Digital firms see bright future
Report on Manitoba interactive media companies offers recommendations to grow industry
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Hey there, time traveller!
This article was published 27/12/2018 (1327 days ago), so information in it may no longer be current.
A new census of Manitoba’s interactive digital media industry (IDM) outlines a collection of enterprises featuring strong, confident growth and surprising resiliency, despite the province’s traditional dearth of venture capital.
Although the industry may be hard to pin down because it’s becoming pervasive across all sectors, the recently released report called Wave Interactive, details an industry contributing close to $200 million to the provincial GDP with more than 3,200 employees.
Commissioned by New Media Manitoba and produced by the Toronto consulting firm Nordicity, it involved a survey of industry players, as well as some assumptions, to come up with the data.
Among other things, it said Manitoba’s IDM industry is made up of an estimated 67 companies (which some local industry players say is a very conservative estimate), direct employment of 3,230 and a GDP effect of $186.9 million.
The census includes large and growing firms such as SkipTheDishes, Bold Commerce and many micro operations — about 23 per cent earning less than $50,000 — that cover a host of activities including digital games and publishing, web development, virtual reality/augmented reality development, mobile apps and e-learning software development.
More than 90 per cent of the companies believe they will grow by at least 25 per cent over the next two years.
Louie Ghiz, executive director of New Media Manitoba, a non-profit organization that supports the industry, said the data collection will prove valuable in forming strategies for the future.
“To help the industry grow and be successful, we need to know the composition of the industry, what it looks like, what the companies need, what their strengths are,” Ghiz said. “Then we can identify where the opportunities are.”
The report makes some broad recommendations, but Kristian Robert, the partner at Nordicity who led the project, said he believes the most important issue regarding the ability of the sector to grow is access to markets.
“In the IDM business, there is not really any distinction between domestic or international markets. It is all global,” he said.
“Getting to the right market, whether that is geographic or into other industries like construction or aerospace… but getting to where the client is, that’s the biggest issue.”
Dan Blair, the founder and CEO of Bit Space Development, a Winnipeg virtual reality development company that has been successful in developing training products for the construction industry, said it has just hired its first sales and business development professionals.
“In the past, I was doing all that myself and I have no training in that,” he said.
His company, which has grown to 20 employees in less than four years, has likely succeeded faster than others in convincing other industries to use interactive digital media technologies.
“A lot of the traditional industries and organizations are not necessarily aware of how they can utilize IDM in their business,” he said. “It is a bit of an uphill battle.”
Robert said he was surprised at the amount of activity in Manitoba (for instance, he said he had no idea of the size of SkipTheDishes, with its 2,000 Winnipeg employees) as well as the breadth of activity.
Not unlike Manitoba’s economy as a whole, the province’s IDM sector is engaged in a wide range of activities. Robert said that poses its own problem.
“If it was all video game companies or all back-end software, we could make recommendations specific to those activities,” he said. “We have to take a somewhat more flexible approach because the industry is doing so many different things.”
The report proposed five broad recommendations to address anticipated barriers and opportunities: optimize the workforce; capitalize on success; support access to market; align industry support; and amend the tax credit to be more adaptive.
On the last point, Ghiz said the province’s IDM tax credit, which the province has renewed to 2022, is one of the best in the country. He said the issue is that since the technology and its applications is changing so fast, the tax credit should be regularly reviewed to optimize its applicability.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.