Profile of the Information and Communication Technologies Industry in Greater MontrĂŠal
Table of contents
1 Summary
...........................................................
01
Portrait of the ICT industry in Greater MontrĂŠal
.......................................
1.1
2 03
A growing GDP......................................04
1.2 Sales that demonstrate the
industry’s diversity............................07
1.3 A critical mass of jobs and
establishments.....................................07
1.4 Ranked second in North
America in terms of employment growth.........................................................08
1.5 Rapid access to large
global markets.....................................08
1.6 A favorable R&D environment
for businesses.......................................08
1.7 A highly favorable investment
climate........................................................10
1.8 A strong presense of foreign
subsidiaries ...........................................12
INDUSTRY LEADERS
...............................................
15
2.1 IT services................................................16
2.1.1 Computer services............... 16
2.1.2 Multimedia.................................. 18
2.1.3 Software........................................ 20
2.2 Telecommunications
services......................................................23
2.3 Manufacturing.......................................24 2.4 Wholesale and repair......................27
4 3
LABOR AND TRAINING
......................
29
3.1 A multitude of professionals
and fields of expertise....................30
3.2 Training establishments:
a superior academic network....................................33
3.3 A new generation ready to
take on industry challenges.......34
ICT-related research organizations, associations and groups
................................
5 41
Operating costs
............................................................
49
5.1 The most advantageous
operating costs in North America......................................................50
5.2 A favorable cost advantage.........52 5.3 Competitive specialized
labor costs................................................52
5.4 Clean, reliable and
affordable electricity........................54
5.5 Affordable office space costs....54
Table of contents
7
6
TAXES AND INCENTIVES
....................................
57
6.1 Corporate taxes: the lowest
in North America................................58
6.2 Targeted and highly
competitive incentives....................61
6.2.1 Tax incentives..........................61
6.2.2 Financial incentives.............65
VENTURE CAPITAL
.....................................................
67
APPENDICES
.................................
73
APPENDICE A:
MAIN ECONOMIC INDICATORS SUMMARY...........................................................74
APPENDICE B:
METHODOLOGY NOTES..............................75
APPENDICE C:
SOURCES.............................................................79
“The profile of the information and communication technologies industry in Greater Montréal” is jointly produced by Montréal International and TechnoMontréal
Testimonies writing: Frédéric Simonnot (Perception Communications), and validation by the concerned companies Photos: © lucetg.com Graphic design: Studio Créatif Be + Poisson Rose Design
Disponible en version française
Summary
Summary This profile, jointly produced by Montréal International and TechnoMontréal, paints a portrait of Greater Montréal’s Information and Communication Technologies (ICT) industry. It highlights the cluster’s key performance indicators and major sector players.
01
THE ICT SECTOR IN GREATER MONTRÉAL: Unshakeable growth The Greater Montréal ICT sector GDP grew by more than 25% between 2002 and 2010, reaching more than $9 billion and 70% of entire province’s ICT industry’s GDP output.
A highly-qualified labor pool The ICT sector occupies a central place in Greater Montréal’s economy. Its 5,000 establishments employ 120,000 workers. Greater Montréal is one of the only North American metropolitan regions to generate signification growth in this sector.
A favorable R&D environment for businesses R&D and innovation are solid competencies in the Greater Montréal area which hosts a significant network of knowledgebased organizations and institutions.
One of the most attractive metropolitan regions for ICT investors Between 2009 and 2011, more than 80% of ICT investors who chose the Greater Montréal area to expand their North American activities were foreign owned.
The most competitive operating costs Total operating costs for ICT businesses in Greater Montréal are as much as 16% lower than those of other large North American regions.
Among the world’s most favorable taxation and incentive structures ICT businesses benefit from tax burdens that are as low as one seventh of those of large North American city averages. They also benefit from an important range of targeted and highly competitive incentives.
Easily accessible venture capital Venture capital financing is accessible at all of a project’s development phases - whatever the scale. Since the year 2000, more than 45% of reported venture capital investments in Greater Montréal ($2.4 billion) targeted ICT projects.
université du québec à montréal (UQAM)
1
Portrait of the ICT industry in Greater MontrĂŠal
1
Portrait of the ICT industry in Greater Montréal
Greater Montréal’s Information and Communication Technologies sector is a significant economic engine. As a result, throughout the years, the region has successfully positioned itself as a major North American ICT pole.
1.1 A growing GDP The Greater Montréal ICT sector’s GDP increased by more than 25% between 2002 and 2010, reaching more than $9 billion and 70% of entire province’s ICT industry’s GDP output. Industry growth was more than twice as fast as that of the region’s economy as a whole. ICT was barely affected by the pullback that hit many other of the region’s sectors (- 0.01% between 2008 and 2009). Total growth in the region’s ICT sector has been fueled by subsectors such as multimedia (especially video games), software development and implementation of ICT services in numerous other sectors such as finance and health.
Index of Greater Montréal GDP growth, 2002-2010 ICT Sector versus the Economy as a whole (2002 = 100)
05
Index of Greater Montréal GDP growth, 2002-2010 ICT Sector versus the Economy as a whole (2002 = 100) 130 127 124 121 118 115 112 109 106 103 100
2002
2003
2004
2005
2006
2007
Economy as a whole
Province of Québec and Greater Montréal, 2002-2010 Province of Québec and Greater Montréal, 2002-2010
2002 2003 2004 2005 2006 2007 2008 2009 2010
Québec
4
6
8
10
2010
Chart 2
Real GDP of ICT sector ($ billions 2002)
2
2009
ICT sector
Real GDP of ICT sector ($ billions 2002)
0
2008
12
14
Greater Montréal (estimate)
Chart 1
testimony
Fujitsu Canada,
Japanese roots, but know-how from here Fujitsu Canada, a subsidiary of Fujitsu, the world’s third largest ICT supplier, uses its experience and the latest technology, to help clients build on their successes and competiveness.
“ Fujitsu Canada is particularly active in
the government services, finance, retail trade, public security, geomatics, and telecommunications sectors, as well as in areas that relate to digital urbanism and smart cities,” says Yves Pelletier, first vice-president, responsible for the Montréal office, as well as chairman of the board of TechnoMontréal.
Fujitsu Canada is present in 10 Canadian cities and employs 400 people in the Montréal region. The company offers a complete range of services: integration, managed services, services targeted towards computer centers, consulting services, custom solutions as well as reliable, performing computer products.
Fujitsu hold more than 34,000 patents and innovative methodologies, including Macroscope, an integrated repository of methods, processes and best practices, which guide the various stages of project completion. Fujitsu, which is active internationally, recognizes the expertise of its Canadian subsidiary, notably through investments in the implementation and operation of a first class call center in Montréal. The company has also just completed an innovation center tasked with helping small businesses to conduct research and development work.
“ We are placing big hopes on this center.
The Montreal ICT cluster already includes 5,000 businesses and there is no shortage of innovators in the region. It is not for nothing that the next World Congress on Information Technology (WCIT) will be held in Montreal in 2012!” says Mr. Pelletier.
07
ICT Operating revenues by sub-sector ($ billions) Greater Montréal, 2006-2009 ICT Operating revenues by sub-sector ($ billions)
1.2
2006 20%
Sales that demonstrate the industry’s diversity
Greater Montréal, 2006-2009
19% 30% 32% 100% 2007 18% 21% 31% 30% 100% 2008 16% 22% 31% 32% 100% 2009 12% 24% 32% 32% 100% 0
Despite a slight slowdown in 20082009 (-2.6%) attributable to the global economic crisis, operating revenues of ICT businesses in Greater Montréal have increased by more than 7% since 2006, to reach close to $25 billion for 2009.
1.3 A critical mass of jobs and establishments
0,5
10,0
15,0
20,0
25,0
In 2010, the ICT sector in Greater Montréal employed close to 120,000 people working in more than 5,000 establishments, representing more than 70% of this industry’s total weight in the province.
30,0
ICT Employment by sub-sector, Greater Montréal, 2010 Manufacturing Wholesale and repair ICT Establishments by sub-sector, Greater Montréal, 2010 IT services
Total ICT – Greater Montréal
Telecommunications services
Chart 3
ICT Employment by sub-sector Greater Montréal, 2010
ICT Establishments by sub-sector Greater Montréal, 2010
7%
20%
6% 15%
15%
52%
Manufacturing IT services Telecommunications services Wholesale and repair
13%
72%
Chart 4 & 5
Portrait of the ICT industry in Greater Montréal
1.4 Ranked 2nd in North America in terms of employment growth In all, the number of ICT related jobs and establishments in the Greater Montréal region grew by more than 4% between 2008 and 2010, this despite the global economic slowdown. In fact Greater Montréal ranked second among the 20 largest North American metropolises in terms of ICT sector employment growth during the period. This progress is in large part due to the IT services sub-sector (software, multimedia and computer services), which grew by more than 20% between 2008 and 2010, and now accounts for more than half of all ICT sector jobs in the Montréal region. This growth will likely continue, as this sub-sector remains one of the industry’s most stable pillars.
ICT Employment growth (%)
Twenty of the largest North American ICT Employment growth (%) metropolitan regions, 2008-2010 Twenty of the largest North American metropolitan regions, 2008-2010 NEW YORK MONTRÉAL TORONTO
RIVERSIDE SEATTLE PHILADELPHIA WASHINGTON ATLANTA PHOENIX SAN FRANCISCO HOUSTON BOSTON CHICAGO MIAMI DALLAS LOS ANGELES MINNEAPOLIS ST. LOUIS DETROIT SAN DIEGO -20, 0 %
-15,0 %
-10,0 %
-5,0 %
0%
5%
10 %
Chart 6
1.5
1.6
Rapid access to large global markets
A favorable R&D environment for businesses
The Greater Montréal region benefits from coveted access to the North American market through road and rail, two major international airports and one of the world’s busiest inland ports, all located near downtown. These infrastructures combined with a strategic geographic position give the region a highly favorable export platform. Moreover, in 2010, Québec’s ICT sector exported close to $4 billion worth of goods and services. It is estimated that the Montréal region accounts for more than 60% of the province’s ICT exports (close to $2.4 billion).
The Greater Montréal ICT sector’s vigor can be seen not only in its economic and employment weight but also in the more than $800 million that it invests in R&D. In fact the region accounts for an estimated 85% of the entire province’s industrial R&D. Businesses in the Greater Montréal that conduct R&D, benefit from the lightest tax burden in North America (see the Taxes and incentives section), a major location driver. Ten of the 16 largest ICT-specialized companies that invested in R&D in Canada in 2009 have a presence in the region.
testimony
Ericsson Canada,
a national R&D leader These days nearly 85% of all communications made using mobile devices in Canada transit through equipment and software made by Ericsson, the world’s largest telecommunications technology and services supplier. Ericsson established a global R&D and Services centre in Montréal in 1986. The locale currently employs approximately 1,800 staff, half of which work in research and development. The site contains a significant laboratory environment, one of the company’s largest outside of Sweden. The focus of the R&D activities are in Core Telecommunications Networks, Multimedia applications and solutions, and new emerging technologies which will enable the Networked Society. In addition to R&D, the Montréal centre also delivers professional services to Ericsson customers in North America and beyond.
