But does it really matter that a company's corporate HQ is outside the province?
Scroll down BIV's list of the top high-tech companies in B.C. and it doesn't take long to realize that nearly all of the province's largest technology firms have an international address.
In fact, only two of largest 10 companies, by staff numbers, call B.C. their home and corporate HQ. Others are under the wing of parent companies in such places as Toronto, New York and Silicon Valley. Further down the list, Finland, France and Taiwan are named as head office locations.
The concern that B.C.'s technology cluster may simply be an extension of larger clusters elsewhere is not new. But with Aspreva Pharmaceuticals, Blast Radius and TIR Systems and other firms getting snapped up in the past year, the fear is that the province's cluster has lost some homegrown momentum.
Pascal Spothelfer, president of the British Columbia Technology Industry Association, puts the deals into context. "These companies are being acquired, but they are big enough and mature enough that they aren't just acquired for their intellectual property and research and development. The core of the operations remained in B.C."
For him, the issue of where B.C. companies are headquartered is moot, so long as the firms can maintain their B.C. presence and act as they did prior to sale - as anchors in their respective industries. In doing so, they cultivate the next generation of entrepreneurs who will, ideally, continue to contribute to the growth of B.C. tech.
Case in point: Electronic Arts (Nasdaq:ERTS). Much of the top-level talent working in B.C.'s video game development cluster has been previously employed by EA, though its parent is headquartered in California.
Another example is MacDonald Dettwiler & Associates Ltd (TSX:MDA). While the proposed sale of its space division has become the flash point for a sovereignty debate among Canadians, its co-founder, John MacDonald, is now leading one of B.C.'s most promising technology companies. He's chairman and CEO of Burnaby-based Day4 Energy (TSX:DFE), the maker of photovoltaic (solar) panels, which ended 2007 with a $100 million initial public offering (IPO) - a high note for B.C. tech last year, given the current investment climate. Noted David Berkowitz, a partner at Vancouver venture cap firm Ventures West Management: "We still see the solar market having great potential for public offerings; but with the financial markets so volatile right now, IPOs are not happening, there's just not an appetite."
Both Cellex Power Products and TIR Systems represented successful exits for Ventures West last year. The former was bought last June by Royal Philips Electronics (NYSE:PHG; AEX:PHI) in a $75 million all-cash deal, while the latter was acquired by fuel cell maker Plug Power (NASDAQ:PLUG) for $45 million.
Even though the exits were celebrated by Ventures West, the foreign takeover of B.C. technology is an issue for the firm. "It was the right thing to do from a shareholder perspective; we created some good value," said Berkowitz. "But it's disappointing when something [with] multibillion-dollar potential that was invented in B.C., ultimately, isn't going to get commercialized here."
It's a problem that Berkowitz partly relates to the limited supply of venture funding. Young start-ups can find funding in the early stages of development, but the real challenge lies in accessing the larger pools of late-stage capital that are needed to evolve a startup into an industry player. "They either flounder and can't compete, or they get sold early on," said Berkowitz.
What is needed, he said, is fewer venture firms, but larger pools of capital. And with more capital, venture firms are able to earmark more funds for late-stage companies.
In launching the $90 million B.C. Renaissance Capital Fund earlier this month, the provincial government hopes to attract more institutional investment into B.C.; alleviating some of the pressures that venture cap is facing related to the tight credit market. Five of the fund's six managers are located elsewhere in North America, in a bid to draw more international investment to B.C. Ventures West is the fund's sole B.C.-based manager.
"Its a pretty tough time for raising venture funds out there," said Berkowitz. "This is money, and these are investors that will be spending time in [B.C.] that otherwise would not have."
A problem that technology companies of all sizes, from anchor to startup, are facing is attracting and retaining talent in the industry. "The battle for top talent continues," said Greg Wolfe, Business Objects' executive VP and general manager in the Americas. "Canada, and Vancouver as an operating location, is getting increasingly expensive due to factors such as currency, business taxes and wages to support high real estate costs and an increasingly expensive cost of living for our employees."