Odds & ends

I have a serious question for the IT folks out there. I would really like their assessment of the IT industry in New Brunswick. It seems to me there are two distinct realities here and it’s just my impression. All of the data on the industry that I have seen – employment, bankruptcies, etc. shows that NB has a very limited IT industry. There may be 20-25 bonafide firms with 10 or more employees – across the entire province and may be less than 10 that have 50 or more employees. I think there may be a couple of thousand IT professionals in government and industry positions but the core IT industry – animation, software development, eLearning Internet apps, etc. – it seems to me is very limited. On the other hand, we have KIRA and the language coming out of that organization is a dynamic and vibrant industry that is on the leading edge in Canada. This despite the fact that 50% of their SME winners since the award show was launched are now bankrupt.

I am not being cynical or sarcastic here. This is a genuine question. Please let me know if you think that New Brunswick has a growing and dynamic IT industry and give some examples (not the usual FatKat, Whitehill, Radian6, etc. – I think we all know the 7-8 names that are constantly used).

Thanks.

On another note, I see that Lisa Keenan just raked biofuels over the coals (so to speak) in her column on Friday. She says: “It’s a Faustian bargain and its time we stopped. Happy farmers are one thing, starving children another. It’s time to get off the biofuel carousel, before more damage is done.”

It looks like NB Tories (at least Keenan) are at odds with their federal colleagues who are committed to continuing the biofuels from corn play. The minister in charge gave a vigorous defense of biofuels on CBC’s The House last week.

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0 Responses to Odds & ends

  1. mikel says:

    I have a sister who regularly bounces around the IT world in NB, she is currently unemployed by choice because of the high work load and the fact her company refused to hire people for her ‘team’-she was paid quite well. For obvious reasons that’s all I’ll say about THAT (I may have to go back to posting anonymously-I always seem to have a sibling looking for work). Although that pretty much says it all.

    Political parties aren’t stupid. Lisa knows damn well that kind of rhetoric sounds good to a percentage of the population. And its useful because it has ZERO to do with NB. I can’t find a single mention of biofuels. There used to be a guy at these sites regularly touting biofuels, I doubt he’d have the same opinion today.

    NB is a strange province, with only two parties there has never been the same dynamic as with the federal parties. McKenna was the perfect tory, while Hatfield was the perfect liberal. Today, well, I’ll float my usual line that when corporations run the show then ideology means absolutely nothing.

    Irving likes that kind of talk because it makes them ‘seem’ nice. For those who don’t check out other blogs, over at Spinks blog, the guest blogger talks about the Irving ‘what if’ commercial where the company tries to take credit for policies to help whales, while at the same time challenging the migratory birds act so that they can kill as many herons as they want.

    Political parties operate the same way. Biofuels are getting ‘raked over the coals’ because people are paying more for their food. Of course its not that simple, the globalization of the food source and the weather has more to do with it, but in politics you don’t dwell too much on specifics. What it comes down to again is that in politics you are supposed to vote on ‘qualities’ and not on legislation. So as long as Lisa ‘sounds like a caring person’ then that’s the mark to vote by.

    Heaven forbid she talk about rising poverty and cases where NBers are actually starving and submit some proposals for dealing with that.

    It also provides some justification for saying ‘hey, see, we’re SMART because we didn’t start funding biofuels back when everybody was talking about it’. It makes them seem smart for being lackadaisical.

  2. Anonymous says:

    She makes a good point. Food prices are going through the roof everywhere as a direct consequence of their use in biofuels. It has been noted some time back that it actually is not carbon efficient to manufacture this stuff anyway so why proceed with the process? Money for farmers, thats what.
    I find it ironic that the ‘save the forests’ lobby in New Brunswick has not got round to bashing biofuels yet. Maybe they are reading up on it ….. for once.

  3. Anonymous says:

    20 to 25 bonafide firms across the province with 10 or more employees ? Here is a list of almost 20 just in Fredericton.

    radian6, Q1labs, cgi, swiftradius, accreon, PQA, chalk media, caris, skillsoft, xwave, isomni, VE Clinics, unisys, ambir tech, accenture, measurand, redcow, luminultra, bulletproof

  4. Anonymous says:

    Don’t forget that there are a lot of IT companies that don’t rely on government money to survive. It is possible to make it on your own by having a product and making sales. Even the commenter at 10:36 missed a few companies in Fredericton. A lot of them are very successful at serving niche markets, but you don’t hear about them because they aren’t always hitting people up for money.