“ Our clients are mostly cable and
telecommunications companies, which we supply with networks, multimedia solutions and professional services. We see ourselves both as a technological
leader and as a services provider, with the latter category accounting for close to half of our activities,”
notes Paddy O’Leary, head of Ericsson’s Montréal site.
Over the years, Ericsson has established solid relations with more than half of the universities in Québec, notably the four major ones located in the heart of Greater Montréal, and has taken advantage of various R&D tax credits to complete research initiatives. In fact Ericsson’s Montréal-based employees have filed 360 patents over the past 25 years.
“ I find the Montréal region, - which is
located in northeastern North America, - benefits from unique geographic advantages and is particularly well suited for our needs. There is an entrepreneurial mindset here, a positive attitude, as well as a diverse population set which stimulates creativity and innovation, two essential components of our organizational culture,” says Mr. O’Leary.
Portrait of the ICT industry in Greater Montréal
Top 10 ICT companies
investing the most in R&D in Canada that have a presence in Greater Montréal Industries
Rank in Canada
R&D spending in Canada ($ millions)
Intensity of R&D spending (% of revenue)
BCE
806
4.5
Telecom services
3
TELUS
653
6.8
Telecom services
4
556.5
N/D
Software and computer services
5
Alcatel-Lucent
224
N/D
Telecom equipment
7
Ericsson
197
32
Telecom equipment
10
Open Text Corporation
132.6
14.8
Software and computer services
17
CAE
121.6
7.3
Aerospace
18
Rogers Communications
81
0.7
Telecom services
28
CGI Group
76
2.0
Software and computer services
29
60.5
56.2
Manufacturing
35
Companies
IBM
PMC Sierra
1.7 A highly favorable investment climate Greater Montréal is an excellent strategic hub in North America to grow an ICT sector business. Its economic stability, the effervescence of new technologies combined with numerous incentives (see the Taxes and incentives section) give ICT businesses located in the area a considerable advantage. Between 2009 and 2011, several major players announced expansion projects or new facilities in Greater Montréal (see Table 2). It should be noted that more than 80% of these investments come from foreign businesses.
Table 1
According to Montréal International’s results ICT accounted for more than 60% of all foreign investments in Greater Montréal announced between 2005 and 2010. The sub-sectors most targeted by foreign investors were computer services, multimedia and software.
11
Selection of recent ICT investments in Greater Montréal (2009-January 2012)
Number Amount of jobs announced ($M) announced
Year announced
Type of investment
ICT sub-sector
Country of origin
Companies CAE
274
2,000
2009
Expansion
Software
Canada
149.4
n/d
2009
Expansion
Manufacturing
US
127
117
2012
Implantation
Computer services
France
92
130
2010
Expansion
Telecom services
UK
Warner Bros.
37.8
300
2010
Greenfield
Multimedia
US
SITA
16.3
125
2010
Expansion
Telecom services
Switzerland
Acquinity Interactive
10.2
135
2010
Greenfield
Software
US
LINKBYNET
8
65
2011
Greenfield
Computer services
France
Gamerizon
5
100
2011
Expansion
Multimedia
Canada
THQ
n/d
400
2009
Greenfield
Multimedia
US
Accenture
n/d
305
2010
Expansion
Computer services
US
Groupe Conseil OSI
n/d
300
2009
Expansion
Computer services
Canada
Eidos (Square Enix)
n/d
250
2011
Greenfield / Expansion
Multimedia
Japan
SAVA Transmedia
n/d
200
2011
Greenfield
Software
Canada
Electronic Arts
n/d
165
2011
Expansion
Multimedia
US
Funcom
n/d
136
2009
Greenfield
Multimedia
Norway
Keywords International
n/d
59
2011
Greenfield
Computer services
Ireland
P3 Group
n/d
50
2010
Greenfield
Computer services
Germany
IDS
n/d
50
2010
Greenfield
Software
Italy
Ludia
n/d
50
2011
Expansion
Multimedia
Canada
Nexsan
n/d
26
2010
Expansion
Software
US
Studio des Grenouilles Douées
n/d
25
2010
Greenfield
Multimedia
France
Z-Laser
n/d
20
2010
Greenfield
Manufacturing
Germany
Gemalto
n/d
20
2010
Expansion
Software
US
Pharsight
n/d
18
2010
Expansion
Software
US
eFront
n/d
14
2010
Greenfield
Software
France
Studio Galaxy
n/d
10
2010
Greenfield
Multimedia
France
AddOnMail
n/d
5
2010
Expansion
Telecom services
US
Broadcom
n/d
n/d
2010
Expansion
Software
US
CANIX
n/d
n/d
2009
Expansion
Computer services
Canada
OSISoft
n/d
n/d
2009
Expansion
Computer services
US
Esterline CMC ELECTRONICS OVH.com Ultra Electronics
Portrait of the ICT industry in Greater Montréal
1.8 A strong presence of foreign subsidiaries Foreign subsidiaries that operate in the ICT sector are at the origin of more than 30,000 jobs in about 400 establishments.
Greater Montréal is a major digital game production center and hosts several industry giants. These include Ubisoft (France), Eidos-Square Enix (Japan), as well as Electronic Arts, THQ and Warner Brothers (all from the United States). The Montréal region also hosts facilities operated by IBM, one of the world’s computer services leaders, and Ericsson, a key telecom player.
Foreign subsidiaries in ICT
by employment, Greater Montréal, 2011 Employment
Activities
Country of origin
Companies Ubisoft
2,000-2,999
Video game development and publishing
France
Ericsson
1,000-1,999
Telephone and wireless telecommunications services
Sweden
Esterline CMC Electronics
1,000-1,999
ICT manufacturer in the aerospace and defence sector
US
IBM
1,000-1,999
Computer services
US
Electronic Arts
750-999
Development and editing of video games
US
GFI Solutions
750-999
Computer services
France
UPS Solutions d’Affaires
750-999
Computer services
US
CSC
500-749
Computer services
US
Groupe Conseil OSI
500-749
Computer services
France
TEKsystems
500-749
IT recruitment services
US
ADP
250-499
Data hosting and treatment
US
Alstom
250-499
ICT manufacturer, transport sector
France
Covidien
250-499
ICT manufacturer, medical sector
US
Epicor Software
250-499
Computer services
US
Fujitsu
250-499
Computer services
Japan
Gameloft
250-499
Video game development and editing
France
Hewlett-Packard
250-499
Computer services
US
Nuance Communications
250-499
Software for digital imaging solutions and for voice synthesis and recognition
US
SAP
250-499
Enterprise software
Germany
VMC
250-499
Postproduction services for the video game industry
US table 3
testimony
GFI Solutions,
at the center of electronic exchanges
A global leader in business, accounting and banking solutions, GFI Solutions specializes in the design, implementation, integration and maintenance of management software, electronic business development and the provision of professional and technical electronic banking services. The company, which has 1,000 employees, is ranked among the largest integrators in North America. GFI Solutions’ origins date back to 1998 when Gilles Létourneau (who is now the company’s president and CEO) founded Conceptum, a Montréal-based consultancy. By the middle of the following decade the company was transformed into a products and services organization. Today GFI Solutions services some 55,000 clients in Canada, most of which are in Quebec.
“ We offer products and services to
businesses of all sizes, focusing on certain sectors, notably construction, hardware, forestry, daycare, notaries, public accountants and tour operators, as well as municipalities, government and financial
institutions. In the future, we want to stand out by placing ourselves at the center of our clients’ electronic exchanges, by for example enabling businesses in complementary sectors such as hardware stores and builders to transact directly, system to system,”
says Gilles Létourneau, president and chief executive officer.
Since the start, GFI has been following a growth strategy based on partnerships and acquisitions in vertical markets and promising geographic regions. This strategy has enabled the company to quintuple its size in just a few years, to reach annual revenues of more than $100 million, 80% software related and 20% from services.
“ Our coming organic growth opportunities
are in electronic business, payment solutions and mobility. These segments should enable us to double our sales during the next three years,” notes Mr. Létourneau.
MontrĂŠal Convention Center
15
2
Industry leaders
2
Industry leaders
Several large industry leaders are present in the Montréal region, concentrated primarily in four activity sub-sectors: IT services, telecommunications services, manufacturing, and wholesale and repair.
2.1 IT services This is the largest ICT subsector in Greater Montréal. It includes computer services, multimedia and software. 2.1.1 Computer services
Computer services companies
by employment, Greater Montréal 2011 Employment
Country of origin
Companies CGI
7,000+
IBM
1,000-1,999
Canada US
GFI Solutions
750-999
France
UPS BUSINESS SOLUTIONS
750-999
US
CSC
500-749
US
Groupe Conseil OSI
500-749
France
Accenture
250-499
Ireland
Cofomo
250-499
Canada
Epicor Software
250-499
US
Fujitsu
250-499
Japan
Hewlett-Packard
250-499
US
Iron Mountain
250-499
US
Telus HEALTH
250-499
Canada table 4
Greater Montréal hosts several major computer services players. For example a highly favorable investment climate and skilled workforce enabled CGI, a Canadian firm founded in the region during the 1970s, to become a world leader. Greater Montréal has also attracted major foreign computer services companies such as Fijitsu, GFI Solutions and IBM.
testimony
CGI,
global leadership and local responsibility Thirty-five years after being created in a basement by two entrepreneurs, CGI has become one of the largest independent global information technology and business process services providers, and the only one controlled by Québecers. Another interesting fact is that 90% of all company members (employees) are also shareholders.
“ Our business model is based on
close proximity with our customers and exceptional expertise in a half-dozen core activity sectors. We define ourselves as an integrator. We offer complete, end-to-end services, based on standard processes that enable us to complete 95% of our mandates on-time and on-budget, which is a considerable achievement in our industry,”
says Claude Marcoux, senior vice-president and general manager, Province of Québec.
To support its growth, CGI has created jobs around the world, but mostly in its various business units in Montréal and Québec. The company regards as a point of honor the
assistance it provides to help develop the next generation of IT professionals through various training, recruitment and mentoring programs.
“ The Montréal region possesses
undeniable advantages including highly competitive salary and rental costs, as well as exceptional technological infrastructure. We are also lucky to have a rich pool of competencies not only in ICT, but also in business management, administration, etc…, a considerable asset that we need to preserve, by continuing to offer entry level positions, which are of considerable strategic importance,” notes Mr. Marcoux.
CGI employs 31,000 people spread out in 125 offices, 20 percent of which are concentrated in eight local sites servicing 500 clients in the Greater Montréal region. The company is already the seventh largest in the world in its sector, but plans to double in size in the coming three to five years.
From left to right: Mr. Claude Marcoux (senior vice-president and general manager, Province of Québec) and Mr. Renaud Caron (senior vice-president - strategic development)
Industry leaders SAP
Creative Montréal businesses* > Gsmprjct° created the first interactive telescope, used in the Burj Khalifa in Dubai, the world’s tallest building > Space & Dream produced the first immersive film presented on a giant and itinerant sphere, where the spectator stands
Greater Montréal is the ideal place to manage a data center > Electricity costs are almost half as much as they are in the average North American city for projects that require a large amount of power (3MW to 50 MW) such as data centers > A humid continental climate that is ideal for server farms > International players: Bell, CGI, Fujitsu, CSC, HP, IBM and OVH.com
2.1.2 Multimedia Greater Montréal is recognized worldwide as an unparalleled videogame development and publishing center due to the presence of giants such as Electronic Arts, Ubisoft, Warner Brothers and others.
