Ottawa a Tech Hub? What you said….

ryanpaulgibson
Aug 25, 2016 · 6 min read

STOP!!!

Before scrolling further…if you haven’t read this:

“OTTAWA IS A TECH HUB — DEAL WITH IT.”

Please do. I’ll wait here.

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Thanks.

I think I struck a nerve with this piece. The reactions were swift and abundant. The collective theme underpinning every comment,

“Finally, somebody said it!!!!”

You have to understand, the prominence of Ottawa’s tech community is a conversation debated in coffee joints, bars and Shawarma shops throughout the city. Tech has played a large role in shaping the city’s recent past, so people often try to envision what the future holds.

Let’s run through some of the feedback. First up, Farhad Khan, founder of Flyta:

Great article Ryan! I have lived the rise and fall of the tech giants in Ottawa, having worked at JDS, Corel and finally living through the bankruptcy of Nortel. There is tremendous talent here doing some of the coolest stuff. Ottawa does NOT get its fair share of recognition! I hope your article balances the scale a bit! =)

This was the prevailing sentiment. A simple high-five to everyone working hard. Steve Borza, the president of Bluink had this to say:

Good analysis. It should be noted that the Nortel divisions did not disappear, and are alive and well in Ottawa under the names of the acquirers. Ciena, Ericsson, Avaya have all done well with the teams and business that they bought. In many cases they have grown their staff as Ottawa is a good place for talent. Huawei, Apple, and others have moved in to access this world class talent as well.
Also, your SRED analysis is only correct for foreign or public companies… The actual rate for a CCPC (Canadian Controled Private corp.) with under $3M in R&D spend is 35% federal refundable credit… Plus 55% overhead on the salary. Actual cost of $110K R&D salary = $39,243.

First off, Apple in Ottawa? (That would be cool...). Thanks Steve for adding to the narrative that Ottawa technology & talent is thriving today. Also fun fact: looks like SRED is even better for Canadian companies looking to scale up. Next up Les Horn, a co-founder of Corel, connected on Linkedin:

I sent the following to Compass: The concept of identifying the leading technology cities in the world is to be applauded, well done! My problem is the apparent overlooking of the capital city of Canada. Ottawa represents an amazing technology savvy hub of technology companies which, with all their investments, IPOs and leading edge personnel, needs recognition by your organization. After Nortel collapsed the bulk of the personnel let go started to reinvent themselves as startups and they are making an impact. Please review our stats and add us to your list, where we rightly belong. Regards Les

Y-E-S!!!!! Thanks Les for reaching out to Compass. Hopefully, others have done the same, so the firm takes a serious look at Ottawa in their next report.

Another Linkedin comment from Rob Eady:

What’s interesting is that charts / lists / articles that don’t include Ottawa in their map can have significant influence to companies and those thinking about locating/relocating to our city based on the ability to find good tech brains. It should be noted, that if you look at what foreign firms have either bought up or located here over the years — the list is HUGE. Going back to the 70’s Kanata and Nepean were Canada’s tech centres. Sure names have changed and mergers have occurred (Newbridge => Alcatel, Computing Devices Canada => General Dynamics, Cognos => IBM) — but it’s all still here.

Next…

‘Nuff said. Moving on….

It’s hard NOT to find a life in Ottawa that was impacted by Nortel in some way. Their old campus (pictured above) is a constant reminder of the dramatic rise and fall of a great company. The irony of using their past HQ, in an article cheerleading the 613 as a tech hub, was not lost on some:

But it wasn’t all sunshine and BeaverTails. Many people shared criticisms as well; from Neil McEvoy:

So in conclusion, Ottawa used to be great when Nortel was around, and if you massage numbers to suit your purpose then Ottawa would make it on to these lists, but not if you don’t.

I understand part of Neil’s position. Statistics can be presented in a variety of formats. I did perform some basic math but the goal was to try and match the way Compass breaks down their numbers. The rest of the data is straight up (like IPO’s, size of tech workforce, etc). And as I stated in the article, “I’m making the case that Ottawa should be part of the global tech hub conversation and a deeper dive by firms like Compass is warranted.”

And BTW: “Nortel gone = Ottawa tech gone” is exactly the false equivalency I was addressing in the piece. In other words, nope.

From reddit:

I can’t argue that Ottawa is on par with those other cities; I even mentioned that in the article. However, I DO think it’s on par with some of the smaller cities in the world that focus on tech. And when you consider that there are upwards of 4000 to 4500 cities on earth, even if Ottawa cracks the top 20 of tech, that is saying something.

Finally….

I made a mistake. So I need to address it.

Jacob Serebrin, a freelance technology reporter (who has covered some great stories about Ottawa tech) made this observation:

uh oh.

Specifically, it’s this slide he’s referring too:

Source: Pitchbook

This graph shows the amount of venture capital that’s been invested in Information Technology (IT) companies. Although the slide makes the distinction between all tech and IT in the title; I failed to make that distinction in the body of the piece.

Honestly, I overlooked the fact that there was one. The Market Intelligence team at Invest Ottawa put together the data and kindly confirmed how I had erred. Here’s the breakdown of the sectors our data looked at:

The rationale for focusing on Information Technology (IT)? It aligns with the strategy of “focus on your strengths” (which I touched on in the article). So when we (Invest Ottawa) are touting the economic benefits of the 613 across the globe, we target people who play well in that space.

Need top talent and infrastructure that supports and scales software?

Ottawa!

Need top talent and infrastructure that supports a pharmaceutical plant?

Probably Somebody Else!

But all of that is no excuse for making a mistake. I thanked Jacob for pointing out the error:

For what it’s worth here is the total VC money invested in Canadian tech companies over the last few years:

source: Pitchbook

So taking everything into account, Ottawa is definitely trailing Toronto, Vancouver and Montreal in volume, not too far off in median and ahead of tech darling Waterloo. And keep in mind Ottawa is on par with number of exits and also leads Canada in tech IPO’s. Two weeks ago I wrote,

“Is Ottawa at the top? Nope. Is there a significant amount of capital being invested into Ottawa tech companies? Yep.”


Listen….

I’m not saying Ottawa is king of the hill or will ever be.

I’m simply saying it deserves it’s due when talking about cities that are strong in tech.

Thanks again for reading and sharing folks. Means a lot.

(UPDATE: read my third post in this series — Ottawa: Find a Job & Afford to Live!)

ryanpaulgibson

Written by

Marketing @Giatec. Sometimes filmmaker. Sarcasm Volcano. Dad Jokes.