Business

The Wired West

Hey, it’s not just oil. Alberta, the most connected province in the country, is also a major tech player

Brian Bergman March 12 2001
Business

The Wired West

Hey, it’s not just oil. Alberta, the most connected province in the country, is also a major tech player

Brian Bergman March 12 2001

The Wired West

Business

Hey, it’s not just oil. Alberta, the most connected province in the country, is also a major tech player

Brian Bergman

Art Price spent much of his adult life in the upper echelons of Alberta’s so-called Old Economy. Among other things, Price, 49, served for nine years as president and chief executive officer of Husky Oil Ltd.,

during which time he enjoyed the peaks of $40 (U.S.) a barrel oil and endured the valleys of $11 oil. By 1995, Price was ready for a new challenge—and he found it in a then-emerging phenomenon, the World Wide Web. Price created his own company, Axia NetMedia Corp., which has carved out a thriving niche offering Web-based educational sites for highly skilled professionals, including neurologists and jet fighter pilots. These days, the stocky, clean-cut Price may still look the part of an oil baron, but he talks very much like a New Economy guy. “The power of the digital economy,” says Price, “is that you don’t need a parked resource to be in business. We’ll have our own cycles, but they won’t be based on the commodity value of some resource.”

Price embodies a seismic shift under way in a province that many outsiders still view stereotypically as a land of rednecks and rig-hands.

Advanced technology is one of Alberta’s fastestgrowing sectors, accounting for an estimated 80,000 employees and more than $11 billion in annual revenue. Calgary is a national leader in wireless technology, while Edmonton’s University of Alberta and the University of Calgary are hotbeds for biomedical research. More than 50 per cent of Albertans use the Internet, the highest rate in the country. And the wired West is about to become even more connected. The Alberta government recendy launched a three-year project, known as the Supernet, which will link every school, hospital, library and government office in 420 communities across the province through a broadband, high-speed Internet network—the most extensive of its kind in Canada. The project’s progress will be watched closely by planners in other regions as the federal Liberals try to make good on their election pledge

SURFING AHEAD

Internet users as a percentage of population

that the whole country will have high-speed access by 2004.

The Supernet represents an attempt to bring the cyber-revolution to smaller centres and rural areas, where most residents and businesses must now be content to access the Internet through sluggish telephone lines. Along with faster download times, the new fibre-optic and wireless system will deliver stateof-the-art video and audio feeds. The Alberta government is providing $193 million in capital funding to a consortium led by Bell Intrigna to build the network. The government will serve as an anchor tenant on the system, but will not own it.

The initial rationale for launching the Supernet is tied to the province’s ambitious plans to promote tele-medicine and distance learning. But there is also considerable potential for economic development. Lome Olsvik, president of the Alberta Urban Municipalities Association, sees clear benefits for companies in small communities like Onoway, 50 km west of Edmonton. Olsvik, who is also deputy mayor of Onoway, notes that there are three manufacturing plants in the area, all of them “starved for bandwidth to properly market their products.” One company, for example, makes equipment for handling catde but does not have the video capacity to set up a virtual catalogue showing its wares in operation. Projects like the Supernet, adds Olsvik, will help wean the province from its traditional reliance on oil and gas and keep people and businesses in rural areas. “I think what you’re seeing,” he says, “is the way of the future.” The Supernet isn’t the only government initiative seeking to give Alberta a techno-advantage over other provinces. The Alberta Heritage Savings Trust Fund, first created in 1976, set up an endowment earmarked for medical research, the only one of its kind in Canada. Since then, interest earned on that endowment has pumped more than $600 million into medical research in Alberta—and attracted more than $ 1 billion in matching grants. Last year, the Alberta government unveiled a separate $500-million en-

dowment—expected to grow to $1 billion by 2005—for science and engineering studies.

Such research, much of it conducted at the province’s major universities, is producing economic spinoffs of its own. Technology commercialization programs at the University of Alberta and the University of Calgary rank among the top three in the country—and together account for up to 40 per cent of all such revenues generated each year in Canada. Oleh Hnatiuk, president of University Technologies International Inc., a company wholly owned by the University of Calgary, says Alberta’s “culture of entrepreneurship” helps. UTI “basically lives or dies,” he says, by its ability to license technological breakthroughs to outside interests or by helping to develop companies in which UTI continues to hold a minority shareholder position. Among the latter: Wi-LAN Inc., which develops wireless data technology; Cell-Loc Inc., which makes a cellular telephone location positioning system; and Oncolytics Biotech Inc., which is developing anti-cancer therapies.

UTI’s activities mirror two of the areas—wireless research and biomedicine—where Alberta tends to excel. Telecommunications giant Nortel Networks Corp. recendy made Calgary the site of one of only seven major plants the company runs worldwide; its Alberta facility, now being expanded, specializes in leading-edge wireless research. Similarly, executives of Matsushita Mobile Communications Development Corp.—part of the Panasonic family—announced in December they will build

a new $ 13-million wireless design centre in Calgary. The city was selected over 10 other possible sites in North America.

Much of the recent growth in advanced technology can be traced directly back to Alberta’s signature industry. Oil and gas companies have always relied on technology to find and develop the province’s vast natural resources. Perhaps the most dramatic example: advances in thermal technology, many of them pioneered in Alberta, dramatically reduced the per-barrel price of extracting crude oil from the northern Alberta oilsands, sparking a $40-billion explosion of new investment.

Having worked in both spheres, Art Price is among those who argue that drawing strict distinctions between the new and the old economies is misleading. But there are, he notes, some differences. “Alberta has an oil and gas industry because that’s where the resources are,” says Price. “But in the technology industry, you have only one asset—intellectual capital—and it can walk away.” Seen in this light, attracting and retaining skilled workers is perhaps the biggest challenge facing Alberta’s high-tech sector. But here, too, Price believes the province enjoys some obvious advantages. “You couldn’t pay me enough to work in downtown Toronto,” says Price, who grew up on a farm near Acme, 70 km northeast of Calgary. “In Alberta, we have a relatively small population and a good quality of life. If we don’t screw it up, I think we can have a lot of appeal.” Along the way—who knows?—some well-worn stereotypes may finally be put to rest. G3