> B iztree created the Business-ina-box, which facilitated the lives of millions of business people, by offering access to a vast collection of legal and commercial document models, in French, English, Spanish and Chinese *Source: MONTRÉAL PREM1ÈRE (www.montrealprem1ere.com)
ICT aerospace companies > Greater Montréal, along with Seattle and Toulouse, is one of the three global aerospace poles > B ell Helicopter-Textron, Bombardier, CAE, Pratt & Whitney are one of the key players with locations in the area > Business opportunities for ICT businesses such as CAE, CMC Electronics Esterline, MacDonald Dettwiler and Associates (MDA) and SITA, to name a fewet
19
Greater Montréal also hosts several businesses in other multimedia and digital production areas, including Sid Lee, which offers innovative interactive marketing services.
Greater Montréal, the North American capital in digital arts and immersion > D ynamic actors working to promote the sector include Le Conseil québécois des arts médiatiques, Société des arts technologiques (SAT), MUTEK > International festivals Elektra, Montréal en lumières, MUTEK > Creative businesses Agence TOPO, Création Ex Nihilo, Molior, Moment Factory, Nurun, Photonic Dreams, Sid Lee and TIND
Video game companies
by employment, Greater Montréal, 2011 Companies
Employment
Ubisoft
2,000-2,999
Video game development and publishing
France
Electronic Arts
750-999
Video game development and publishing
US
Babel Media
250-499
Post-production services for the video game industry
UK
Behaviour
250-499
Video game development and publishing
Canada
Gameloft
250-499
Video game development and publishing
France
250-499
Video game development and publishing
Japan
VMC
250-499
Post-production services for the video game industry
US
Funcom
100-249
Video game development and publishing
Norway
Ludia
100-249
Video game development and publishing
UK
THQ
100-249
Video game development and publishing
US
Warner Bros.
100-249
Video game development and publishing
US
Eidos (Square Enix)
Activities
Country of origin
table 5
Multimedia businesses (excluding video games) by employment, Greater Montréal, 2011
It’s great to live in Greater Montréal! > A ccording to Mercer (2010), the region ranks 3rd in a total quality of life index of the largest North American metropolises.
Companies
Employment
Activities
Country of origin
YELLOW PAGES
1,000-1,999
Multimedia publications
Canada
Canoë
250-499
Multimedia publications
Canada
Sid Lee
250-499
Interactive marketing services
Canada
Beyond the Rack
100-249
E-commerce
Canada
Ciné Groupe Toontek
100-249
Animation studio
Canada
Nurun
100-249
Digital services
Canada
Sono Vidéo
50-99
Multimedia solutions
Canada
Tonik Groupimage
50-99
Digital services
Canada
Toutenkartoon
50-99
Digital service
France
Vortex Solution
50-99
Web solutions
Canada
Research portal
US
1-49
Table 6
Industry leaders
2.1.3 Software The Montréal software development industry is highly diversified, with numerous companies developing and publishing solutions that target a variety of economic sectors. These include Autodesk, Mediagrif Interactive Technologies, Morgan Stanley, Nuance Communications and SAP.
ICTs in the financial sector > 100,000 jobs in 3,000 businesses1 > The Montréal Stock Exchange specializes in derivative products > ICT business opportunities that Desjardins, Morgan Stanley, Société Générale and Standard Life have taken advantage of. 1 “The Financial Services Sector in Montréal: A North American Leader,” Montréal International and the International Financial Center of Montréal, 2008
Software development and publishing companies by employment, Greater Montréal, 2011 Companies
Employment
Activities
Country of origin
Autodesk
250-499
2d and 3D modeling software
US
Morgan Stanley
250-499
Software for the financial sector
US
Nuance Communications
250-499
Digital imaging solutions and voice recognition and synthesis software
US
SAP
250-499
Enterprise management software
Germany
Mediagrif Interactive Technologies
250-499
E-Commerce software
Canada
Dassault SystEms
100-249
3D software for various sectors
France
ESI Technologies
100-249
Software for the health and business sectors
Canada
Forensic Technology
100-249
Security software
Canada
Logibec
100-249
Software for the health and social services sector
Canada
Oracle
100-249
Software for various sectors
US
Presagis
100-249
Modeling and simulation software
Canada
SIR Solutions
100-249
Retail management software
Canada Table 7
testimony
8D
Technologies, a multidimensional success
Founded in 1996, 8D Technologies is a world leader in the design and development of multifunctional, wireless, intelligent, machine-to-machine (M2M) point-of-sale systems which are used primarily in urban transportation. In 2000, 8D Technologies transformed itself from a computer services company into a product, solutions and services marketing organization. The company became mostly known in Montréal when it installed its automated parking management system (8D APMS™), which is one of the most advanced of its kind, winning several prizes.
“ We are looking for projects that enable
us to leverage the possibilities of our wireless, solar powered management and payments platform. At first we were going to license the product. When we became aware of its full potential, we chose instead to create products that take advantage of the platform’s functionality,” says Isabelle Bettez, the company’s president and CEO.
This technology software and hardware platform, which is now being used on three continents including in Montréal’s
BIXI™ bicycle rental service, has been ranked among the “50 best inventions of 2008” by Time Magazine, in addition to winning the “Gold Edison Award” in 2009 in the energy and sustainability development category.
“ Our marketing strategy aims to both
to seek out new clients and qualified workers, as our main challenge right now is to reproduce our successes in related niches. Fortunately there is no shortage of talent in Greater Montréal to help us innovate at all levels,” notes Ms. Bettez.
The 8D platform facilities secure, real-time payments and the remote control and management of functions ranging from payment to rules application, as well as sensor and terminal controls in wireless or nonwireless environments. The platform thus has unlimited opportunities to grow into new markets. This in turn should translate into continued strong growth for the company during coming years.
testimony
BELL’s
leadership at the heart of Montréal’s digital economy From managed data services and cloud computing to the best wireless networks in the country, Bell is a catalyst for Montréal’s digital economy. The largest communications company in Canada, headquartered here since it opened in 1880, Bell employs more Information Technology professionals in Greater Montréal than any other company, providing business customers with the broadest array of communications services and IT solutions.
“ We are a leader in delivering 4G
wireless, IP broadband services, systems integration, data centres and more. In Montréal, we have the biggest, most experienced team of IT professionals to serve our customers, and we draw heavily on grads from the world class educational institutions in this area for our highly skilled workforce,”
says Tom Little, president of Bell Business Markets.
Those grads and their Bell colleagues manage the investment of billions of dollars on goods and services in this region to provide unmatched networks, innovative services and cutting-edge communications technologies. He cited the hundreds of millions of dollars Bell has invested in a national network of data centres, the largest of which is in the Montréal area. These centres – built to LEED Gold standards for environmental protection, like the Bell headquarters campus – offer co-location, managed data services and emerging cloud services to organizations of all sizes.
“We do all this with rigorous attention
to our environment. We are in fact the only Canadian carrier with an environmental management system with ISO 14001 certification,” notes Mr. Little.
23
2.2 Telecommunications services The presence of several large players puts Greater Montréal’s telecommunications sector at the leading edge of the latest technologies. Canadian companies dominate the sector. However Greater Montréal has also been welcoming an increasing number of foreign firms.
Telecommunications firms
by employment, Greater Montréal, 2011 Companies
Employment
Activities
Country of origin
Bell
5,000+
Telephone services, wireless telecommunications services, high-speed Internet services and digital television
Canada
Telus
3,000-4,999
Telephone services, wireless telecommunications services, Internet services and digital television
Canada
Vidéotron
3,000-4,999
Telephone services, wireless telecommunications services, high-speed Internet services, digital television and multimedia development
Canada
Cogeco
1,000-1,999
Telephone services, high-speed Internet services and digital television
Canada
Ericsson
1,000-1,999
Telephone services and wireless telecommunications services
Sweden
ADP
250-499
Hosting and data processing
US
Allstream
250-499
IP-based telecommunications services for businesses
Canada
Prestige Telecom
250-499
Technical and professional services for engineering, design, construction and implementation of wireless and landline networks
Canada
Rogers Communications
250-499
Telephone services, wireless telecommunications services and high-speed Internet services
Canada
Shaw Direct
250-499
Digital television services
Canada
Tata Communications
250-499
Cable telecommunications services specialized in emerging markets
India Table 8
Industry leaders
2.3 Manufacturing The Greater Montréal region’s economic synergies and dynamism have attracted numerous ICT manufacturing firms in the aerospace, military, transport and health sectors. These include Canadian companies such as CAE, Matrox, MDA and foreign players such as Alstom, Covidien and Esterline CMC Electronics.
We know Photonics-optics! > Host city for Photonics North 2012 > A vast base of businesses in the photonics-optics industry. These include ABB, Art Advanced Research and Technologies, Avensys, Delta photonics, EXFO, Forensic Technology, LxData, MPB Technologies, Perkin Elmer Optoelectronics and Silonex.
Microelectronics in the Greater Montréal region, a history of success > The region is part of the American northeast micro-electronics corridor > Dynamic businesses Teledyne-Dalsa, IBM-Bromont, Esterline CMC Electronics, Matrox, MPB, Perkin Elmer and Octasic > Dynamic research groups - Le Regroupement stratégique en microélectronique (ReSMIQ) - Le Regroupement québécois sur les matériaux de pointe - MiQro Innovation Collaborative Center (C2MI)
Société des arts technologiques (SAT)
25
ITC manufacturers
by employment, Greater MontrĂŠal, 2011 Employment
Activities
Companies
Country of origin
CAE
3,000-4,999
Manufacturer of integrated modeling, simulation and training solutions for the global civil and military aviation, health and mining sectors
Canada
Esterline CMC Electronics
1,000-1,999
ICT manufacturer for the aerospace and defense market
US
MacDonald, Dettwiller and Associates (MDA)
500-749
ICT defense sector manufacturer
Canada
Matrox
500-749
ICT manufacturer for the computer graphics, video and imaging sectors
Canada
AdvAntech AMT
250-499
ICT telecommunications sector manufacturer
Canada
Alstom
250-499
ICT transport sector manufacturer
France
Covidien
250-499
ICT manufacturer for the medical sector
US
Miranda Technologies
250-499
ICT broadcast sector manufacturer
Canada
Nokia
250-499
ICT telecommunications sector manufacturer
Finland
Paradox
250-499
ICT security systems manufacturer
Canada
SITA
250-499
ICT air transport sector manufacturer
Switzerland
EXFO
100-249
Manufacturer of testing and measurement systems for telecommunications networks
Canada
Honeywell
100-249
ICT manufacturer for the energy and security sectors
US
Teledyne-Dalsa
100-249
ICT manufacturer for the medical imaging, scientific and industrial sectors
Canada
Terminal & Câble
100-249
Manufacturer of all sorts of cabling, as well as battery, automotive and military sector cables
Canada
Ultra Electronics
100-249
ICT defense sector manufacturer
UK Table 9
Industry leaders
2.4 Wholesale and repair The size and breath of the ICT cluster in Greater Montréal can be seen by the number of wholesalers located in the area.
