The Silicon Valley Why high-tech wants Whistler… and Whistler wants high-tech By Andrew Mitchell High-technology is one of B.C.’s fastest growing industries, with literally thousands of new ventures and franchises popping up all over the map. Although most of the high-tech sector is centred around the greater Vancouver area, a few visionaries are taking advantage of the new technology to prove you can run a global high-tech business from anywhere — even Whistler. It’s a lifestyle thing. "Tall fir trees, forested trails, snow-capped mountain vistas, basketball courts, soccer fields, a museum, a store, numerous food pavilions, and shuttle buses." It sounds a little like Whistler, but it could apply to almost any West Coast community that wants to promote itself as a great place to live and work. This passage was actually taken from Microsoft’s online job centre, and describes Microsoft’s sprawling high-tech "Campus" in Redmond, Washington — a Seattle satellite that is proud to be the home of the most important software company in the world. Because of Microsoft and the spending power of Microsoft employees, Redmond has one of the lowest unemployment rates in the U.S. at just 2.4 per cent. In 1998, the average household income in Redmond was $59,000 (nearly $85,000 CDN), second only in Washington to a small Seattle suburb where the city’s millionaires have estates. The City of Redmond is also doing well. City council is actively creating new parks, building infrastructure, and supporting the thriving local arts scene — it’s easy to spread the wealth when you have a $250 million annual operating budget to serve the needs of just 44,000 residents. Any city or town in the U.S. or Canada would kill to be the next Redmond, and many have committed resources to building specialized infrastructures that attract high-tech businesses, including high-speed Internet connectivity, digital cellular services, and reliable power supplies. These communities actively compete with one another for high-tech businesses, offering lower lease rates, tax breaks (wherever possible), public parks, ample parking, exercise facilities, conference facilities, airport shuttles — even lower power rates. Why? Because high-tech companies are generally profitable, prone to growth, and pay their taxes on time. For the most part they are environmentally friendly and attract the kind of well-heeled, well-educated and well-paid people that can’t help but have a positive influence on a community. Furthermore, they tend to multiply: successful high-tech companies tend to attract other complementary and supporting high-tech companies, and so on, and so on. Within a short time of relocating to Redmond, once a logging and farming town, Microsoft was joined by AT&T Wireless, Space Labs and Genetic Systems, to name just a few. In B.C., the communities of Richmond and Burnaby have been the most successful in attracting high-tech businesses. According to a review of the technology sector’s top 100 companies by BCBusiness magazine, 35 were located in high tech parks in these cities. Vancouver, North Vancouver, Surrey, New Westminster, Port Coquitlam and Victoria also claim a sizeable share of the growing high-tech pie. And it is growing — the number of high-tech employees in B.C. increased by 10 per cent last year to 52,000, compared to a mere 0.1 per cent growth blip in all other industries. High-tech businesses contributed $2.64 billion to the provincial gross domestic product with almost $6 billion in revenues in 1998 — a 6.2 per cent increase over the previous year. While high-tech only accounts for 3 per cent of our provincial GDP, that figure is expected to increase dramatically as the high-tech sector continues to evolve and startups begin to show returns. In 1998, there were 506 high-tech companies in B.C. In 2000, there are more than 7,000. One-third of these businesses startups are expected to hang in for the long term. The biggest challenge for this fledgling business sector, however, is not the ability of high-tech parks to serve their needs through recreation centres and shuttle buses — it’s finding, hiring and retaining qualified high-tech workers. Right now, about 20 per cent of available high-tech jobs in this province need filling. Most companies blame the brain drain south, high taxation, and the ever controversial capital gains tax. While salary is always an issue, for the new generation of tech wizards it’s only part of the appeal. With so many open positions and so few qualified candidates, the workers have the upper hand — they get what they want. To deliver, employers have to offer more than just a competitive salary. Some will offer stock options and bonus plans. Others will offer a casual atmosphere and the freedom to wear track pants to the office. More and more high-tech employees, however, are going for lifestyle. That’s where Whistler, a world-class mountain playground, goes the extra mile. The Paradata paradigm The acquisition of a new space on Millar Creek Road brings the total number of Paradata Systems Inc. units in Function Junction to five. Employees, taking a page out of Bill Gates’ playbook, have jokingly started to refer to this complex as the Paradata