BCBusiness

68 BCBUSINESS NOVEMBER 2017 COURTESY SLACK dollars, he points out. "Our export is skilled work- ers," Vancouver-based Carlson says. "These Ameri- can dollars are buying Canadian talent at a 20 per cent discount right now." But there are reasons to believe tech's urban invasion will be permanent, and transformative to the city landscape. In 2011, venture capitalist Marc Andreessen wrote a much-shared op-ed column in the Wall Street Journal that expounded his view of "Why software is eating the world." IT developers were devising new ways to deliver goods and ser- vices to customers that would see them take over swaths of the economy, Andreessen argued, using the examples of Amazon, NetŒix and Apple's iTunes. (Uber wasn't even around yet.) Instead of working in factories, in the future people will increasingly work in o'ces developing the software to run the robots that do the factory jobs. Six years later, Andreessen's scenario appears to be playing out. Conventional revenue "gures tend to underestimate the impact of the technolo•y industry, partly because many players are in the pre- commercialization stage. But The State of Canada's Tech Sector, 2016 by the Brook–ield Institute, a Toronto-based think tank, uses some di—erent meth- odolo•y to show that technolo•y is a far greater force in the Canadian economy than widely thought. Tech represents $117 billion in gross domestic product, or 7.1 per cent of the overall economy, the report states, putting it "fth among all industries—after real estate, manufacturing, mining/oil and gas, and construc- tion. Its 71,000 "rms (6.1 per cent of all companies) employ 864,000 people (5.6 per cent of the national labour force) and account for the lion's share of pri- vate sector research and development, at $9.1 bil- lion. In Vancouver and Halifax, tech is second only to retail trade as a source of employment. What Andreessen and other heralds of the tech takeover didn't anticipate, or were less inter- ested in, was just where this new post-industrial workforce would want to be located. And make no mistake, some notable non-technolo•y companies— McDonald's Corp. and Kraft Heinz Co. in Chicago, General Electric Co. in Boston—have also been making the trek downtown from the burbs. North American downtowns are generally cleaner, safer and more appealing to all kinds of enterprises and their workers than they were a few decades ago. But these other industries don't have the same poten- tial as technolo•y to transform the urban landscape, for a couple of reasons. First, technolo•y was never downtown in a big way before now. IBM Corp. was founded in upstate New York; Hewlett-Packard Co., in a Palo Alto garage. So the industry's incursion into downtown o'ce space is unprecedented. Second, where companies in other industries might just locate head-of–ice functions such as "nance, legal and marketing in their highrise urban HQs, tech companies bring the people who actually create the core product or service. Amazon expects to have 50,000 employees in Seattle by 2026—more than aerospace titan Boeing Co., long the metropoli- tan region's leading employer, ever had in suburban Everett, Washington. Indeed, it foresees a day when it will outgrow the city, Œoating a plan to establish a second headquarters in another North American city. It's as if North America's industrial heartland is increasingly accessed by elevator. "The tech sector is becoming ever more critical by the day to the Canadian o'ce market, with tech- nolo•y "rms accounting for 16.1 per cent of all major o'ce lease deals in Canada last year," said Raymond Wong, head of research at CBRE Canada, follow- ing the November 2016 release of a report on the industry by the commercial real estate "rm. "This percentage increases markedly in our larger urban areas—for example, tech accounted for 43 per cent of all leases in Ottawa last year—and it's a trend we only see growing in the years to come." In fact, non-technolo•y companies are choos- ing to locate their technolo•y-related functions downtown, too. Boeing recently opted to set up a 50-person analytics lab in Yaletown rather than at its existing operations centre at Vancouver Inter- national Airport. Fast-food giant Subway IP Inc. recently bought Avanti Commerce Inc., an online ordering specialist in downtown Vancouver, and plans to make the out"t a hub for its 150-employee digital group. As University of California, Irvine, business professor Vijay Gurbaxani wrote last year in the Harvard Business Review, "the current¬busi- ness environment requires all leaders to view their companies as software businesses—and think like software executives." A less diverse downtown? As for the tech sector itself, cities are now attract- ing and retaining companies at every stage of "The tech sector is becoming ever more critical by the day to the Canadian oce market, with technology firms accounting for 16.1 per cent of all major oce lease deals in Canada last year" — Raymond Wong, CBRE Canada COMFORT ZONE Slack's Hamilton Street office features exposed bricks and beams, plus a wall clad in dried moss

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