Remarkable.
The Okanagan technology sector has surged ahead to be the Valley's largest and most lucrative economic engine at an enormous $4.98 billion annually.
Since the massive number was calculated last year, let's assume we can now round it up and label it an impressive $5 billion.
It's been a meteoric rise for the Okanagan tech industry.
Particularly over the past decade, the Okanagan has attracted tech entrepreneurs and companies who want the Valley's beauty and recreational lifestyle for themselves and their employees with a cost of living less than other big tech hubs in Vancouver and California's Silicon Valley.
The Okanagan has also developed a reputation for being attractive to the young with 46% of tech employees under the age of 35 and graduates from Okanagan College and UBC Okanagan sticking around for jobs and the desirable lifestyle.
As a result, the Okanagan has quickly evolved into one of Canada's prime tech hubs.
The last two official studies to peg the sector's economic impact were $1.02 billion in 2014 and $1.67 billion in 2018 and then a 2021 estimate of $2.5 billion.
While it's not directly comparing apples to apples, to put tech's wallop into perspective, it has twice the economic impact of Kelowna's construction sector, which in 2022 was $3.9 billion, and tourism's $2.1 billion.
While we don't have exact numbers, the next biggest sectors are likely retail-wholesale-trade and agriculture-and-wine.
Accelerate Okanagan is the non-profit organization that supports the tech sector and commissions accounting and consulting firm KPMG to do the economic impact study.
"The report aligns with BC Stats framework to ensure that the insights are comprehensive and provide a clear picture of the sector's true impact," said Accelerate Okanagan CEO Brea Lake.
"In this report, we took a closer look at the different regions within the Okanagan as well as the emerging subsectors of the tech industry so we could all better understand what our innovation ecosystem really looks like."
As such, software as a service (delivered via the cloud) is identified as making up 16% of the Okanagan tech industry, life sciences 11%, artificial intelligence 9%, advanced manufacturing 8%, cleantech 5%, gaming and animation 4%, aerospace and aviation 3% and agritech 3%
The $4.98 billion total economic impact is broken down as $2.92 billion direct (what the tech sector buys and spends to generate sales and revenue), $687 million indirect (what local suppliers have to spend to service tech companies) and $1.37 billion induced (the wages that workers in the direct and indirect companies spend in the local economy).
Some of the key 2023 metrics identified in the study are 787 tech companies in the Okanagan paying $3.16 billion in salaries and wages (before income taxes) and 32,645 jobs supported.
The tech sector grew right through COVID and continues to flourish because it produces critical products and services that other businesses rely on to operate and grow.
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"Technology is the backbone of modern economies," stated Laurel Douglas, CEO of Economic Truct of the Southern Interior.
"It helps drive productivity, increase competitiveness and accelerate economic growth. We are committed to working with our partners to foster support and build capacity for this key sector in the Okanagan."
It's not all sunshine and roses (and money) in the tech sector.
While a lower cost of living compared to Vancouver and Silicon Valley was initially an advantage for the Okanagan tech industry, 70% of companies now cite cost of living as a challenge in attracting and retaining workers.
Other challenges include travel costs, distance to clients, access to capital, access to markets or customers and access to technical talent.
Thus said, the future of the tech sector locally is bright with 65% of companies planning to hire more workers in the coming year.