  5. mikel says:

    Just to reiterate. Food prices are not going up as a direct consequence of biofuels. Last year was a horrible year for wheat, which is the primary food ingredient in most products.

    As well, wheat is pooled, and globalized. China and other asian countries are switching to a ‘north american’ type of wheat based diet, which drives prices up more. Add higher energy prices and it’s a whole mix of things.

    Biofuels isn’t technically the problem, it is the SUBSIDY they get that causes problems and the US highly subsidizes them. However, this is far from money going to farmers, this is all agri-business, the ‘farmer’ on the farm is largely a thing of the past as far as subsidies go.

    The ‘save the forest’ people already have quite enough on their plate, and biofuels have nothing to do with New Brunswick. They haven’t gotten onto this because biofuels hasn’t been brought up in legislation. The government has SAID that its ‘studying’ the issue, but they say that about everything.

    In NB the only biofuels used come from farmers who have gotten off the grain commodity train and are trying something else. If they drop the subsidy then things can change. Increasing research shows that switchgrass and small seed crops may show as much promise as corn.

    But again, what policies is she talking about? Are they going to stop funding? What about the forestry sector? Does ‘stop’ really mean STOP? From her article she sounds like a Bolivian green activist, that would be VERY unusual in politics. I hear another contender is a small woodlot owner around Woodstock-I think some populist comments and background like that could be very interesting in NB.

    On the other hand, maybe she’s just towing the Irving line-leave forestry to the leaseholders, and stay reliant on natural gas and oil.

    Finally, I’d like to echo the above. I’ve heard that in St. John IT workers often rotate around companies, which makes me think the industry is larger than you think. Which makes one wonder why theres no association.

  6. David Campbell says:

    Thanks for the comments. It certainly would be nice to have some kind of directory of IT firms. You can get one (more or less) for Nova Scotia and PEI through their associations. I didn’t realize that some of those firms mentioned had more than 10 employees. I thought at least a few of them were rather small – but again that is not based on anything more than anedcodal information. Maybe if a Saint John poster could list a few companies in that city with mroe than 10 employees and Moncton the same we could start to cobble together a bit of a directory.

  7. Geeks on Ice says:

    Here’s unofficial list of some NB IT companies…

    http://www.scribd.com/doc/2893118/NB-IT-Directory

    To echo Anon, there are companies I run across all the time that are great examples of ICT stories in NB, but they prefer to stay under the radar. Some feel that being put on a pedestal places a target on you that they would just rather avoid.

    David is also right that many of the companies I know of only have 10-20 employees, but I equate this to the fact that the sector had a few years of reletive low startup rates, which is now being reversed thanks to programs like Catalict, Wallace McCain Institute, etc.

    Didn’t Microsoft, HP, IBM and Apple all start in a garage with 2 people?

  8. nbt says:

    Though I don’t agree with the high subsidies involved with the biofuels industry, I think it’s fair to say that turning corn into motor fuel is definitely not the main cause of soaring global food prices.

    Yes, nearly one-third of the maize crop goes into the gas tank, but this doesn’t mean the solution to the food crisis is to completely shut ‘er down.

    On the contrary, biofuels is a step in the right direction in becoming more energy efficient, plus, it may not completely wean us off the dependency of fossil fuels, but it gets the ball rolling in that more engagement and discussions will further result (from this industry) regarding the development of alternate fuel sources.

    Furthermore, wood chips and switchgrass could slowly replace corn as the main ingredient in ethanol, not to mention, waste pulp from paper mills could be turned into biofuels as well. Didn’t we used to have a few off those? lol

  9. Anonymous says:

    I just left one IT company in Fredericton to go to another one in town. Both companies have over 60 employees and a good portion of there business is outside of NB. Unfortunately they have more work than skilled workers to do the job and in some cases have to turn down work because of lack of resources.

