Content of the article

Not everyone in the Calgary tech community is thrilled with the news that IBM will receive up to $5 million in funding from the Opportunities Calgary Investment Fund.

Content of the article

Last week’s announcement prompted further questions from the industry about the structure and decision-making regarding the $100 million fund.

“OCIF doesn’t really need to spend public money funding a multi-billion dollar multinational organization to come to Calgary,” said Jay Gohill, president and CEO of Arcurve, a company Calgary-based technology services company.

Content of the article

“They can do it themselves. They don’t need any help from the city or the government in any form. The businesses here in Calgary need it and all they need is people to talk about it.

Gohill said he received numerous calls from other frustrated tech company founders after Wednesday’s announcement.

Content of the article

At the root of the last set of questions is the decision to fund one of the largest technology companies in the world. IBM achieved global revenues of $58 billion in 2021-22 and is already well established in downtown Calgary, including 25,000 square feet of office space that will be repurposed for its new Customer Innovation Center .

Content of the article

Premier Jason Kenney said the province will contribute an additional $5 million to IBM through the Alberta Jobs Now program. IBM is part of the plan, but funding is capped at 25% of new employee training and salary up to a maximum of $25,000 per hire.

Under the program, companies were capped at 50 employees across three intakes. Through an agreement with the province, IBM is eligible for a maximum of 60 positions and would reach a maximum of $1.5 million.

“The 10 additional positions available for IBM are a great deal for Alberta because they have helped attract additional investment from a multinational company to our province to create well-paying jobs,” said Tricia Velthuizen, press secretary for the Employment Minister Doug Schweitzer, in an email. .

Content of the article

With its new Customer Innovation Center, IBM aims to hire at least 250 new employees, and up to 430, over the next five years. Its goal is to help businesses in Western Canada and the United States through digital transformation to improve their sustainability.

Gohill said there are already Calgary-based companies within this ecosystem doing what IBM’s new Innovation Center promises – including Arcurve which provides technology and software development and professional training.

Mayor Jyoti Gondek spoke about the need to change OCIF during her election campaign, saying in October that she would structure it differently.

“I would change the terms of OCIF to focus on local businesses that are already doing well to help them do even better,” she said.

Content of the article

On Thursday, the mayor defended the investment in IBM in a statement: “It is important for OCIF and IBM to unlock opportunities for Calgarians, with this expansion’s focus on sustainability and climate risk management. As a leading global company choosing Calgary as a site for its expansion, IBM’s global presence and reach drives the growth of our technology ecosystem.

Gondek highlighted the number of potential hires and underrepresented populations, while IBM’s talent recruitment and certification program will help grow the talent pool in Calgary.

“Creating a critical mass of skilled professionals has forced OCIF to evolve to support scaling as well as start-ups,” she said.

Calgary Economic Development had said before IBM’s announcement that there were about 4,300 tech job openings in Calgary.

Content of the article

“The modern innovation economy is driven by companies that accumulate and commercialize large amounts of intangible assets, such as data and intellectual property,” said Bronté Valk, Alberta Government Affairs Lead for the Council of Canadian Innovators, in an email.

“Given the ‘winner takes all’ nature of technology growth, the government needs to be smarter when making deals with large global tech companies, as these deals have negative impacts on the growth of domestic companies in the world. Alberta, especially in a job market. market with zero percent unemployment among skilled workers.

Brad Perry, executive director of CED, said during Wednesday’s announcement that the investment is aimed at reaching critical mass and boosting the entire tech sector. As businesses compete with each other, there is mutual benefit in having more people, more jobs, and more businesses in the ecosystem.

Content of the article

Earlier this year, OCIF committed $4 million to Calgary’s Thin Air Labs Fund, a $100 million venture capital fund to invest in entrepreneur-led innovation and technology ventures.

Thin Labs co-founder James Lochrie said in an email that he supports IBM’s investment by OCIF.

“This is another vote of confidence in our city and the potential of the innovation sector (in) the province,” he said. “This kind of continued investment in Calgary by big tech companies underscores just how solid the opportunity is.”

OCIF has so far distributed $68 million to 22 projects since 2018. The fund’s six investments in 2021 included money for local businesses – $1 million to Endeavor Canada which supports entrepreneurs across the country. country; $7 million to Plug and Play Alberta; $3 million to Creative Destruction Labs – Rockies located at the University of Calgary’s Haskayne School of Business to support young start-ups; and $333,000 to Movement51, the nonprofit arm of local business The51.

Content of the article

OCIF has also committed up to $1 million to SVG Ventures | Thrive to bring the global accelerator to Calgary to support Canadian agri-food startups; and $6 million to Accelerate Fund III as seed capital for local entrepreneurs in a fund managed by Vancouver-based Yaletown Partners.

According to OCIF’s first quarter report for 2022, only 1,008 of the 1,920 jobs projected by the fund since 2018 have been created, although many projects have multi-year scalability.

The first 20 project commitments support a total project investment of $335 million to $680 million.

[email protected]

Twitter: @JoshAldrich03