Quebec has taken giant steps over the past twenty years to create and then consolidate its technological and digital industry. Its growth since the bursting of the techno bubble in 2001 is remarkable. A helm is needed not to waste this momentum.
Quebec technos are undoubtedly a case of glass half empty and half full. On the bright side, job growth in digital-related industries since the turn of the millennium has been more than positive. In 2001, Canada as a whole had 380,000 skilled workers in information technology (IT). In 2021, Quebec alone had nearly 300,000.
At the time, there was talk of a labor shortage in the sector, as there were 3,000 people short of filling the new positions created nationally. Companies established in Quebec said last December that they needed 13,000 more people to fill existing vacancies, even before talking about growth.
Between 1997 and 2004, we saw the birth of the Quebec video game sector thanks to the first foray of the French publisher Ubisoft on North American soil. In 2004, the Quebec government sold the remaining assets of Innovatech, the province’s main venture capital firm at the time, for $150 million.
On March 16, iNovia Capital, one of the most visible investors in the province’s dozen venture capital funds, took part in a series of financings on the Montreal site Talent.com which, on its own, was worth 150 million. Investissement Québec and the Caisse de depot et placement du Québec were also involved. The two Quebec institutions have been major investments in technology for several years.
After the unicorns, the stallions
Quebec’s weight in the video game and artificial intelligence sectors is enormous given its demographic size. The province is a pioneer even in quantum computing. However, it must elbow its way to remain competitive against very large foreign rivals such as Germany, China and the United States.
Unfortunately, there is one place where she does not have the means to defend herself well: the wallet. Foreign companies have deep pockets and are not shy about buying up the most promising Quebec SMEs before they become larger companies. Or before they go public. And that, when they are not going to outright poach the best professionals by promising them a commitment bonus, better salary and share buyback program for the following years…
And this is precisely where the various Quebec strategies fail. Quebec remains one of the Canadian provinces where business creation is the weakest. In fact, Quebec is the province in Canada with the smallest number of businesses per inhabitant (35.3% compared to 39.7% for the Canadian average).
The government’s intention, when it participated in the emergence of video games in Montreal, was to create a “critical mass” of major players in the metropolis to stimulate the creation of Montreal studios. Its objective in investing more than 800 million dollars in artificial intelligence since 2016 was to accelerate the transfer, to new companies, of the fruits of university research.
Representatives of these two sectors agree on the need to shift into second gear to sustainably cement their success. Because otherwise, the billions invested in too few start-ups will mainly benefit their foreign buyers. Some of these start-ups have grown large enough to earn the nickname “unicorns”, a term originating from Silicon Valley for start-up which are worth over a billion US dollars.
Also in the suburbs of California, we call “ scale-ups » these unicorns capable of confirming their success and spreading their wings to become a large company or a multinational. This expression has not yet been properly translated into French. There are obviously very few of them in Quebec at the present time.
The name “stallion” might be appropriate. And deserves to become, if we rely on people both in video games and in AI or elsewhere in techno, a central element of Quebec’s digital strategy.
The province is recognized worldwide for its cheap skilled labor. Maybe she should improve her reputation by producing more unicorns and stallions…