ICTs in the health sector > Montréal possesses numerous health related research establishments. These include:
ICT wholesalers and repairers by employment, 2011
Employment
Activities
Country of origin
Bureau en Gros
1,000-1,999
Distributor of office products
US
Future Electronics
1,000-1,999
Distributor of semiconductors and passive interconnection and electromechanical components
Canada
Insight
250-499
Distributor of computer and software products
US
PC Mall
250-499
Distributor of computer and software products
US
Canon
100-249
Distributor of cameras and optical equipment
Japan
Hartco
100-249
Distributor of IT products, services and solutions
Canada
Xerox
100-249
Distributor of office, printing and graphic arts products
US
Companies
- École de Technologie Supérieure: Imaging and orthopedics laboratory
Table 10
- É cole Polytechnique de Montréal: Biomedical Science and Technologies Research Centre (GRSTB), Polystim neurotechnologies Laboratory
- U niversité du Québec à Montréal : NanoQam
> More than 350 innovative and specialized business2 including:
- U niversité de Montréal : Institute of Biomedical Engineering, Laboratory of Biorheology and Medical Ultrasonics
- O ther: Centre for Interdisciplinary Research in Rehabilitation of Greater Montréal (CRIR), National Reasearch Council (NRC) Industrial Materials Institute
- A rad, CAE, Clemen Technologies, Ovidien, El ekta (Resonant Medical Inc.), Émoi, ESI Technologies, IMS Brogeant, Logitech, MédiSolution, Medtronic CryoCath LP, MOXXi Medical, Noveko, PharmaLaser, Telus Health, Skeltex Technologies and Zimmer
- M cGill University: Center for Biorecognition and Biosensors, Institute for Advanced Materials
Source: Invest in Canada, « Medical devices, Canada’s competitive advantages », 2012
2
ICT businesses are well-entrenched in the various sectors of the greater Montréal economY > I rosoft, a specialist in integrated document management since 1995 > 8 D Technologies, a world leader in the design and development of the most advanced intelligent wireless, M2M, multi-function point of sale systems and solutions > D ruide Informatique, a leader in linguistic software > L egal Suite, a specialist in legal software > S ologlobe, a leader in material management solutions for storage, distribution and manufacturing
testimony
Irosoft,
a world leader in legislation management systems “ When we started our company in 1995,
our primary focus was on computer and operations research. However in 1997, we began to specialize in the legal sector. Our first mandate was the conversion of Québec laws and regulations into a system that responded to international norms. Today, because we are able to offer a complete legislative information management system, we have built up a global reach,” says Alain Lavoie, Irosoft’s president.
In fact, Irosoft, which is one of the rare computer technology companies specialized in the legal sector, has so far completed mandates in more jurisdictions than any other.
“ Due to Québec’s specificity, we have also
acquired the capacity to manage legislation in a multilingual environment. This has given us an additional advantage when
From left to right: Mr. Alain Lavoie (president and co-founder) and Mr. René-Luc Morin
competing new mandates. It should be noted that several Canadian legislative systems are considered models elsewhere in the world,”
adds René-Luc Morin, vice-president and co-founder.
Irosoft’s other major activity is integrated document management (IDM). Its custom solutions enable clients to better take advantage of the richness and intelligence contained in their physical and digital documents. Irosoft, which has a reputation for being extremely reliable and respectful of customer budgets and deadlines, grew by 10% in 2011 and expects to do even better in the future.
“ Evidently, the Greater Montréal region’s
strong ICT sector has been a big help to us. In fact I am convinced that the sector will grow even further, due to efforts made on such projects as Montréal Digital Metropolis, which aims to provide the region with the latest ICT infrastructure,” says Mr. Lavoie.
concordiA UNIVERSITY
29
3
Labor and training
3
Labor and training
Greater Montréal possesses a growing ICT labor pool and an-up-and-coming generation of young recruits from the best academic programs and educational establishments.
3.1 A multitude of professionals and fields of expertise The 120,000 employees in Greater Montréal’s ICT industry include a large diversity of competencies. The following table illustrates the main professions that can be found in the region.
Main professions based on the number of jobs (in thousands) Greater Montréal, 2010
Information Systems Analysts and Consultants
28.3
Electrical and Electronics Engineers
23.1
User Support Technicians
14.0
Computer Network Technicians
6.8
Electrical and Electronics Engineering Technologists and Technicians
6.5
Web Designers and Developers
5.9
Computer Programmers and Interactive Media Developers
5.3
Telecommunications Installation and Repair Workers
4.9
Database Analysts and Data Administrators
3.3
Electronics Assemblers, Fabricators, Inspectors and Testers
2.8
Telecommunication Carriers Managers
2.8
Software Engineers and Designers
2.3
Computer Engineers
2.3 Table 11
The high quality of the Montréal region’s ICT professionals is attribu table to its vast network of superior educational establishments which are leaders in their fields of expertise.
testimony
Morgan Stanley Canada,the
most technologyoriented bank Morgan Stanley, one of the world’s largest investment banks and a financial services leader, opened a technology center in the Cité du Multimedia in 2008. The center, which employs more than 450 software developers, engineers and architects, is Morgan Stanley’s only technology centre in Canada and one of a small number of similar operations across diverse global sites including India, China and Hungary.
“ The Firm chose to locate in Montréal
because of its financial tradition and highly-skilled talent base,” notes Alan Vesprini, Morgan Stanley Canada’s executive director.
As a leading global financial services firm, Morgan Stanley provides a wide range of investment banking, securities, investment management and wealth management services. However, the Montréal center is unique in that it is purely a technology centre with no front office or operations presence, unlike the other centres. It focuses on researching, developing and implementing exclusive information technology tools and applications used by the Firm’s business divisions in the global financial markets.
“ Due to the technical nature of the work
we do here, Morgan Stanley is more in competition for talent with the large ICT players than it is with other financial institutions. We support the Firm’s business by providing technology solutions and support for Fixed Income, Securities Processing, Investment Management, Enterprise Data, Enterprise Infrastructure, Technology and Information Risk and Corporate Technology,” says Mr. Vesprini.
The technology centre maintains close relationships with the universities in the Greater Montréal region. In addition to campus recruitment activities the centre regularly presents projects and competitions to students, in order to identify students who demonstrate innovative thinking and creative solutions. In the past three years, Morgan Stanley has hired several dozen graduates with plans to increase that number in 2012.
Labor and training
école de technologie supérieure (éts)
33
3.2
Greater Montréal is Canada’s innovation capital - far more money is devoted to university research (more than $5 billion since 2005) than in any other large Canadian metropolitan region.
Training establishments: a superior academic network Greater Montréal stands out for the breath of its educational establishments dedicated to ICT training, which is available in both official languages. These include ten of its eleven universities, numerous colleges, professional schools3 and innumerable research centers. These impressive academic capabilities place the region among North America leaders, for its intellectual vitality and student capital.
University research fundings ($ billions) Top 5 largest Canadianfundings metropolitan 2005-2009 University research ($areas, billions) Top 5 largest Canadian metropolitan areas, 2005-2009
MONTRÉAL TORONTO VANCOUVER
Main universities offering ICT programs:
OTTAWA
Engineering and scientific research institutions
CALGARY
w École Polytechnique de Montréal
0
w École de technologie supérieure (ÉTS)
1
Full-service universities w Concordia University w Université de Montréal w Université du Québec à Montréal (UQAM) w McGill University w Université Sherbrooke – Longueuil Campus
Business School w HEC Montréal
3
4
5
6 chart 7
w Institut national de la recherche scientifique (INRS)
w TÉLUQ (Télé-Université)
2
3
his part presents only some examples. To T obtain a detailed listing of study programs by university, collegial or professional institutions, please consult the « Répertoire des formations initiales en technologies de l’information et des communications », 2011 of TECHNOCompétences.
Labor and training
3.3 A new generation, ready to take on industry challenges A pool of highly qualified workers, ready to take their place in Greater Montréal’s ICT industry, assures key players that they will have the qualified
labor available that they need to sustain their growth. The tables below list the ICT-related training programs and provide an idea of the number of enrolments and diplomas awarded at the university level (1st, second and third cycles)4 , technical colleges (Diploma of Collegial Studies (DECs)) and professional schools (Diploma of Professional Studies (DPSs)).
Number of ICT enrolments, university level for a selection of programs, Greater Montréal, 2010 P Bachelors
Masters Doctorate
Total
ICT Programs Electrical, electronics and communications engineering
2,268
572
461
3,301
Computer engineering and construction
571
176
75
822
Management information
147
-
-
147
Computer sciences
2,209
910
327
3,446
Sub-total
5,195
1,658
863
7,716
Graphic arts (graphic communications)
704
-
-
704
Engineering physics
170
37
49
256
Mathematics
853
138
160
1,151
Applied mathematics
14
23
33
70
Probability and statistics
55
28
23
106
337
115
206
658
Sub-total
2,133
341
471
2,945
TOTAL ENROLMENTS
7,328
1,999
1,334
10,661
ICT-Related Programs
Physical sciences
P: Preliminary data
TABLE 12
4
école politechnique
he list of enrolments at the university level T includes bachelors, masters and doctorate degrees.
testimony
Google, seduced by
the creativity of Québec’s metropolis “Do you want to have fun and take on new challenges? Would you like to change the world? If so, you have come to the right place,” says Google’s site, which seeks nothing less than to organize information on a global scale to make it useful and accessible to all, while offering a wide variety of services and marketing tools. Google presents itself as an atypical business that thrives on its unique culture of innovation, which it seeks to maintain, despite the exponential growth that the company has seen since its creation in 1998. The company, which opened its Montréal office in 2006, now employs 50 people there, a level that is expected to grow rapidly.
“ Montréal is recognized for its
creativity and its educated, bilingual and cosmopolitan workforce, and we want to help keep the city at the “avant-garde” of major trends. Entrepreneurs here have accomplished remarkable things in the
ICT sector; the ecosystem is particularly favorable to emerging businesses. We want help build on that potential,”
says Nicolas Darveau-Garneau, general manager of Google Québec, a Montréaler originally from Chicoutimi, who has just come back to the metropolis after having spent nine years in New York and eight years in Silicon Valley.
In the spring of 2011 Google launched the Get Your Business Online (www.gybo.ca) web-site, which facilitates domain name registration and provides site building services and free hosting for the first year.
“ When you recognize that 86% of
Québecers do online research before buying, it quickly becomes obvious that businesses need a Web presence as part of their marketing efforts,” says Mr. Darveau-Garneau.
