Province’s tech sector contributed nearly $5B to GDP in 2018: Report
Advocates of Saskatchewan’s technology sector say the numbers are finally in to prove the industry has a substantial effect on the province’s economy.
A recent report commissioned by Sask. Interactive found the tech sector contributed $4.7 billion to Saskatchewan’s gross domestic product (GDP) in 2018, which represents 5.6 per cent of the province’s total GDP.
More than 5,000 tech companies are based in the province, employing 52,300 people. The report found Saskatchewan’s core tech sector has been growing rapidly, expanding 38 per cent since 2010 and 19 per cent since 2015.
Aaron Genest, the chair of the advocacy organization Sask Tech, said $1 of every $20 earned in the province is earned by the tech industry.
“That’s pretty significant. I would consider that a big deal,” Genest said during a recent interview.
The main impetus for the report was to measure the tech sector for investment and support from the provincial government, he said.
The provincial government’s growth plan for the next decade involves tripling the growth of tech sector.
Genest said this study now gives the government a baseline.
“They’ve had an intuition for some time that it was an important part of the provincial economy and that it was growing quickly. This helps quantify that.”
Tina Beaudry-mellor, the minister responsible for Innovation Saskatchewan, said the data will be useful to the province as it tries to keep the tech sector in a competitive position with Alberta and Manitoba.
“Everybody is using tech in some fashion right now and looking at ways to pivot existing business models, and so there’s tremendous, tremendous opportunity for our tech sector,” Beaudry-mellor said.
Genest said one thing in the report that surprised him was the number of small tech businesses in the province. The average number of staff per company is 13, but more than half have no employees at all. Genest described these companies as likely being consultancies and private contractors.
The average annual income of tech workers in the province is $76,000. That may not be as high as other tech hubs such as San Francisco, but Saskatchewan’s lower cost of living helps workers retain as much disposable income as their Silicon Valley counterparts.
The biggest challenge is talent. The top two concerns voiced by respondents to a survey cited in the report mentioned access to senior and intermediate labour. The report found the province’s small market size pushed workers into becoming a “jack of all trades” rather than specializing.
David Gerhard, head of the University of Regina’s computer science department, said it isn’t shocking news that finding experienced talent is a problem. Gerhard said the gap can be attributed to a dip in the number of people studying computer science in the early 2000s.
“The universities really need to work with the government to figure out how to supply this in-demand workforce in the future,” Gerhard said.
The big unknown now is the ramifications of the COVID-19 pandemic. Genest said some companies will contract and others will grow, but having data on where Saskatchewan stood before the pandemic hit will still be useful.
“This is excellent and essential data, in fact, for being able to develop good policy related to what’s going to be the result of the effects of COVID.”