Campus. The fifth building is destined to become a kind of recreation centre where employees can work out, blow off steam with a game of foosball, or just sit and socialize while they eat their lunches. Over the past two years, Paradata’s growth has been exponential. Once a small startup with four unpaid employees, Paradata currently employs more than 70 people. Up to 30 more people may be needed in the next few months. The company’s success is a classic case of being in the right place at the right time, with the right people and the right technology. Paradata sells and integrates online payment processing systems based on the SET (Secure Electronic Transaction) protocol. SET was developed by VISA and MasterCard, and later adopted by all leading credit card companies and corporations like IBM, Microsoft and Netscape. The SET protocol, which uses digital certificates to verify cardholder and merchant validity during the course of an online transaction, is widely considered to be the safest electronic data transfer service available. Back in 1998, Paradata became the first North American company to develop payment engines based on the SET. Rather than offer their services to merchants like other payment engines, such as Cybercash and Cybersource, Paradata offers their services to financial institutions so that they can turn around and offer secure online transaction processing to their customers and business clients. Several leading financial institutions in North America (like the Royal Bank) are Paradata customers, and the company has made a successful leap into the European market with Eurocard and Allcash in Germany, and Europay in Switzerland. With satellite offices in Vancouver, Toronto and Zurich, Paradata is already a global success story. And according to Shannon Byrne, Paradata President and CEO, Whistler is a big part of that story. "This is a good place to do business, one hundred per cent," says Byrne. "This is the dream for me and everyone who works here." The word is out. While other companies in the Lower Mainland are scrambling to attract high-tech employees, Paradata is being snowed under with resumes from all over the world. It’s not a happy coincidence that Paradata is located in one of the World’s most recognized mountain resorts — from the beginning, Byrne knew that Whistler would be a huge selling point for high-tech employees. "It was a logical place to be," says Byrne. "We’re obviously looking to attract the best of the best. Money is important to them, but it’s not everything — for many we’re an opportunity to be a part of all that Whistler has to offer, to have the kind of lifestyle they want." The appeal of the lifestyle is so powerful that Paradata has even attracted qualified tech workers from south of the border, creating a kind of reverse brain drain. Closer to home, the company has also attracted a large number of long-time Whistler residents with career goals that they would ordinarily have had to move to the city to fully realize. The allure of mountain culture is hard for any outdoor person, regardless of their computer programming abilities, to resist. Before earning her Master’s degree in computer science from the Technical University of Nova Scotia and landing at Paradata five years ago, Byrne herself had caught the Whistler bug. Born in Halifax and raised on the local ski hills, Byrne raced skis all through high school and eventually went into coaching. After completing an accounting and information systems degree at the University of St. Mary, she moved to Whistler and worked as a night auditor for the Chateau Whistler. Later on she became a coach for Dave Murray Ski Camp. She went back to school in 1989 to earn a degree in computer science. After graduation, she padded her resume with low level programming and debugging work at companies like Siemens and Canada Post. Feeling shut out of senior positions, she decided to go back to school for a third time. With a master’s degree in computer science, she could have walked into the corner office of almost any software company. The allure of the mountains, however, was too powerful to ignore. After coming across an ad for a contract programmer for Paradata, then located in Squamish, she knew where she wanted to be. She joined three other programmers in the venture, and agreed to work for no pay. "Like everybody else, I came here for the lifestyle. When people find out who we are, where we are and what we’re doing, people are blown away. They want to work for a company that gives them the same lifestyle," says Byrne. "It’s a state of mind. One of our core values is lifestyle balance — a world-class business, with a world-class playground in our backyard, and time to enjoy both." Paradata could very well be the only high-tech company in North America to offer an employee ski program where every Paradata employee is given a ski pass (or a membership at Meadow Park recreation centre) and time out of the office to use it. While employees are not free to ditch work every time it snows 20 centimetres, they can take advantage of scheduled ski breaks throughout the week. If there’s a catch to locating their central office in Whistler, Byrne has to find it — even