Labor and training
37
Number of ICT diplomas awarded, university level for a selection of programs, Greater MontrĂŠal, 2010 P
Bachelors
Masters Doctorate
Total
ict programs Electrical engineering, electronics and communications
427
193
66
686
Computer engineering and computer construction
115
41
12
168
Information management
60
-
-
60
Computer sciences
395
192
35
622
Sub-total
997
426
113
1,536
Graphic arts (graphic communications)
131
-
-
131
Engineering physics
30
7
5
42
162
44
20
226
2
8
3
13
Probabilities and statistics
12
3
1
16
Physical sciences
59
28
26
113
396
90
55
541
1,393
516
168
2,077
ICT-Related Programs
Mathematics Applied mathematics
Sub-total TOTAL DIPLOMAS AWARDED P: Preliminary data
TABLE 13
Labor and training
Over time, ICT has become a choice sector to specialize in or to reorient one’s career. The Greater Montréal education network offers significant continuing-education opportunities. These provide ICT businesses with access to a labor pool that is up-todate in the latest technologies. Services are offered both in public schools and through private training facilities such as the NAD Centre, which specializes in 3D animation and visual effects for the movie and electronic entertainment industry. > More than 140 Attestations of Collegial Study (ACSs) options in ICT subjects are available, with 1,800 students enrolled in 2010. > At the university level, more than 1,140 students were registered in 23 certificate programs, and 17 specialized graduate diplomas (D.E.S.S.) and microprograms in ICT subjects in 2010. Source: MELS (Québec’s Ministry of Education), 2010
MCgill UNIVERSITY
39
Number of ICT enrolments and diplomas awarded, Diploma of Collegial Studies (DEC) for a selection of programs, Greater MontrĂŠal, 2010P Program title
Enrolments
Diplomas
Graphics
860
172
3D animation and image system technology
374
33
Multimedia integration technology
780
102
Computer technology
987
310
Electronics technology
662
87
Industrial electronics technology
619
91
Computerized systems technology
181
33
4,463
828
TOTAL P: Preliminary data
TABLE 14
Number of ICT enrolments and diplomas awarded, Diploma of Professional Studies (DPS) for a selection of programs, Greater MontrĂŠal, 2010P
Program title
Enrolments
Diplomas
1,849
518
350
73
86
68
453
118
Computer support
1,623
342
TOTAL
4,361
1,119
Electromechanics of automated systems Installation and repair of telecommunications equipment Cable and circuit assembly Infographics procedures
P: Preliminary data
TABLE 15
SAP
41
4
ICT-related research organizations, associations and groups
4
ICT-related research organizations, associations and groups
Greater Montréal hosts numerous ICT-related research institutions, associations and groups.
The research institutions focus on research and knowledge-sharing, while the 20 or so associations and industry groups work to support their members’ growth and competitiveness and to defend their interests on the public policy front.
Société des arts technologiques (SAT) - IMMERSIVE DEVICE (Cyclorama)
The Montréal region’s ICT cluster is represented by TechnoMontréal, whose mission aims to bring together and support the industry’s players around common goals and concerted actions to accelerate and optimize the industry’s competitiveness, growth and influence. TechnoMontréal works in collaboration with a number of associations and institutional partners listed as follows.
43
List of the main ICT associations and groupings in Greater Montréal ICT associations and groups
Description/Mission
Alliance Numérique
Supports the organization’s members’ growth and competitiveness and increases Québec’s international visibility as a center of excellence in the creation, production and distribution of interactive digital content.
Association de Sécurité de l'Information du Montréal Métropolitain (ASIMM)
Sensitizes the public and private sectors about the importance of information security.
Association pour le Développement de la Recherche et de l’innovation du Québec (ADRIQ)
To support and promote technological innovation in Québec in order to increase the competitiveness of businesses here and abroad.
Canada’s Medical Technology Companies (MEDEC)
To effectively defend the industry’s interests through its determination and leadership.
Canadian Advanced Technology Alliance (CATA)
Supports members in the attainment of their growth objectives by creating a crossCanada collaboration system.
Centre de Recherche Appliquée en TI (CRIM)
To develop and transfer technologies and knowledge, to highlight public and private businesses and organizations’ products and services and to contribute to getting them to market.
Centre d'Entreprises et d'Innovation de Montréal (CEIM)
To offer specialized management consulting and related services that assist in starting-up and developing information technology and life sciences businesses.
Centre Facilitant la Recherche et l'Innovation dans les Organisations (CEFRIO)
To contribute to turning Québec into a digital society through using technologies as social innovation and organizational levers.
Consortium en Innovation Numérique du Québec (CINQ)
A consortium that helps to stimulate the financing and development of innovative, multimedia-related applied research and projects, through collaboration between industrial partners and research establishments. TABLE 16
ICT-related research organizations, associations and groups
45
List of the main ICT associations and groupings in Greater Montréal (cont’d) ICT associations and groups
Description/Mission
Electronic Industry Group (RIE)
To unite electronics sector stakeholders, promote their interests and to stimulate the industry. Its mission is to create a solid meeting and exchange platform through which members can increase and improve their business prospects.
Information Technology Association of Canada (ITAC)
Promotes and highlights the ICT sector’s importance and its special contribution to the Canadian economy and society in general.
International Council of Graphic Design Organizations (ICOGRADA)
The council’s mission, vision and fundamental values are personified in the phrase “Leading creatively,” and are manifested by members through various activities that use design as a source of progressive change.
PROMPT
Strengthens the ICT industry through partnerships between industry and university R&D facilitates.
Quebec Association of IT Freelancers (AQIII)
To unite the maximum number of experienced independent ICT workers, to leverage a solid network, all while respecting members’ freedom to work independently.
Québec Film and Television Council (QFTC)
Contributes to Québec’s development and competitiveness as a center of world-class cinematographic and television production.
Quebec Photonic Network
To accelerate Québec’s optics-photonics industry’s economic development.
Québec Technology Association (AQT)
Supports members in the attainment of their growth objectives and facilitates their access to best business practices.
Réseau ACTION TI
To unite and mobilize Québec information technology sector players, and to provide them with opportunities to meet and improve their knowledge and competencies. The organization also helps highlight the quality of its members’ achievements and to improve IT’s visibility in the province.
Société des Arts Technologiques (SAT)
A multi-disciplinary research, creation, production and training center dedicated to the conservation and development of digital culture.
TECHNOCompétences
A sectoral committee that supports and promotes development of Québec’s ICT sector’s labor pool and employment opportunities for those within it, so that its expertise is recognized globally. TABLE 16
ICT-related research organizations, associations and groups
Selection of the main ICT research institutions in Greater Montréal* ICT research ORGANIZATIONS
COLLEGE/University affiliation
Advanced Research Center in Microwaves and Space Electronics (POLY-GRAMES)
École Polytechnique
Center for Advanced Systems and Technologies in Communications (SYTACOM)
ÉTS – INRS – Concordia University – Université Laval – McGill University
Center for Intelligent Machines (CIM)
McGill University
Center for Signal Processing and Communication (CENSIPCOM)
Concordia University
Center of Research in Radiofrequency Electronics (CREER)
École Polytechnique
Centre Collégial de Transfert Technologique en Optique Photonique (OPTECH)
Cégep André-Laurendeau – Cégep de La Pocatière – John Abbott College
Centre d'Innovation en Microélectronique du Québec (CIMEQ)
Collège Lionel-Groulx
Centre for Interdisciplinary Research in Music Media and Technology (CIRMMT)
Université de Montréal – McGill University
Centre for Pattern Recognition and Machine Intelligence (CENPARMI)
Concordia University
Centre Interuniversitaire de Recherche sur la Science et la Technologie (CIRST)
Université de Montréal – Université de Sherbrooke – UQAM
Computer Systems Architecture Laboratory (LASI)
ÉTS
CRSNG/Ubisoft Industrial Research Chair in Learning Representations of Immersive Video Games
Université de Montréal
Game Research Lab (GR@M)
McGill University
Group for Research in Decision Analysis (GERAD)
École Polytechnique – HEC – Université de Montréal
Groupe de Recherche en Conception Assistée par Ordinateur (GRCAO)
Université de Montréal
Groupe de Recherche en Réseautique et Informatique Mobile (GRIM)
École Polytechnique
Groupe de Recherche Interuniversitaire en Tutoriel Intelligent (GRITI)
Bishop's University – Université Laval – Université de Montréal – McGill University
Hardware Verification Group (HVG)
Concordia University
Hexagram - Institute for Research-Creation in Media Arts and Technologies
Concordia University – UQAM
InterNeg Research Centre
Concordia University
47
Selection of the main ICT research institutions in Greater Montréal* (cont’d) ICT research ORGANIZATIONS
COLLEGE/University affiliation
Interuniversity Research Centre on Entreprise Networks, Logistics and Transportation (CIRRELT)
École Polytechnique – HEC – Université Laval – UQAM
IT Applied Research Centre (CRIM)
ÉTS – HEC – INRS – Concordia University – Université de Montréal – McGill University – UQAM
Laboratory fo Research on Technology for Ecommerce (LATECE)
UQAM
Laboratory for Imagery, Vision and Artificial Intelligence (LIVIA)
ÉTS
Management Networks and Telecommunications Research Laboratory (LAGRIT)
ÉTS
Microelectronics and Microsystems Research Group (GR2M)
École Polytechnique
Mobile Computing and Networking Research Laboratory (LARIM)
École Polytechnique
Multimedia Research Laboratory (LABMULTIMEDIA)
ÉTS
NanoRobotics Laboratory
École Polytechnique
NSERC / Ultra Electronics TCS Industrial Research Chair in High Performance Wireless Emergency Tactical Communications
ÉTS
NSERC/Bell Canada Industrial Research Chair in Performance and Resource Management in Broadband xDSL Access Networks
McGill University
NSERC/Bell Industrial Research Chair in Ultra-High Bit Rate Optical Transport and Access Networks
McGill University
NSERC/Ericsson Industrial Chair in Next Generations Mobile Networking Systems
École Polytechnique
NSERC/Hydro-Québec Industrial Research Chair in Interactive Information Infrastructure for the Power Grid
McGill University
Perception and Robotics Research Group (GRPR)
École Polytechnique
Power Electronics and Industrial Control Research Group (GREPCI)
ÉTS
Regroupement Stratégique en Microsystèmes du Québec (ReSMIQ)
École Polytechnique – ÉTS – Concordia University – Université de Montréal – Université Laval – McGill University – UQAM – UQTR
Software Engineering Management Research Laboratory (GELOG)
ÉTS
Telecommunications and Microelectronics Integration Laboratory (LACIME)
ÉTS
Telecommunications Software Lab
Concordia University
Wireless Design Laboratory
Concordia University
*To obtain an exhaustive list of all the universities and colleges’ research activities, please refer to their Internet sites.
TABLE 17
49
5
Operating costs
5
Operating costs
Operating costs represent a significant portion of ICT businesses’ overall expenses. For example salaries, office space and energy costs in the Montréal region are highly competitive. Globally, Greater Montréal is among the regions where ICT organizations benefit from the most advantageous operating costs in North America.
5.1 The most advantageous operating costs in North America According to KPMG (2011), Greater Montréal is ranked 1st among the top 20 large North American metropolises for the competitiveness of total operating costs incurred by businesses in the region. Chart #8 shows the substantial savings that can be achieved, notably with regards to labor, energy and office space costs.
