BC’s technology council pushing for more venture capital investment, better branding

The British Columbia government is being urged to brand the province as a world leader in environmentally benign or enhancing technologies and expand the supply and flexibility of venture capital, as part of the second quarterly report from the new Premier’s Technology Council (PTC). The report was issued earlier this month and its 45 recommendations are intended to provide the ingredients for transforming BC into one of the world’s top 10 technology centres by 2006. The PTC has committed to issue reports on a quarterly basis.

The industry-dominated PTC has already had success with the Liberal government of Gordon Campbell. It’s first report recommended doubling the number of graduates in key technology-related disciplines and establishing an public-private sector endowment to support 20 research chairs. Both have been adopted and announced.

Now it is focusing on image, financing, acceleration of broadband access and improved government procurement practices. The 140-page report was produced by four task groups assigned to generate positions on these areas (see box).

In the area of marketing, the report contends that the current Super Natural branding slogan for the province is inappropriate for the technology sector, and has been tarnished by environmentalists seeking to undermine international markets for BC resource products. Instead, PTC supports the current process initiated by the Minister of Competition, Science and Enterprise (MCSE) to promote key technology sectors. It suggests that BC should be portrayed as an environmentally friendly jurisdiction, beginning with the wireless, biotechnology, new media and alternative energy sectors before expanding to all industrial sectors.

“This image can be used to convey two important narratives: 1) that we are engaged in ecologically sustainable industrial practices, and 2) that we are world leaders in technology that enhances productivity,” states the report. The MCSE recently issued a request for proposals to develop a provincial branding and marketing strategy to attract new investment and maintain markets in specific sectors.

VENTURE CAPITAL

More concrete are PTC proposals for increased venture capital (VC) investment. The Council says VC is in generally short supply, but the situation is especially dire for early-stage technology firms. It offers a series of recommendations to both increase VC supply and extend “conditions” currently offered to labour sponsored venture capital corporations (LSVCCs) to existing VC firms.

“There’s only one labour sponsored fund in BC - the Working Opportunity Fund - and that makes it a monopoly. That’s not fair,” says Paul Lee PTC co-chair and senior VP research at Electronic Arts Inc. “Government should not be picking winners.”

To stimulate early-stage technology investment, the Industry Growth & Development task group chaired by Norm Francis recommends:

* expanding the tax credit budget legislated under the Small Business Venture Capital (SBVC) Act from $50 million to $100 million annually;

* allowing VC firms under the SBVC act to invest directly without the registration of a separate VC corporation;

* increase the amount of capital a business may receive under the program to more than the existing limit of $3 million;

* increase the employee threshold limit for small business from 75 to 150; and, allow for multi-tranche investments based on reaching established milestones.

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In the next quarter, the Industry Growth & Development task group will be working with the BC Securities Commission on its initiative, New Economy and Adoption of Technologies. It will investigate the use of stock options and taxation of capital gains as a way to attract and retain skilled employees, and focus on “key drivers” for growing technology firms outside the Vancouver area.

“The Council has a large number of very strong individuals and they’ve done a lot of work. It’s takes a ton of time and you don’t usually expect this amount of dedication,” says Lee, who also sat on the disbanded technology council of the previous NDP government. “We’re independent from government so we’re free to put in our reports what makes the most sense and the government is free to reject the recommendations. So far, they’ve reacted quite readily to our key recommendations.

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