with the ski program, she estimates that operational costs are roughly the same in Whistler as they would be in downtown Vancouver. The only real drawback from an operational standpoint is the long drive to the airport for frequent business travel. "If it becomes too much of a problem, we may have to hire the occasional helicopter or hire someone else to do the driving so we can work during the commute," says Byrne. Problem solved. Housing is also an issue for Paradata, like most other Whistler businesses. "It’s a reality in this town and we’re dealing with it," says Byrne. "We take care of our own needs, as far as finding the office space and housing for employees." Realizing the potential of the housing issue to affect their ability to grow, Paradata is in the process buying and renting accommodation anywhere they can find it, including Pemberton and Squamish, and is managing those properties as staff housing. "Landlords like the fact that we’re a year-round business, and make an effort to be a part of their community. We buy houses, because that’s a business expense. Our intention is to make Paradata happen here, and so far we’ve been successful. "We want to be part of the community, supporting local softball, hockey, participating in fund-raising programs, the Rotary Club — another core value is a mandate to help take care of the community we want to grow." Whistler has also given Paradata something to talk about; instant name recognition and a common point of reference that people all over the world can appreciate. "Everyone has heard of Whistler, and our customers like the idea of dropping by to visit us a few times a year. The name itself is synonymous with ‘the best’ and ‘first class’, and that hasn’t hurt us a bit." The mechanics of Quantum The day couldn’t be going better for Calvin Winter. He hangs up the phone and announces to his partner, Sean Wolfe, that Quantum has won a contract to design and build a cooler system for a spin-polarized solid hydrogen target for particle physics experiments worth $30,000 US. The day before they shipped a space simulation chamber for spacecraft electronics testing to Japan worth $15,000 US. In the past they have built similar systems for Bristol Aerospace and the Canadian Space Agency. Not many people in Whistler know what Quantum does exactly, and even Winter finds it hard to explain to a layperson. According to the company’s brochure, Quantum is on the leading edge in the design and development of multi-stage, cryogenic refrigerators, specializing in helium liquefiers and reliquefiers. Helium reliquefiers, if you need a better explanation, are vital components for Magnetic Resonance Imaging (MRI) machines. Quantum also dabbles a little in cryogenic components, helium recovery systems, nitrogen liquefiers, superconducting magnet systems, and magnetic measurement systems. Recently they designed a massive superconducting magnet test facility for the Korean KSTAR Superconducting Tokomak research project — an experiment in fusion energy. You can find Quantum projects all over the world: Korea, Japan, the U.S., Switzerland, Sweden, Germany, Italy, France, the U.K. and Bahrain. You can find Quantum Technology Corporation’s headquarters in Whistler. "To a degree, high-technology has given us the freedom to be here," says Winter. "All I really need to function is a healthy lifestyle, a telephone, a computer, the Internet, a workshop and really good courier access — and I find courier service to be better here than in Vancouver because everything is so concentrated here in Function." Winter, who is also a director of the Whistler Chamber of Commerce, feels that high-technology could easily have a future here. "Generally speaking, the beautiful nature we live in attracts many people and that means a higher cost of living that filters out who can come. Between those two constants, there is lots of opportunity for intellectually-based companies to come to Whistler. They have both the money and the mindset — we’re seeing that in the rapid growth of Paradata. People are going for quality of life these days, not money." Winter believes that tourism will always be Whistler’s number one industry, followed by natural resource industries like forestry and minding. However, he feels Whistler needs a third industry, preferably high-tech, that isn’t seasonal and doesn’t rely on fickle tourist dollars. "Our goal should be to diversify business in town so we don’t need to rely on tourism as much," says Winter. "If we had a bad snow year or a summer where it rained every day, where would we be? All our eggs are in one basket right now. "The Chamber of Commerce is very supportive of developing our high-tech side, as is the municipality. They view it as a clean, environmentally compatible industry with the local environment. It will provide some economic diversification and protect us from the ups and downs of the main industry of this town." Winter founded Quantum in 1981 with a fellow grad student from Simon Fraser University. Seven years ago he packed up the lab "about one semi-trailer load of equipment" and moved to Whistler with his family. His partner went on to a teaching position at UBC. It’s a small