Total cost of operating an ICT business Average sub-sectors Total costof offive operating an ICT(Montréal business= 100) Twenty of the largest North American metropolises, 2011 Average of five sub-sectors (Montréal = 100) Top 20 of the largest North American metropolises, 2011 MONTRÉAL TORONTO ATLANTA MIAMI DALLAS ST. LOUIS PHOENIX HOUSTON MINNEAPOLIS DETROIT DENVER PHILADELPHIA CHICAGO WASHINGTON SEATTLE SAN DIEGO BOSTON LOS ANGELES NEW YORK SAN FRANCISCO 90
92
94
96
98 100 102 104 106 108 110 112 114 116 CHART 8
testimony
Ludia , a leader in
online gaming “Montréal is overflowing with creative talent and the world is starting to take notice,” reads the Web-site of Ludia, a publisher of digital gaming applications for the general public.
“ A good number of the most well
received video games of recent years were developed in Montréal. This contributes significantly to the metropolitan region’s attractiveness to tech-savvy youngsters. Furthermore, things here are on the move and the cost of living remains relatively low – a dream environment for those getting started in life,” says Alexandre Thabet, president and co-founder of Ludia
One Ludia’s main focuses is producing games inspired by television shows such as “The Price is Right,” “The Amazing Race,” and “Who wants to be a Millionaire?” The company, which is considered one of the major players in its niche in Québec, is also one of the 100 most important developers of games for Facebook and the iPhone.
Growth has been rapid, with sales doubling each year since 2008 and breaking through the $10 million level in 2011. The quick pace is expected to continue with billings projected to increase to between $15 to $30 million in 2012, due in part to the launch of 20 new games, including two original creations.
“ We are highly confident; our products
can be developed rapidly at a far lower cost than the more well-known titles. In addition our expertise relates to social media and mobile platforms, the two fastest growing sectors in the gaming industry,” notes Mr. Thabet.
Founded in 2007, Ludia was acquired in 2010 by FremantleMedia, a British company, one of the world’s largest producers of televised content, a development which should help the company penetrate the European and Asian markets.
Operating costs Société des arts technologiques (SAT)
5.2 A favorable cost advantage Of the five sub-sectors taken into account by KPMG (2011), businesses whose primary activities relate to testing electronic systems, developing software and designing Web and multimedia content, benefit from the most favorable cost advantages relative to the average of the other 19 large North American regions surveyed.
5.3 Competitive specialized labor costs
Greater Montréal’s cost advantage (%) relative to the average Greater Montréal’s cost advantage (%) ICT businesses can benefit from of 19toother largest North American relative the average of the 19 other largest metropolises, 2010
highly competitive salaries in Greater Montréal to reduce their overall operating costs. Table 18 shows clearly that for a vast range of ICT jobs, salaries are between 3% and 18% lower than those in other large North American urban centers.
North American metropolises, 2010
ELECTRONIC SYSTEMS TESTING SOFTWARE DEVELOPMENT WEB AND MULTIMEDIA CONTENT DEVELOPMENT TELECOMMUNICATIONS EQUIPMENT ELECTRONICS ASSEMBLY 0%
2%
4%
6%
8%
10 %
12 %
14 %
Exchange rate: CAN $1 = US $1 CHART 9
53
Average annual salary ($), typical jobs by ICT sub-sector Selection of seven major cities specialized in ICT
MontrĂŠal
Toronto
Chicago
Seattle
Boston
San Francisco
New York
107,852
113,935
118,369
126,798
128,083
134,084
138,145
Microelectronics technician
49,996
52,909
46,539
48,858
49,948
52,732
50,354
Computer equipment engineer (hardware)
88,717
93,739
90,022
91,479
96,913
102,576
97,812
Optical engineer
85,961
90,829
86,943
88,281
93,505
99,051
94,367
Software developer
90,895
96,039
93,173
94,958
99,839
106,327
102,337
Software engineer
92,479
97,712
95,330
97,211
102,220
108,797
104,771
Software programmer
73,879
78,072
78,063
79,578
83,327
89,172
85,537
Video game programmer
88,640
93,658
93,409
95,204
100,099
106,597
102,603
Video game tester
66,744
70,546
68,656
71,799
73,868
79,104
75,864
Web-site developer
83,862
88,614
87,313
88,877
93,382
99,631
95,754
Systems administrator
82,361
87,028
84,604
86,095
90,409
96,547
92,733
Database administrator
89,963
95,055
97,203
99,174
104,291
110,945
106,889
Programmer-analyst
84,216
88,987
89,460
91,096
95,745
102,081
98,160
Network analyst
83,577
88,312
86,416
87,953
92,396
98,608
94,752
Telecommunications technician
66,734
70,536
70,491
71,540
73,820
79,902
75,950
Telecommunications engineer
85,007
89,822
85,944
87,247
92,400
97,909
93,252
Network technician
68,142
72,018
68,174
71,352
73,327
78,556
75,354
Jobs
Manufacturing R&D director (Technical)
Software
MultimEdia
Services
Telecommunications
Exchange rate: CAN $1 = US $1
TABLE 18
5.4
Average electricity rate ($CA/kWh – before tax) Ten of the largest North American metropolitan areas, April 1, 2011 Average electricity rate ($CA/kWh – before tax) Ten of the largest North American metropolitan areas, April 1, 2011
Clean, reliable and affordable electricity Québec is recognized as a region in which electricity is abundant and distributed at highly competitive prices. According to Hydro-Québec, Greater Montréal was ranked 2nd in 2011 among ten of the largest North American metropolises in this regard, with electricity prices near $0.07/kWh before taxes.
5.5 Affordable office space COSTS Office space prices in Greater Montréal are highly competitive. According to Cushman & Wakefield (2011), the average yearly net rent paid in 2010 was approximately $20 per square foot, while office space in the other large North American areas averaged more than twice as much ($43.20 per square foot).
LUDIA
SEATTLE MONTRÉAL HOUSTON MIAMI CHICAGO DETROIT TORONTO SAN FRANCISCO BOSTON NEW YORK
0,00 0,01 0,02 0,03 0,04 0,05 0,06 0,07 0,08 0,09 0,10 0,11 0,1 CAN $1 = US $1
55
Average rent for office space ($/square foot/year)
Twelve of the largest North American metropolitan areas, 2010.
Average rent for office space ($/square foot/year)
Twelve of the largest North American metropolitan areas, 2010
MONTRÉAL TORONTO ATLANTA PHILADELPHIA HOUSTON CHICAGO SAN FRANCISCO LOS ANGELES(1) MIAMI BOSTON NEW YORK (2)
12 0,13 0,14 0,15 0,16 0,17 0,18 0,19 0,20
WASHINGTON 0
chart 10
5
10
15
20
25
30
35
40
45
50
55
60
65
(1) West (2) Downtown Exchange rate: CAN $1 = US $1 CHART 11
E-COMMERCE PLACE
57
6
Taxes and incentives
6
Taxes and incentives
Tax burdens are a key factor that businesses look at when choosing where to locate. Greater Montréal’s competitiveness in this regard is undeniable, particularly with regards to ICT companies, due to tax credits and other targeted incentives put in place to attract them.
6.1 Corporate taxes: the lowest in North America Greater Montréal’s success in attracting ICT businesses stems in large part from the fact that these benefit from one of the world’s most competitive tax environments. According to KPMG (2010) companies that specialize in services to businesses, IT services, or which conduct research and development in Greater Montréal, benefit from taxation levels up to one seventh of those in the average of other large North American cities. The Montréal region ranks 1st in this category in North America and 2nd in the world.
Total tax index for business service companies and IT service com (Average for United States metropolises = 100) Total tax index for business services companies and of the largest North American metropolitan areas, 2010 ITTwenty services companies (Average for United States metropolises = 100) Top 20 of the largest North American metropolitan areas, 2010
MONTRÉAL TORONTO ATLANTA PHOENIX DETROIT MINNEAPOLIS DALLAS HOUSTON MIAMI DENVER ST. LOUIS CHICAGO PHILADELPHIA WASHINGTON BOSTON NEW YORK SAN DIEGO LOS ANGELES SAN FRANCISCO SEATTLE 40
60
80
100
CHART 12
59
Total tax index for R&D companies (Average for United States metropolises = 100) Total R&DNorth companies Toptax 20 index of the for largest American metropolitan areas, 2010 (Average for United States metropolises = 100) Top 20 of the largest North American metropolitan areas, 2010
MONTRÉAL TORONTO PHOENIX MINNEAPOLIS DETROIT BOSTON MIAMI ATLANTA NEW YORK PHILADELPHIA CHICAGO DENVER WASHINGTON SAN DIEGO SEATTLE ST. LOUIS LOS ANGELES DALLAS HOUSTON SAN FRANCISCO 0
20
40
60
80
100
CHART 13
testimony
SAP Labs Canada, in constant expansion
SAP Labs Canada, which has had a presence in the metropolitan region since 1998, has just moved into the Cité du Multimédia, a new 550 m2 innovation center (Executive Briefing Center) which enables the company to service and counsel its clients and business partners and to innovate in a cutting-edge technology environment. SAP Labs Canada, a division of SAP Canada Inc., is an integral part of the SAP AG international network, a leader in enterprise resource planning. SAP’s mission is to help organizations of all sizes, in all sectors of activity, to improve their management models, business processes and by extension their competitive advantages and performance. The company now employs more than 54,000 people in 50 countries.
“ SAP Labs Montréal is recognized as
a center of excellence in In-Memory technology and software development, due to its SAP HANA® (High Performance Analytic Appliance) platform. For example the Trade Promotion Management application, which is used to plan, coordinate and manage marketing
and promotion activities, was developed right here in Montréal. Our field of expertise also includes the development of mobile applications,”
says Kirsten Sutton, managing director of SAP Labs Canada.
The metropolis is an excellent locale for SAP Labs Montréal, which has grown in twelve years from just five employees to close to 600, making it the company’s largest R&D center in eastern North America.
“ The metropolitan region has undeniable
advantages. These include a cosmopolitan, highly qualified workforce, competitive operating costs, an active research community, internationally renowned universities, reliable infrastructure, government assistance for electronic business development and location in a time zone that facilitates exchanges with both the Americas and Europe. It’s perfect for us!,” says Ms. Sutton.
PHOTO PUBLISHED WITH THE KIND PERMISSION OF Toni Chowdhury
61
6.2 Targeted and highly competitive incentives The Québec and Canadian governments offer over a dozen or so tax and financial advantages that favor ICT investments. Following is a list of the main programs.
Scenario ($) #1
6.2.1 Tax incentives
Hypothesis
R&D Tax Credits
The company is a foreign controlled private corporation
w R &D tax credits offered by the Québec and Canadian governments since the mid-1980s
20 eligible employees @ $50,000 per year.
w A 20% credit offered by the Canadian government and a 17.5% credit offered by the Québec government (refundable in Québec)
Sub-contract $200,000
w These two measures combined enable businesses to reduce their R&D related costs by more than 50%.
