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Calgary Region Cluster Portfolio

Information Technology

Calgary's information technology cluster growth has slightly exceeded the rapid North American pace over the past decade but did not keep up with the explosive growth in Seattle and Silicon Valley. However, this is a large cluster employing an estimated 20,000 in the region, with a strong location quotient of 2.5 or two and half times the North American average.

The majority of cluster employment is in software and systems design (56% of total employment). Scientific and Technical Consultants comprise 23%, Information and Data Processing Services represent 12% and Specialized Design Services 9% of the clusters producers. Each of these segments is well represented in the region in terms of better than average location quotients. Rapid growth in computer systems design is driving cluster expansion. The IT cluster has good wages and salary increases forecast to be slightly above the national average of 5.1%. The cluster has experienced growth within each segment of the cluster since 1998.

For now forecasts for this cluster are down globally: software, networking, Internet/e-commerce, computer and hardware manufacturing will be hurt by limits in spending until 2002. Despite this temporary slowdown the information technology industry is expected to grow globally at 12% through 2005, with almost 41% of ongoing spending on technical support and systems integration for an installed base. The U.S. market is expected to continue to be the major source of demand, growing 50% over the next four years.

The diversity of this marketplace provides opportunities for large and small firms to compete. Calgary has good prospects in networking, for example the SuperNet initiative. In software, companies will continue to grow in serving the oil and gas marketplace in Canada and abroad. Internet/e-commerce may grow in the region, leveraging business-to-business (B2B) and Internet exchanges in energy resources.

Information technology service businesses will continue to expand serving U.S. markets, leveraging exchange rate advantages. Provincial research programs, such as iCORE of the Alberta Science and Research Authority (ASRA), regional technology institutions, such as ARC and TRLabs, incubator facilities such as Calgary Technologies Inc. (CTI) and IT associations, such as the Alberta New Media Association, continue to assist regional company innovation.

Emerging areas include fields such as telehealth and streaming media for e- learning as well as a diverse array of firms involved with enterprise e-solutions and 'roomware' solutions for interactive meetings. Nonetheless, the IT cluster is hit hard by continual brain drain of technical and professional workforce to the U.S. Meeting future labour skill needs is a crucial challenge for enabling growth in this cluster.

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