Information and communications technology could be a bigger driver of the region’s economy, but the companies with all the smart ideas need to collaborate to compete

There are almost 2,000 ICT (information and communications technology) companies in Atlantic Canada, and three-quarters of those have fewer than 10 employees. Most of these companies focus on regional business opportunities—known to some insiders as “domestic clients of first resort”—because of the belief they’re too small to compete on the world stage. What the industry needs to grow is more people and more critical mass.

Of the 1,870 ICT companies headquartered in the region, only 120 or so—each boasting at least 50 employees—are actively selling technology solutions to customers all over the world. And yes, some of the region’s smaller companies are doing this too. But when it comes to working successfully with multinational corporations, the question isn’t whether the developers are big enough or capable enough to do the job, it’s whether they can scale up operations quickly if the customer decides to apply the technology globally.

“What we need to do is get four or five of these businesses with complementary expertise to come together and create some export-oriented joint ventures,” says Jason Powell, the president and chair of the Information Technology Industry Alliance of Nova Scotia (ITANS). “Then you would have a 200-person workforce that’s more attractive to Fortune 500 companies. Let’s compete locally but also create partnerships that can package five things and export them as one.”

Powell’s idea makes sense and involves a fundamental challenge. “Most companies in the region don’t know each other or what they do,” says Paul Dubé, the CEO of the Newfoundland and Labrador Association of Technology Industries (NATI). “Something has to happen that brings industry players together into one place so they can interact and learn about each other and broaden their scope.” Most export-oriented companies, he cautions, are still too risk-averse to expand—especially in a tougher economic climate.

The solution: preparing companies for more partnership and strategic alliance opportunities. That’s the focus in New Brunswick, the only province in the region without its own IT association. For the past three years, ICT firms and their supporting agencies from across the province have been gathering at an event called Think NB to exhibit expertise, prospect for business, and explore new partnerships with each other. It is the only ICT-industry event of its kind in Atlantic Canada. “The first year was a real eye-opener for us,” says the director of marketing for Computer Generated Solutions Canada, Stephen Brooks, who chairs the event. “It was shocking to see how much innovation was going on that other companies in the province didn’t even know existed.”

The second year brought back many of the same people, with stories about how Think NB led some of them to do new business with each other. “Now we’re seeing small companies turning into medium and large ones that didn’t think they could ever get there,” says Brooks. “Take Spielo, who primarily does business with Atlantic Lottery Corporation. Think NB opened them up to new business relationships.”

Spielo now does business with several New Brunswick-based ICT firms such as PQA, Nanoptix and Syntact. “Think NB provides us with a great opportunity to meet new potential ICT suppliers,” says David Small, technical program manager at Spielo, “suppliers that we would otherwise not be aware of.”

With more than 1,000 attendees expected at this year’s event in October at the Saint John Trade & Convention Centre, the organizers are opening it to all of Atlantic Canada and Maine, although all the exhibitors will be New Brunswick-based. The expansion should be a good thing for New Brunswick, considering the province has lost 6% of its ICT firms over the past five years (Newfoundland and Labrador, Nova Scotia, and Prince Edward Island have experienced gains of 13%, 19%, and 24%, respectively).  Since 2003 Atlantic Canada’s ICT firms have together grown by 12%, a little more than half of the national average of 19%, according to Statistics Canada.

Emad Rizkalla, co-founder of St. John’s-based Bluedrop Performance Learning, says the industry needs more events such as Think NB so smaller companies can unite to figure out how they can add value to each other’s work and sell it elsewhere. “The industry historically hasn’t been as export oriented,” says Rizkalla. “There are great companies here with better technology than what some of the best international companies could ever come up with.”

The next generation of Atlantic Canadians also needs to be educated about the opportunities that careers in the ICT sector can offer for smart creative graduates. If the industry is to grow, the number of trained individuals sustaining it must multiply as well. Currently, that’s not happening. “There’s not enough talent, and enrolment in computer science programs has declined steadily since the dot-com bust,” says NATI’s Dubé. “There just aren’t enough graduates coming into the industry.” He isn’t the only one to blame low enrolment on the dot-com bust; it’s a sentiment repeated by ICT professionals everywhere. Others say it has more to do with the industry’s image: the idea that software development is for geeks.

“A serious problem is that high school students don’t get enough information about what an ICT job really is and the success they can achieve with one,” says Ali Ghorbani, the dean of computer science at the University of New Brunswick. “Today’s high school curriculum isn’t at a level that creates excitement; students already know how to do most of the things on a computer that they’re learning in school.” Ghorbani believes both industry and government need to determine how many graduates will be needed in the future, then help universities plan for it. “We need more industry participation all over Atlantic Canada. We have only one company, PQA, that awards scholarships at UNB, three $3,000 ones per year.”

If the ICT industry is to lead Atlantic Canada into a new era of economic prosperity, companies will have to take on some risk in the marketplace. “Sometimes I think our laid-back lifestyle works against us,” says Rizkalla. “It makes a lot of companies do just what they can to make a good living instead of having the ambition to grow.”

Isn’t that what the economic-development agencies have been touting for years about doing business on the East Coast—a more relaxed lifestyle and lower cost of living? Some industry leaders are unimpressed. “It’s the only place I’ve worked, in this industry, where the parking lots are pretty much empty by 5:15,” says Stephen Brooks.

Is it the pressure of big-city competition and living expenses that pushes innovation and growth? Or the right people in the right place at the right time? One thing’s for sure: the players need to come together in order to get it together.