    I find a lot of my friends in the industry are moving around at the moment too. It seems everyone is looking for experienced people. This drives salaries up for people in the industry but is slowing growth plans for a lot of companies. I’m sure declining enrolment in Computer Science programs is affecting the number of skilled workers in the IT industry in NB.

  10. nbt says:

    Geeks on Ice relays a very important point regarding the strengths of the IT sector in New Brunswick. It starts small and grows. Yes, it sounds a bit simplistic (and a bit defeating for those who see courting big corporations as the solution to all) However, let’s remember, this trend could be found within the IT sector, at its peak, in Ottawa and in San Jose (but in reverse so to speak).

    In other words, a good percentage of the IT sector was being driven by small companies which were being run by people who had quit a larger company in favour of owning their own startup. (This happened, in particular, with many Nortel and JDS Uniphase sofware engineers who gained angel investment money to startup their own IT firms)

    Which reminds me of the study done by UBC a few years back which showed that only 12% of small businesses actually grow in terms of employment — most of the jobs in the small biz sector were being created by people quitting large companies to work on their own startup. So maybe David wasn’t all that far off in his assessment of the failure rate of small biz?

    Although, it does give hope for small business (especially the IT sector) since it may indicate a succesfull pattern in courting smaller startups rather then trying to compete for multi-nationals who want gazillions in corporate welfare dollars just to relocate to a particular region or province which, I might add, drives up taxes on small biz in the area they locate to (due to a subsidy based approach which has been used here for decades which diverts profits and capital from smaller companies via corporate taxes). So there really in an incentive in a small market like NB to keep with leaner and meaner IT startups which will eventually grow into something larger.

    I know I argue ad nauseam in favour of small business support, but let’s face it, the bottom line is that low taxes provide greater cash to help them grow. Not to mention, small businesses face high compliance costs with the tax system, including their eligibility for tax preferences, such as the research and development tax credits.

    While, unlike David, I believe support in favour of small business tax relief should be recognized, the existing tax system has the unfortunate impact of penalizing growth. Once small businesses become public or larger than $15-million in asset size, they face much higher taxes on their income and see their supports pretty much evaporate.

    Not only does the current tax regime penalize small business growth, it creates several tax planning challenges for larger companies that further leads to inefficiency and unfairness.

    Again, I go back to the IT sector which (is being discussed in this thread) as a perfect example. For example, because of tax policy, many high-income investors can reduce personal taxes by leaving their income in small Canadian-controlled private corporations taxed at less than 20%. Further, it is easier to split income with their family members by forming small business corporations than by earning salary income.

    As well, the lifetime capital gains exemption provides unexpected tax relief for many large corporations. Employees of public companies create private management companies so that their shares may be eligible for the $500,000 capital gains exemption, a good way to reduce taxes on their employment income.

    And as mentioned above, a typical arrangement in the high-tech community is for employees to quit large companies to form their own startups. While this might be viewed as boost to productivity, the game is to increase research and development tax credits that are much greater for small businesses compared with large public companies.

    Anyway, to make a long story short, as Geeks on Ice pointed out indirectly, governments should revamp their support for small businesses to encourage growth and reduce inefficiencies and unfairness. Because as the Geek said, “Didn’t Microsoft, HP, IBM and Apple all start in a garage with 2 people?”

  11. Anonymous says:

    This report is out of date but provides some interesting background; 200 NB IT companies employing 4,500 people in 2001.

    http://iit-iti.nrc-cnrc.gc.ca/locations-bureaux/report-nb-rapport/baseline-study-etude-base_e.pdf

  12. Anonymous says:

    There are a few successful small IT/software/Technology Firms that started in 95-96 and are still around and doing very well. One of them is Indosoft Inc. (http://www.indosoft.com) which is 20 plus and completely export driven. There is Interactive Visualization Systems (http://www.ivs3d.com). Of course, we cannot forget PQA which has blossomed into a much bigger company with probably over 100.

    I hope this information adds to your list of IT companies in Fredericton.

  13. Anonymous says:

    Here is a good start to an IT directory as well. Published in 2008

    http://www.gnb.ca/0398/export_ex/directories/index-e.asp

    YVT,
    First Timer