Technology

There are 430 advanced technology firms in Newfoundland and Labrador, employing about 6,400 people and generating annual revenues of about $470 million, making it a significant contributor to the Provincial economy. Within the advanced technology sector, Information Technology (IT) is the single largest segment of business activity.

Sources of Growth

A number of factors have fuelled growth of the IT sector, including the establishment of the Internet and the creation of related spin-off opportunities, a demand for global telecommunications capabilities, and the enabling effect of IT products and services which offer efficiency gains for business.

Partnering

Many firms have developed expertise on the strength of partnerships with academic research institutions, national and international firms, and other stakeholders. Generally, these firms have been very competitive and successful internationally and are able to provide products and services that are unique in the marketplace.

Export Markets

According to a recent export readiness survey almost 20 provincial advanced technology firms reported export sales of their goods and services to more than 40 countries around the world, mainly to buyers in the European Union, United States, Southeast Asia, the South Pacific and the Caribbean.

Core Competencies

It is interesting to note that the expertise of local firms and the province's overall "core competence" in the IT sector very much reflects the history and geography of Newfoundland and Labrador. For example, considerable expertise has been developed in the area of cold ocean technologies, marine management, wireless communication, tele-medicine, distance education, digital navigation and geographic mapping.

New Opportunities

There are emerging business opportunities in the areas of Internet development, new media production, health information systems, electronic commerce, tele-learning and telecommunications services. The Hibernia project has created numerous opportunities for local IT firms during construction, and will continue to provide benefits in the production phase. Future developments in the oil and gas industry, such as the Terra Nova project, will create significant new opportunities, as will the development of the world-renowned nickel-copper-cobalt discovery in Voisey's Bay, Labrador.

Nurturers of Growth

Operation ONLINE Inc. (Opportunities for Newfoundland and Labrador in the New Economy) has been contracted by both levels of government to serve as a catalyst in the development of the provincial IT sector. To fuel Operation ONLINE's initiatives, the federal and provincial governments announced on November 25, 1996 an investment of $10 million from the Canada/Newfoundland Agreement on Economic Renewal.

On March 1, 1997 Operation ONLINE Inc. undertook the first major initiative of its Action Plan to support firms in the development and commercialization of software and multimedia products to meet emerging market opportunities, with an emphasis on health, education, tourism and culture, and commerce. Other initiatives include a detailed marketing communications plan to guide provincial, national and international promotional activities, and human resource development and supplier development initiatives.

NATI

The Newfoundland and Labrador Alliance of Technical Industries' (NATI) membership continues to grow as it plays a proactive role, working with governments, non-government organizations, other industry associations and individual firms, to develop and promote the advanced technology sector. Through partnering with government, education and training institutions, and other agencies, NATI helps its membership in a variety of ways. NATI has matured as an active and effective voice for businesses and organizations operating in IT and the technology sector at large, and is one of Operation ONLINE's primary implementation partners.

CCMC

The Canadian Centre for Marine Communications (CCMC) supports Canadian industry in the technical and commercial development of IT-related marine products and services. The recent announcement of a funding extension at CCMC will allow the Centre to continue its work into the next century. CCMC is developing new initiatives in Marine Geomatics, aimed at advancing marine geomatics capabilities in the Province, and the Information Seaway, which will capitalize on international market opportunities in the provision of marine IT products and services.

Seabright Corporation

The Seabright Corporation is the technology transfer and commercialization company of Memorial University. It recently opened the Genesis Centre, a support network to assist provincial knowledge-based businesses and entrepreneurs by providing access to the marketing, finance and management expertise of world-class mentors and consultants along with access to the multi-disciplinary expertise resident at Memorial University.

Major Players

All of the larger IT companies in Newfoundland and Labrador recorded impressive growth and/or made important technological advances during 1996. The following are some examples.

Newtel Communications

NewTel Communications, the primary subsidiary of NewTel Enterprises Limited, invested more than $80 million during 1996 in the expansion and modernization of local, long distance and cellular communication networks, and the development of new services and information systems. NewTel launched a new $1.3 million world class Call Centre in 1996, as part of the private-public sector partnership Network Newfoundland and Labrador. Also in 1996, NewTel switched on its second province-wide fibre-optic network, giving Newfoundland and Labrador the second highest penetration of fibre-optic technology in Canada. NewTel also recently launched the NewTel/Arts Council Cultural Innovation Fund to support initiatives by local artists in the development of new arts-related information technologies.

NewTel Information Solutions Limited

NewTel Information Solutions Limited (NIS), another NewTel Enterprises subsidiary, is the eighth largest computer services company in the country and the largest in Atlantic Canada. NIS was ranked number one by Atlantic Progress magazine in terms of revenue growth in Atlantic Canada (1996 sales of $38.3 million, a 49.8 percent increase over the previous year). As part of its 1994 privatization arrangement, NIS entered into an Industrial Benefits Agreement (IBA) to outsource a percentage of work to smaller local IT firms. To date, it has outsourced more than $3 million in contracts under the IBA.

Cable Atlantic

Cable Atlantic has grown in recent years from a cable TV service provider into a major communications company that is making technology breakthroughs of national significance. In a joint venture with AT&T Canada, Cable Atlantic won a bid to take over management of the NLnet service when it was privatized in 1996, making Cable Atlantic the largest Internet service provider in the Province. Late in 1996, Cable Atlantic launched a new cable modem-based (in addition to regular dial-up) Internet service that is one of the first of its kind and among the fastest in North America. Over the next four to five years, Cable Atlantic will invest roughly $70 million in a two-way fibre-coax network that will serve 75,000 households in 13 service areas. It has also formed Fast Forward Technologies, a software company, to develop new technologies for the emerging Internet publishing and telework marketplaces. Fast Forward is one of Canada's top 25 up and coming IT companies, according to the Financial Post and Branham 200.

Other Experienced Players

Several other mature players in the provincial IT sector continued to grow and move into new markets during 1996, including NewEast Wireless Telecom, Nautical Data International, Compusult, Seaborne Information Technologies Ltd. and Instrumar Ltd.

New Entrants

The IT industry is characterized by innovation, and this spirit of innovation is apparent in a number of exciting new companies, including AbbaCom Logic Corporation, Specialist Solutions Limited, ZEDD Technologies, IES Health Technologies, INNOVA Multimedia, Full Tilt Design, IDON East and Media Touch Technologies Ltd., among others. These firms are producing computer memory products, medical information databases, educational software, interactive CD-ROMs and even a software application that allows musicians in different locations to play music together on the Internet. Many of these firms are negotiating or have signed with national or international publishers and distributors and are marketing their products and services across Canada, the United States and Europe.

Outlook

In addition to the above examples, there are numerous other private, public and institutional initiatives and success stories that are contributing to growth in IT. Activity in this area has exhibited better-than-average growth and this is expected to continue in the future, generating new wealth and investment, providing spin-off benefits to other industries and employment opportunities.

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