company, with about three and a half employees in Whistler and other small offices in Germany, Korea, Switzerland and the U.S. The few employees that Quantum does have are all extremely qualified scientists and technologists. Winter himself holds a PhD in Physics and a degree in mechanical engineering. He also plays the stock market and is looking for partners in an investment portfolio, or mutual fund, that takes a purely mathematical approach to buying and selling stocks — predicting market changes based on statistics and probability. The same day he sold the cooler system, Winter made money with a predicted increase in value for the Canadian dollar. He runs a science club at the high school in his spare time, and is constantly urging the school and community to invest in more science equipment and shop equipment, such as a metal shop or an electronics shop, that reflects the changing economy and furthers adult education. "It’s important to be more supportive of science in Canada, for our children," says Winter. "They need math and science to prepare for the careers of the future which are going to be very different than the careers of the past." Fostering high-tech in Whistler will ultimately bring more technological expertise to town, and with it the opportunity for scientists and programmers to mentor local students, offer internships and provide hands-on experience. "It’s important for students to know that they’re getting support, and important to realize that it is possible to do it — you don’t have to be a genius, it just takes determination and persistence. And the right equipment." If Whistler is lacking anything, says Winter, it is the educational component that generally accompanies high-tech industries. For high-tech employees, the education process never stops — new technologies and skills are required all the time. "I think we are very well-suited for high-tech — there’s a certain amount of timing involved, and it can be really competitive. You have to move fast and get the pieces in place, or the window of opportunity closes." Ready or not … The high-tech industry is already in Whistler, and it looks like it’s here to stay. Although we are reaching build-out in terms of bed units and office industrial space recommended in the community growth plan, high-tech businesses are using what’s available to them as best as they can. "I think we have all the ingredients," says Whistler Mayor Hugh O’Reilly. "The people that are involved in the high-tech industry are really our clients anyway — they’re young, they like snowboarding, they like mountain biking. "I talk to the companies, and they say you can’t throw any more money at employees — all of them already make good wages. What you can do is offer them lifestyle." O’Reilly has met with Byrne and came away encouraged that Paradata understands the limitations imposed by the community growth plan, and will manage growth within the constraints of the plan and the space that is available. "They’re excited and we’re excited. They put out a tremendous product and have a bright future here," O’Reilly says. Economic diversification is also part of the long-term plan, and O’Reilly feels that having companies like Paradata in Whistler will ultimately benefit the town. "They add strength, support the community, and are active members of it. They add a certain level of expertise that we could tap into at certain times. You want to have a variety of businesses and people to be successful." Whistler’s high-tech industry goes beyond Quantum and Paradata. Locals have leapt into the new economy with e-commerce Web sites, such as www.art-brokerage.com and www.snowboard.com. Video production companies like Treetop Productions, Radical Films, and Heavy Hitting Films have also set up shop in Whistler, using the latest digital and 3D technology to produce ski and snowboard movies. Down the highway, Squamish also appears ready to diversify its own economy and capture a share of the high-tech market through the construction of a high-tech business park. By this time next year, Telus will bring high-speed internet to Squamish with T1 connections and a local fibre-optic network. The goal is to make Squamish attractive to Vancouver high-tech companies, and to serve the growing high-tech needs of local businesses. It’s significant, because Squamish wasn’t scheduled for this kind of hook-up until 2007. Companies have already started to bite. Squamish recently became the location for the Research and Development department of Bycast Media Systems Canada Inc., a company that provides streaming media solutions over the Internet using a variety of supporting technologies. While it may appear that Whistler and Squamish could wind up competing for high-tech businesses and employees, Byrne feels having more high-tech industry in and around Whistler will inevitably work for the good of every company as training programs and the expertise follow. "If the only other option for qualified people is to go to Vancouver, I’d rather keep the talent here," says Byrne. "One girl I knew when I was here years ago moved to Calgary to follow a high-tech career. Now that we’re here, she wants to come back." It was a lifestyle decision.