgary's technology community.
“We've been saying all along that (with) the energy folks and people with deep experience in data, and a very talented engineering group, it's not like you need a four-year degree to reimagine yourself. We are actually not that far away.”
Gibson said the city's tech sector has momentum and the development of marquee companies will help Calgary along the growth track.
Lopez sees increased economic diversification ahead for the city, as more technology firms sprout and take off in the community.
And while there is competition for talented industry workers, success helps to breed further success.
“It's a flywheel effect. So as one company starts to generate the experience that employees need to manage high-growth businesses, that then translates into other companies being able to (draw) on that experience,” Lopez added.
“It all comes down to the talent that you can bring forth, and start to get the flywheel to spin.”