Atlantic Canada’s tech sector approaching critical mass for success

Posted on November 21, 2019 | Terri Coles | 0 Comments

“There’s a recognition here that we’re as good as anywhere in the world,” says Paul Preston CEO of N.L.’s tech industry association.

When Michael Noseworthy decided to return home to Newfoundland and Labrador from Ottawa, he made a simultaneous decision to replicate the value of the tech networking groups he’d recently joined in the country’s capital.

Once back in St. John’s, Noseworthy and his friend Scott Stevenson co-founded NDev, a meetup with more than 500 members that runs an active Slack channel and hosts monthly talks and networking events for a regular crew of attendees.

“When I got home I said, let’s start something up with the mission of creating a space and a small community of software developers who can get together, share ideas, and get outside of the office,” said Noseworthy, a software engineer now working in St. John’s.

Michael Noseworthy is a co-founder of NDev.

The existence of an active community of software developers in a province more often associated with fishing and offshore oil production might come as a surprise. In fact, the tech sector is quickly growing and diversifying not just in Newfoundland and Labrador, but across Atlantic Canada, bringing in more than $6 billion in revenues across the four provinces in 2017, according to a recent report from the Atlantic Provinces Economic Council.

From companies with hundreds of employees to startups, sole proprietors, and remote workers, those in the sector say the opportunities are here. “If you’ve got a good internet connection and you’ve got power and you’ve got a computer… you can work anywhere,” said Stevenson, the chief technology officer and co-founder of Rally, which applies automation to legal documents. 

MORE: N.L. tech startups attract Silicon Valley attention

For tech workers, ‘anywhere’ is increasingly in Atlantic Canada.

The $6.13 billion in revenue that the Atlantic Canada tech and innovation sector brings in comes from more than 460 digital technology firms and about 43,000 employees in related occupations, the APEC report found. In Prince Edward Island and Newfoundland and Labrador, the rate of growth for that labour force between 2011 and 2016 was in the double digits.

The tech and innovation sector is growing not just here, but globally and workers with related skills are needed not just in that sector but across entire economies. Atlantic Canada’s secret ingredient might be a philosophy that has underpinned the region’s way of life for centuries: the idea that a rising tide lifts all boats.

“There’s a recognition here, and you can feel it, you can almost taste it when you talk to tech companies,” said Paul Preston, chief executive officer at the Newfoundland and Labrador Association of Technology and Innovation, a not-for-profit industry association representing the province’s advanced technology sector. “There’s a recognition here that we’re as good as anywhere in the world.”

St. John’s-based entrepreneurs gathered at the offices of tech giant Verafin last month for a series of talks about the importance of failure. (Source: Twitter)

With just two million people spread over four provinces with a land area the size of Spain, Atlantic Canada’s tech sector will never win on size alone. Where it can excel, Preston said, is in innovation and entrepreneurial spirit. Cooperation—from company to company, between companies and the organizations that represent them, and between those organizations across that region—is the key to increasing innovation.

“For us to think we need to compete against each other is ludicrous,” Preston said. “The pie that we’re all going after is out there in the world. More and more it’s not about being here, it’s about how do we go after the world?”

Provinces working together

The Atlantic provinces rank highly for entrepreneurial ambition, Preston said, and the supports available to tech-focused entrepreneurs (through incubators, funding agencies like ACOA, and investors) are good as well.

Many new tech-focused companies in the region find that support at incubators like the Genesis Centre at Memorial University in St. John’s. Its full-service incubation and acceleration services include $20,000 in startup cash. Businesses connect through the Centre—which counts Verafin, Genoa, and recent Y Combinator selection CoLab among its success stories—with a national network of 30 similar innovation hubs.

Genesis has been key for Rally, Stevenson said, as are any of the increasing number of new tech supports showing up across the region to support startups like his.

“We have worked with a lot of different organizations because we’re a small startup and any type of support that we can get is instrumental to our success,” he said. “We wouldn’t be here without [them].”

Scott Stevenson was recently in Silicon Valley, pitching Rally to Y Combinator.

The expansion and increased excitement of the investment community in Atlantic Canada is another important factor in its growth, said Michelle Simms, chief executive officer at Genesis. 

“We’re starting to see that investment community really grow and prosper in this province as well, which really adds to the vibrancy of the community,” Simms said. The landscape now includes not only local players like Killick and Built Ventures, but also investment from elsewhere in Canada and Silicon Valley.

Between the Atlantic provinces, there is cooperation, Preston said. Working groups bring together clusters within the tech sector, like life sciences or information technology, and discussions happen between industry groups, incubators, and funders. The Ocean Supercluster, a pan-Atlantic effort, is a big part of that, he said.

“There are so many more supports here now than there would have been even five years ago,” Simms said. “People who might have been sitting in their basement five years ago with an idea and not knowing where to go with it, now have a place to get out of that basement and explore those ideas and connect with people who are willing to work with them and help them.

Help wanted

Though there is a lot of good news for tech in Atlantic Canada, challenges remain. Talent is a big one, and it’s the primary focus for NATI right now, Preston said. Last year Memorial University and the College of the North Atlantic had just 50 graduates in programs like software development, he said. At the same time, the province has an aging population, high outmigration and modest immigration targets. 

Tech is making headlines: NATI’s Paul Preston is interviewed by NTV. (Source: Twitter).

The numbers vary by province, but population loss affects all of Atlantic Canada and isn’t good news for a growing sector in need of skilled staffers. IT World Canada predicts the entire country will have a major shortage of tech talent in just five years. 

“The tech crunch is going to only get worse and it’s a huge problem for the tech sector,” said Preston.

There are plans in the works to fill that talent gap. NATI is partnering with government and other organizations to expand training programs, an effort Preston expects will include private institutions as well as public colleges and universities.

Jan Mertlik sees the high demand for software developers not just locally but across the country. “I realized that there is an opportunity to create an alternative way of teaching people or introducing people to software development,” Mertlik said.

He plans to soon offer a bootcamp-style class through Get Coding, with a long-term goal of introducing more people to a growing field.

Jan Mertlike, right, accepts the Fail Tale Cup from Florian Villaumé of Memorial University’s Centre for Entrepreneurship at an event held at Verafin this fall. (Source: Twitter)

“The demand for developers is huge,” Mertlik said. “There’s been a lot of venture capital investment done in the city for the past couple of years. And it’s growing too, not just in the city but in Atlantic Canada. In general, there’s huge growth in the tech industry but there’s been no significant growth in students coming out of university.”

Funding is another challenge, said Simms of the Genesis Centre, who pointed to a need for mid-range funding at the angel investor stage. “If you look at the $50,000 to $250,000 gap, I think that’s certainly an area that we’re looking to fill,” she said.

But the flip side of those challenges is potential. 

“Success breeds success,” Simms said. “We know that, we’ve heard that many, many times before.” When people in the region hear about the stars in the sector, she said, others begin to believe they can do it too.

“There is a global, macro opportunity,” said Stevenson. “The more workers we have and the more capital we have to do this, the more of that global opportunity we’re able to seize.”

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