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Economic Performance:
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Calgary Region Cluster
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Economic
Foundations
Finance
Venture Capital (VC)
in Alberta lags behind other Canadian regions. Calgary and Edmonton combined
received only 3% of VC in 2000 although the number of VC investments nearly
doubled between 1999 and 2000. There are several reasons why there is
a lag in VC in the province related to the lack of incentives for capital
pooling, lack of critical mass of deal generation, traditional dominance
of oil and gas, focus on licensing revenue as opposed to entrepreneurship
and other related issues.
The Calgary region
however has been successful over the past couple of years in growing its
own VC capacity, with a number of new firms coming on line including SeedCAP,
LaunchWorks, Zinc Ventures, and Springbank Ventures. The outlook for continuing
expansion of VC investment capacity appears to be good. The VC community
is exemplary in its collaboration and leveraging of its resources. Informal
co-ordination and consultation as well as collaboration on due diligence
points to the community's resolve to build the capacity in the region.
Traditional debt-financing
is also readily available in the region. Calgary's oil and gas industry
led to the emergence of the region as a strong financial centre. The majority
of banks serve their oil and gas clients very well and have specialized
services for other sectors including retail, construction, and technology.
Banks are also restructuring operations and developing new instruments
in response to changing local demand and global dynamics. They are working
to streamline processes, and be more responsive. Many banks have established
venture capital arms to react to the growing demand for venture capital
for emerging and expanding companies especially in non-oil and gas sectors.
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