Despite a global economic recession, tech companies in the Waterloo, Ont. region have grown by 21 per cent over the last two years as start-ups focused on digital media lead the charge, according to a new Communitech Technology Association Inc. report.
The report indicates the number of tech companies in the region has now surpassed 700 organizations, which is up from the 550 companies Communitech found in its 2008 report. About 50 per cent of the 700 companies are operating in the “digital media” domain, the report found.
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“In general, digital media and mobility is that next step for ICT, in the sense that consumers want more mobile access to their content,” said Avvey Peters, vice-president of operations at Communitech. The emergence of smart phones and tablet PCs, such as the iPad, have added to this demand, she said.
The report also found that while four out of the five top 50 Canadian mergers and acquisition deals were with Waterloo-based companies, half of the region’s 700 companies actually have between one and five employees.
The Waterloo, Ont.-based organization — which aims to drive growth and success in what it calls Canada’s “top innovation centre” — compiles a report on the Waterloo region every two years. It collects its data by surveying all the tech companies in Waterloo and Guleph, Ont. on their industry outlook, as well as studying the regional outlooks from Canadian research and financial organizations.
“Generally speaking, they are optimistic about the industry and their outlook,” Peters said. Despite the slowing economy, the companies are still growing, still hiring and still selling products, she added.
The fact that the majority of the region’s tech companies are firmly in the SMB space is also a reason to be optimistic, Peters said. She added that increasing the number of early-stage companies is the only way to create bigger players in the region.
This goal is also shared by a newly formed Silicon Valley-based non-profit group, comprised of Canadian tech executives and venture capitalists. The C100 Association wants to erase Canada’s reputation as a country full of great start-ups that fail to commercialize their products.
The organization is comprised of Canadian CEOs, start-up entrepreneurs and venture capital investors working in Silicon Valley. Members include executives at Apple Inc., Cisco Systems Inc., eBay Inc., Google Inc., Microsoft Corp., Oracle Corp., Electronic Arts Inc. and Facebook Inc. It also features investors representing more than $8 billion in capital.
Chris Albinson, the managing director of Menlo Park, Calif.-based Panorama Capital LLC and one of the founders of C100, said the organization will connect the country’s ex-pat community with entrepreneurs back home. The goal of C100 is to emulate the way the Indian and Israeli communities working in Northern California give back to aspiring tech start-ups in their homelands, he added.
“We thought there was 150,000 Canadians working in Silicon Valley, but really we found there are 300,000 in Silicon Valley,” he said.
Peters agreed with the C100 Association’s assessment that Canadian companies do not carry a “brand of success” in Silicon Valley.
“We don’t generally tell our success stories as well as we could,” she said. Communitech, C100 and other related initiatives can change this trend, Peters said.
“We do this state of the industry report to shine a light on the good,” she added.
According to the Communitech report, the Waterloo region continues to have 2,000 tech job openings and currently has 30,000 people employed in tech companies.
