For years, Silicon Valley has been the epicentre of technology and innovation. Much like aspiring actors flock to Hollywood, startups have rushed to this corner of San Francisco in hopes of becoming the next Mark Zuckerberg.
It’s no secret that Vancouver’s tech industry has been growing at an impressive rate over the past few years. However, it could be tipping the scales as the unlikely underdog that’s poised to become the next Silicon Valley.
“A recent tech talent report found that B.C. currently employs 150,000 people and brings in $126 billion a year,” said Kraig Docherty at our recent Breakfast Event. As the Director of Talent Programs & Hub Operations at BC Tech, Docherty says that this trend is only going to increase. “By 2021, we expect 196,000 people to be working in tech, with many more jobs that will need to be filled.”
Kevin Nelson, Senior Vice President of The High Technology Facilities Group at CBRE, shared that San Francisco is no longer the hot spot for tech giants as it once was. In fact, more and more people are leaving each year.
Here are three reasons the tech scene is migrating north:
Despite being the most expensive city in Canada to rent commercial real estate, Vancouver’s price per square foot is considered a steal compared to Silicon Valley.
“In San Francisco, tenants are paying more than $90/square feet. So when they see offices here going for $45/square foot, it’s considered on sale,” said Nelson.
According to a study by PayScale, the salaries in Silicon Valley range between $80,000 to $150,000 per year. In addition, companies are expected to often provide housing, transit, and a variety of perks to keep attracting top talent.
“The biggest expense for tech companies is talent. Real estate is only 7% of the total cost, whereas 93% is in labour,” said Docherty. “The same professional in Vancouver would be paid $60,000 a year, whereas in Silicon Valley they’d earn around $120,000.”
Not only are Vancouver professionals paid less, but companies also save due to the dollar. Plus they’re often not expected to provide the same level of perks as their San Francisco counterparts.
With a president who has been tightening immigration and work permits, it’s much easier for businesses to employ international talent in our city. Work permits can be issued in a few weeks, compared to the months or even years it would take south of the border.
Have you seen an increase of tech tenants in your portfolio? Tweet @naiopvancouver and let us know!