January Month in Review: Alberta’s failure with Amazon provides important learning opportunity

ASCG Month in Review: January 2018

“Not saying we’d fight a bear for you… but we totally would”... that was the tagline emanating from the Calgary Economic Development’s pitch to Amazon, a pitch where the company spent over $500,000 on advertising to attract the Seattle based tech giant. Calgary based the majority of their pitch off having the “highest concentration of head offices in the country, the friendliest tax regime, the most available office space and the highest concentration of young STEM professionals”.

Calgary wasn't the only Albertan city vying for Amazon, Edmonton’s Economic Development Corporation (EEDC) also put forward a proposal to try and land Amazon’s HQ #2. While EEDC was more tight-lipped about the details of their proposal, it’s likely that the city’s research expertise in artificial intelligence and machine learning, plethora of available real estate and high quality post secondary institutions were all mentioned as reasons to choose Edmonton.

Given the effort put forward in both of these proposals, many in Alberta were disappointed to hear that neither city was able to make the new shortlist put forward by Amazon. When reflecting back on this experience however, both of Alberta’s major cities can learn a lot about their own deficiencies in attracting big technology companies. We’ve come up with four key lessons Alberta can learn from this experience to improve its technology ecosystem moving forward.

  1. Commercializing our expertise: According to University of Calgary provost Dru Marshall, both the University of Calgary and the University of Alberta possess strong research credentials in many emerging technology fields. This includes areas such as  data-visualization, human-computer interaction and information security for the University of Calgary and artificial intelligence for the University of Alberta”.  While research strength is important, Calgary technology entrepreneur Wayne Sim comments that commercialization is where Canadians suffer. “... Canada is very innovative. What Canada is not good at, it's not really good at the commercialization of that innovation. If you look … at mid-cap companies in the technology sector between $200 million and $400 million … it's a desert.” Moving forward,  Calgary and Edmonton alike would benefit from public private partnerships that help commercialize existing research expertise. 

  2. Educating more software engineers and developers: The University of Calgary puts forward less than 200 computer science and math graduates each year, while that number is closer to 300 at the University of Alberta. These numbers stand in dramatic contrast to BC for example, where the government has recently committed to 2900 tech related spaces that should lead to at least 1,000 more graduates per year by 2023. If Alberta is serious about improving its technology ecosystem, our universities must educate more students in computer science and engineering related fields. 

  3. Improved infrastructure considerations: When detailing what they were looking for in the city they chose, one key criteria for Amazon was infrastructure.  Don Iveson was quick to mention this in an interview, stating that “They were specifying mass transit for labour mobility and they were specifying even bike lanes as options for their talent to get to work." Amazon also mentioned business travel as being an important factor, citing direct flights to New York and Washington DC as important considerations. This is one area where Calgary and Edmonton both fell short, as both cities offered no direct flights to Washington DC, while only Calgary offered a direct flight to New York. In addition, premier Notley went onto mention that the lack of investment in mass public transit across Alberta played a role in hampering the two cities pitches. When taken together, making strategic investments in transit infrastructure, and providing direct flights to key markets are two ways Alberta can improve its technology ecosystem. 

  4. Organic growth of technology firms: Grant Mclarnon, the CEO of Calgary based tech firm Adoxio found that "the technology industry has often found itself competing for talent with the oil and gas sector... a  difficult task considering that industry has paid people exceptionally well for a very long time. Even with a downturn in the oil and gas industry, these laid off workers aren't necessarily suited for high tech work." In an oil and gas heavy province, growing a thriving technology ecosystem has been difficult for our two major cities. This is a huge barrier for big companies like Amazon, who entrepreneur Wayne Sim says "need an ecosystem to support a company like Amazon." He goes on to note "It's not like they're going to take and hire 50,000 new graduates...[you need] smaller companies that are going to take people out of those educational systems and move from two-year developers to five-year developers or seven-year developers". In order to attract the biggest technology companies in the world, Alberta needs to show it has an existing ecosystem, filled with technology talent at various companies. 

Although many are disappointed by Alberta's inability to make Amazon's short list, we choose to see it a different way. By participating in this pitch, both Calgary and Edmonton have seen how they match up to other cities across North America. From here, both cities can take these learnings and work on their shortcomings to prepare for the economy of tomorrow.