Salaries ($)
Scientific Research and Experimental Development (SR&ED) tax incentive program, 2011
100% of their work is related to admissible activities
Equipment: $150,000 Federal
Québec
1,000,000
1,000,000
Replacement amount @ 65 %
650,000
Sub-contractors(1)
200,000
Equipment
150,000
Québec SR&ED tax credits (2)
Federal credit @ 20% and Québec credit @ 17.5%
Total
100,000
-192,500 1,807,500
1,100,000
361,500
192,500
554,000
Notes: (1) In Québec only 50% of amounts paid to sub-contractors are eligible for the provincial credit. In addition, only the salaries and sub-contracting costs (50%) related to R&D give rights to R&D tax credits. Expenses related to machinery and equipment and general expenses are ineligible. (2) In the calculation of the combined credit, the provincial credit rate is reduced from the federal tax credit.
TABLE 19
Taxes and incentives
A Refundable Tax Credit for the Development of e-Business (CDAE) w A tax incentive offered by the Québec government since March 14th, 2008 w A 30% reimbursable tax credit on salaries and admissible activities(5) , up to a maximum of $20,000 per job, per year w This program remains in effect until December 2015
Refundable Tax Credit for the Production of Multimedia Titles w Offered by the Québec government since December 19, 2002 w This refundable credit applies to two categories of multimedia titles (see table 21) Category 1: Multimedia titles produced without having been the object of a specific order, and which are destined to be marketed Category 2: All other multimedia titles
Scenario ($) #2
A combination of the provincial refundable tax credit for the development of e-businesses (CDAE), and the Scientific Research and Experimental Development (SR&ED) tax incentive program, 2011 Hypothesis
A foreign controlled private company 20 eligible employees @ $50,000 per year 100% of their work is linked to activities admissible for CDAE and SR&ED
Salaries ($) Replacement amount @ 65 %(1)
w Available for foreign experts since 1999 w Tax exemption from taxable income in Québec for a maximum period of five years: 100% 75% 50% 25% 5
of salary for the first two years of salary for the third year of salary for the fourth year of salary for the fifth year
See the list of eligible activities in Appendix B
Québec
1,000,000
1,000,000
Total
650,000
CDAE Québec credit (2)
0
Federal SR&ED credit @ 20% and Québec CDAE credit @ 30%
1,650,000
1,000,000
330,000
300,000
630,000
Notes: (1) Limited by the business’s other expenses. (2) The CDAE does not include other R&D expenses TABLE 20
The value of credits for the production of multimedia titles Category 1 multimedia titles
Category 2 multimedia titles
Base credit
30% of the admissible salary expenses
26.25% of the admissible salary expenses
Bonus for availability in the French language
7.5% of the admissible salary expenses
Does not apply
Total
37.5% of the admissible salary expenses
26.5% of the admissible salary expenses
Tax Holiday for Researchers and Experts w Implemented for foreign researchers in 1987 by the Québec government
Federal
TABLE 21
63
SAP
Scenario ($) #3
A combination of the refundable provincial credits for the production of multimedia titles, and the federal Scientific Research and Experimental Development (SR&ED) tax incentive program, 2011 Hypothesis
A foreign controlled private company 20 eligible employees @ $50,000 per year 100% of their work is linked to activities admissible for the multimedia production program and the SR&ED The businesses is a specialized company The multimedia titles were not specifically ordered and are available in French
Salaries Replacement amount @ 65 % (1) Québec credit for production of multimedia titles (2)
Federal SR&ED credit @ 20% and the Québec credit for production of multimedia titles @ 30%
Federal
Québec
1,000,000
1,000,000
Total
650,000 0 1,650,000
1,000,000
330,000
375,000
705,000
Notes: (1) Limited by the business’s other expenses (2) The refundable credit for the production of multimedia titles does not include R&D TABLE 22
Taxes and incentives
PLACE DES ARTS
65
6.2.2 Financial incentives
Financial Assistance for Job Creation and Training Since 1998, Government of Québec technical and financial assistance has been available to help businesses meet their need for new talent This assistance can consist of: >U p to 25% of eligible costs for the implementation of a training program
> U p to 50% of costs incurred for the creation of a human resource department
w A special fund exists for job-creation “major economic initiatives”. To be eligible for and benefit from, among other things, the above mentioned contributions, a company must:
> Submit a project that will have a significant impact on regional employment or one that comes on the heels of a major investment, or > Create 50 new full-time, lasting jobs over a 24-month period.
National Research Council Canada (NRCC) - Industrial Research Assistance Program (IRAP) w This program, which specifically targets SMEs has been available for more than 60 years w Technological assistance for all stages related to the innovation process in order to advance an activity or product or to exploit it commercially
w The proposed solutions affect more than 10,000 SMEs per year and include:
> Technical and business advice
> Financial assistance
> Market intelligence
> National and international networking and linkage services
w T he program also cultivates partnership with over 100 regional organizations and 1,000 private suppliers allowing SMEs to connect with individuals and organizations capable of providing them with assistance
Program for the Attraction and Retention of Research Investment (PARIR) w A government of Québec program that seeks to support the attraction and implementation of private research activities in Québec w The subsidy may reach 15% of costs related to construction or adaptation of research infrastructure and for acquisition of equipment linked to these research spaces. w Developed as part of the Québec Research and Innovation Strategy, 2007-2010 The program was recently renewed in the 2010-2013 edition
67
7
Venture capital
7
Venture capital
ICT venture capital investments in Greater Montréal are broadly diversified and easily accessible for all sizes of projects and development phases. Due to the number of companies specialized in this area, between 2000 and 2010, more than 6,500 venture capital investments worth $5.3 billion were made in Greater Montréal. That amounts to 21% of all venture capital investments in Canada. Of these investments, 1,774 (or $2.4 billion worth) were ICT related – more than 45% of all venture capital invested in the Montréal region.
Accedian Networks a leader in growth mode! w C lose to $33 million in venture capital between 2006 and 2010
Beyond The Rack a private club for the online SALE OF clothes pays off! w Close to $37 million in venture capital in 2010-2011 w From launch to expansion w Strongest growth in Web sales in 2010-2011 according to Internet Retailer, a US magazine
Vantrix from its founding to its becoming a world leader in mobile video, this Montréal business attracted venture capital financing from various sources at each of its development stages w More than $40 million in venture capital between 2004 and 2010 w From launch to expansion w In Deloitte’s Technology Fast 50 rankings in 2010
w S tartup and another new development w T he largest supplier of performance guarantee solutions for Ethernet networks in the transporter class, that comprise more than 40,000 cellular sites in North America and 70,000 platforms sold around the world.
69
ICT Venture capital investments, by sub-sector Greater Montréal, 2000- 2010
ICT Venture capital investments, by sub-sector Greater Montréal, 2000- 2010
7% 1%
13%
Venture capital investments in the ICT sector by project phase
30%
Greater Montréal, 2000-2010
20%
Phase
29% ICT (Total) New development
Amount disbursed ($ THOUSANDS)
NUMBER OF INVESTMENTS
2,379,363
1,774
999,917
918
53,394
87
Communications and networking Software
Pre-startup
Computer and electronics equipment
Startup
417,870
394
Other new developments
528,653
437
Advanced developments
1,379,446
856
Expansion
1,269,227
757
Purchase or buy-back of the business
61,945
36
Recovery
30,800
50
Other phases
17,474
13
Internet Semi-conductors Other ICT services
chart 14
TABLE 23
Venture capital
Selection of venture capital companies active in the ICT sector Greater Montréal, 2011
Capital under management ($ thousands)
Amount of investment ($ thousands)
220,000,000
1,500 – n/d
Fonds de Solidarité des Travailleurs du Québec (FTQ)
8,200,000
n/d
Teralys
1,400,000
n/d
Business Development Bank of Canada (BDC)
815,000
250 – 10,000
Novacap Investments
765,000
5,000 – 15,000
Fondaction
600 000
250 - 10,000
Celtic House
500 000
15,000- 20,000
MMV Financial
400,000
1,500 – 10,000
TechnoCap
265,000
750 - 10,000
Telesystem (Propulsion Ventures)
167,000
1,000 – 3,000
JLA Ventures
133,000
5,000 – 15,000
Inovia
110,000
250 - 1,000
BDR Capital
100,000
n/d
Rho Canada
100,000
750 – 10,000
Desjardins Capital de Risque
n/d
n/d – 20,000
Investissement Québec
n/d
n/d
Anges Québec
n/d
400 (average)
Investor Caisse de Dépôt et Placement du Québec (CDPQ)
TABLE 24
71
MONTREAL/NEW MUSIC INTERNATIONAL FESTIVAL ((MNM), fEBRUARY 2011 - White Box, Purform Photo Gridspace © 2011
PLACE DES ARTS
73
APPENDICES
APPENDIX A: MAIN ECONOMIC INDICATORS SUMMARY The weight of Greater Montréal in Québec, according to the most recent available data
MONTRÉAL
QUÉBEC
MONTRÉAL’s WEIGHT
Population
3,859,318
7,907,375
48.8 %
Total employment
1,954,200
3,915,100
49.9 %
119,600
168,500
71,0 %
$9,085 M
$12,800 M
71.0 %
$806 M
$947 M
85.1 %
$2,380 M
$3,895 M
61.1 %
$24,503 M
$34,521 M
71.0 %
INDICATORS
ICT employment Real GDP of the ICT sector ($ millions 2002) Industrial R&D spendings in ICT* ICT exports* ICT sales* *Estimates (see Appendix B for more information regarding methodology)
75
APPENDIX B: METHODOLOGY NOTES Real GDP
Exports
Telecommunications services
The value of Greater Montréal’s ICT industry real GDP was estimated using a ratio of 71% (which corresponds to total employment in the sector in the region, relative to total sector employment in the province of Québec in 2010). This ratio was then applied to the value of real GDP in the province (Source: ISQ).
The value of exports generated by Greater Montréal ICT businesses was estimated using a ratio of the total value of exports of the five Greater Montréal administrative regions divided by the total exports of the province of Québec. This ratio was then applied to the value of all of the province of Québec’s ICT exports in 2010 (Sources: MDEIE, ISQ).
w 517-Telecommunications (total)
Index of the Greater Montréal ICT sector’s GDP growth relative to total GDP growth The growth index was calculated using data supplied by the Conference Board of Canada regarding Greater Montréal’s total GDP and of previous estimates.
Sales The value of Greater Montréal ICT businesses’ operating revenues was estimated using a ratio of 71% (which corresponds to total employment in the sector in the region, relative to total sector employment in the province of Québec). This ratio was applied to the value of operating revenues in the province in 2009 (Source: MDEIE).
Employment For the purposes of the present profile, the ICT sector was defined using sectors outlined in the three or four digit codes in the North American Industry Classification System (NAICS) as follows:
Manufacturing w 3 333-Commercial and service industry machinery manufacturing w 3 34-Computer and electronic product manufacturing w 3 359-Other electrical equipment and component manufacturing
IT services w 5112-Software publishers w 5 415-Computer systems design and related services
w 5 18-Internet service providers, Web search portals, and data processing services
Wholesale and repair w 4 173-Computer and communications equipment and supplies wholesaler-distributors w 4 179-Other machinery, equipment and supplies wholesaler-distributors w 5 324-Commercial and industrial machinery and equipment rental and leasing w 8 112- Electronic and precision equipment repair and maintenance Data for the US regions relate to Metropolitan Statistical Areas (MSA).
Research & Development The value of industrial R&D spendings in the Greater Montréal ICT sector was estimated using a ratio of total R&D spending in Greater Montréal’s five administrative regions, divided by total industrial R&D spending in the province of Québec (Source: ISQ). This ratio was applied to total industrial ICT R&D spending in Québec. (Source “Profil Statistique du Secteur des TIC 1997-2009,” MDEIE, 2010).
RECENT Investments Data regarding investments and employment stem from public announcements compiled by Montréal International. Some of the employment data were rounded off.
Training Preliminary 2010 data of MELS (Québec’s Minsitry of Education) were used in the tables included in this section. The numbers of enrolments and diplomas awarded also come from MELS and do no not take into account private ICT training schools. The ratios used to estimate the numbers of students in universities that are partially located in the Montréal region are: w INRS: 70% w TELUQ: 55% w Université de Sherbrooke: 10% Data regarding enrolments and DEP diplomas awarded include Francophone programs and their Anglophone equivalents. The selection of Diploma of Collegial Studies (DEC) and Diploma of Professional Studies (DEP) programs were drawn from «Répertoire des Formations Initiales en Technologies de l’Information et des Communications » published by TECHNOCompétences in 2011.
Operating costs The data were drawn from KPMG’s biennial study titled: “Competitive Alternatives.” Montréal International updated these data using the “Competitive Alternatives Interactive Cost Model” Internet tool, which was supplied by KPMG. This study
compares the operating costs businesses in more than 100 cities in ten countries: Germany, Australia, Canada, the United States, France, Italy, Japan, Mexico, the Netherlands and the United Kingdom. The study measures 26 significant cost elements related to geographic location in 17 types of businesses (electronic components assembly, shared services centers, precision components, software development, Web and multimedia design, telecommunications equipment, medical device manufacturing, clinical trials management, electronics systems testing, aerospace parts, automotive parts, pharmaceutical production, specialized chemical products, plastic products, biomedical R&D, food transformation and metal machining) over a period of 10 years.
Energy cost
For the present profile, five types of businesses from each of twenty cities from the list were retained: electronics components assembly, software development, Web and multimedia design, telecommunications equipment and electronic systems testing. For more details regarding the study, please consult the “Competitive Alternatives” Web-site at: www.competitivealternatives.com
Taxes and financial incentives
Cost advantage The cost advantage relationship represents the average of results from the « Competitive Alternatives Interactive Cost Model » supplied by KPMG for each of the five sub-sectors for Greater Montréal, relative to the average results for the five sub-sectors for the 19 other large North American metropolitan areas of the study.
The results are from average pretax prices of small, medium and large power taken from an annual HydroQuébec study - Comparaison des Prix de l’Électricité dans les Grandes Villes Nord-Américaines, 1er Avril 2011. This study is based on the price of electricity noted in a poll of 16 businesses and from estimates made by Hydro Québec. The prices are in Canadian dollars.
Cost of office space In order to present comparable data for each metropolis, net rent prices were used. Net prices exclude taxes and service costs. Unless there are other indications to the contrary, the data relate to Class A buildings located in central business districts.
In KPMG’s “Competitive Alternatives 2010 – Special Report: Focus on Tax,” the firm evaluated the tax burdens of businesses in 95 cities located in 10 countries, in 17 industries: electronic components assembly, shared services centers, precision components, software development, Web content and multimedia design, telecommunications equipment, medical devices manufacturing, clinical trials management, electronics systems testing, aerospace parts, automotive parts, pharmaceutical production, specialized chemical products, plastic products, biomedical R&D, food transformation and metals machining. The tax burdens of businesses in a given metropolis include all taxes. This includes three components: corporate income taxes, other corporate taxes, and statutory labor cost. Corporate taxes (at the national, regional and
77
local levels) are determined based on business sector and location. Other corporate taxes include capital taxes, sales taxes, real estate taxes and other types of taxes. Salary taxes include amounts related to various employee coverage regimes and other social advantages that employers must pay. These last two categories vary based on the business’s sector of activity and its location. KPMG’s analysis is based on information collected between July 2009 and January 2010. The taxes are based on rates in effect on January 1, 2010, and take also into account changes announced during the collection of data which took effect later. The real tax rate takes into account tax credits, subsidies, and generally accorded tax advantages. KPMG presents results separately for 41 cities, with populations of two million or more. Montréal’s position is established relative to this group of large international cities.
Activities admissible for the reimbursable tax credit for the development of E-Businesses The activities of the Information Technology sectors and the location of admissible personnel are based on the following North American Industry Classification System (NAICS) sectors: w 3 34110 – Computer and Peripheral Equipment Manufacturing w 3 34220 – Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing w 4 17310 – Computer, Computer Peripheral and Pre-Packaged Software Wholesaler-Distributors
w 4 43120 – Computer and Software Stores w 511210 – Software Publishers w 5 1821 – Data processing, Hosting and Related Services w 5 41510 – Computer Systems Design and Related Services w 561320 – Temporary Help Services w 5 61330 – Professional Employer Organizations
APPENDIX C: SOURCEs Compilations: Montréal International chaRts
SOURCES
PAGES
1 and 2
Statistics Canada and the Conference Board of Canada
05
3
Statistics Canada, 2010 (Data taken from “Profil Statistique du Secteur des TIC 1997-2009,” MDEIE, 2010)
07
4
Statistics Canada, Labor Force Survey
07
5
Statistics Canada, Business Register
07
6
American data: Bureau of Labor Statistics Canadian data: Statistics Canada
08
7
Statistics Canada, “Financial Information of Universities and Colleges, 2008-2009”
33
8 and 9
KPMG, « Competitive Alternatives Interactive Cost model»
50, 52
10
Hydro-Québec, « Comparaison des Prix de l’Électricité dans les Grandes Villes NordAméricaines »
54
11
Cushman & Wakefield Research, « Office Space across the World »
55
12 and 13
KPMG, « Competitive Alternatives 2010, Special report : Focus on tax »
58, 59
14
Thomson Financial
69
79
Compilations: Montréal International TABLEs
SOURCES
PAGES
1
RE$EARCH Infosource, « Top 100 Corporate R&D Spenders List 2010 »
10
2 - 10
Montréal International
11, 12, 16, 19, 20, 23, 25, 26
11
Statistics Canada, “National Occupational Classification”
30
12 - 15
Ministère de l’Éducation, du Loisir et du Sport (MELS) du Québec, 2010 Compilation: Montréal International
34, 37, 39
16 and 17
Montréal International
43, 45, 47
18
Economic Research Institute, « Salaries and Cost-of-Living »
53
19 and 20
Deloitte, « Tax Incentive Programs in Québec – IT, January 2011» and «Québec eBusiness Development Tax Credit, March 2011 »
61, 62
21
Investissement Québec
62
22
Deloitte, « Tax Incentive Programs in Québec – IT, January 2011» and «Québec eBusiness Development Tax Credit, March 2011 »
63
23
Thomson Financial
69
24
Thomson Financial and Réseau Capital
70
Appendix A
Institut de la statistique du Québec, Conference Board of Canada and MDEIE
74
About Montréal International www.montrealinternational.com
Mission Montréal International (MI) is a non-profit organization created in 1996 as a result of a private-public partnership. Its mission is to contribute to the economic development of Greater Montréal and enhance its international status. MI is financed by some 100 members from the private and institutional sectors, as well as the Governments of Canada and Québec, the Communauté métropolitaine de Montréal and the City of Montréal.
Mandates w Attract, retain and expand foreign direct investment w Attract, retain and expand international organizations w Attract, welcome and retain foreign talent
trategic support S Public-private partnership, MI provides foreign companies with valuable assistance for setting-up, expansion or strategic alliance projects. They benefit from expert advice to help them take full advantage of business opportunities that will power the development of their company. nowledge of the financial and fiscal incentives K Companies setting-up in Greater Montréal can benefit from various government programs. MI can provide guidance in identifying the financial and tax incentives that are right for your project as well as various potential funding sources.
I nternational mobility MI assists companies and organizations seeking to hire foreign strategic workers particularly by providing assistance with paperwork and easing the settlement process for these individuals and their families in Greater Montréal. ectorial expertise S We enjoy a unique expertise in Greater Montréal’s competitive clusters. In addition to coordinating the various services required to the advance promising projects, MI provides foreign companies contemplating a move to the area with information and advice on their sector. ite selection data S
w Promote and reinforce Greater Montréal’s economic attractiveness and international status
MI can provide a full range of comparative key information on Greater Montréal’s business environment (workforce, costs, taxes, innovation, quality of life, etc.).
Services
You will benefit from the privileged relations that we maintain with many federal, provincial and municipal partners, business and financial networks, universities and research centres.
As a one-stop organization, Montréal International (MI) offers a wide range of customized, free and confidential services. The organization relies on the expertise of some fi fty professionals, all of whom are specialists in their respective field.
380, Saint-Antoine West, Suite 8000, Montréal (Québec) H2Y 3X7
overnment relations G
Tel.: (514) 987-8191 info@montrealinternational.com
About TechnoMontréal www.technomontreal.com
Mission
Four working groups
Founded in 2007, TechnoMontréal represents the information and communication technologies (ICT) cluster of Greater Montréal. This industry employs 120,000 people in 5,000 establishments and is among the most dynamic in the world both for its creativity and cutting edge technology. As a non-profit organization, TechnoMontréal cluster brings together stakeholders from the private, public and institutional sectors. It greatly contributes to the economic and social vitality of Montréal. Its mission aims to bring together and support the industry’s players around common goals and concerted actions to accelerate and optimize the industry’s competitiveness, growth and influence.
To address issues within the context of Greater Montréal’s ICT industry, TechnoMontréal has put in place four strategic working groups that allow the industry to position itself on the international stage:
Partners TechnoMontréal is proud to count on recognized partners that are invested in developing Greater Montréal’s ICT industry. The financial contributions from TechnoMontréal’s public, private and institutional sector partners contribute greatly to the success of the cluster and its reputation abroad.
380, Saint-Antoine West, Suite 8000, Montréal (Québec) H2Y 3X7
1
Innovation The mission of this working group is to facilitate innovation in Greater Montréal by the implementation of growth-generating projects, such as “Montréal Digital Metropolis”. This project aims to develop a digital urbanism through worldclass ICT capabilities and infrastructure, and to propel the Montréal region at the “smart city” level.
2
Talent The aim of this working group is to address industry labor needs, and seek a balance between the supply and demand of ICT jobs in Greater Montréal.
3
Visibility and Internationalization This working group aims to ensure the international influence of the ICT industry by developing partnerships with key players, both locally and internationally.
4
Industry Development This working group is committed to supporting the growth of all its members. It facilitates networking and development of strong ties between all industry players, as well as access to public contracts. It also supports supply chain channels between large corporations and SMBs.
Tel.: (514) 987-9340 info@technomonntreal.com