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Calgary’s Struggle With Digital Technology May Have Cost It in the Amazon Sweepstakes: Here are the Lessons Learned – Geoffrey Cann



Calgary didn’t make it into the top 20 most attractive cities for the second HQ of the digital Goliath. What does this tell us about Calgary’s brand and how it may need to change for a more digital future?

The backstory

In case you haven’t been watching, Amazon is on the hunt for a location for a second headquarters. Never mind the oxymoron of such a concept – two head offices? The whole idea of a “head office” is that there can be only one. But I digress.

Some 238 cities across North America pitched their best attributes to try to catch the ardour of this most desirable of denizens. “We have highways and waterways, airports and seaports, ample land for your growth”, we all shouted in unison. “We have splendid universities, networked tech hubs, growth accelerators,performance arts and cinema, outstanding parks, and recreation galore.”

The stakes are high – some 50,000 high paying jobs in the downtown, all the spin off effects of restaurants, entertainment, and services, investment in R&D, a flood of new tax dollars, and a steady flow of travelers.Amazon would also give boost to an ecosystem of tech start ups, R&D labs, patent lawyers, research houses, spin offs, and start ups.

We had a great pitch, of that I’m certain. The good thing about these kinds of debacles is that they create great learning moments and opportunities for communities to confront the less appealing aspects of their community brands.

Calgary has struggled with technology change

Silicon Valley has a long memory. How a city has treated its past technology entrepreneurs and tech start ups says a lot about how it will likely treat a big technology arrival, particularly an American one, and importantly, how its various spinoffs, might be treated.

The story of Uber’s arrival in Calgary makes the rounds in San Jose. If you weren’t around then, Calgary made market entry for Uber spectacularly difficult – three attempts to get started, court injunctions, lawsuits, license suspension, 18 months delay to update bylaws, disparaging comments from city councilors and police, threats of fines against drivers, threats of violence from cabbies and alarmists sounding off about imaginary personal risks to passengers.

If this is how the community treats something as innocuous as using an app to hail a cab, how will it treat the next innovations like autonomous cars and trucks, blockchain-based land reform, and drone package delivery?

Calgary struggles with social change

As a city, Calgary has deeply rooted social mores that resist change. In the midst of the Uber bid process, an innocent social movement attempted to organise an event of an unusual sort for Calgary. Perhaps you saw the news – a proposed after-hours nude swim at a local pool. Such events are commonplace in Edmonton, just 3 hours north.

To read the news about the event, you’d have thought Calgary had lost its mind. An opposition petition signed by a whopping 1.5% of the population thumped on the desk with the resounding thud of a wet cow plop. There werebomb threats. Charges that the event was a front for child molesters. Vigilante threats to photo and publish license plates from those attending. Cars would be vandalised.

City departments concluded that it would be impossible to mount sufficient security for the event without a lot more notice. I’m not a security expert, but it’s difficult to square this position against the outstanding security response to the flood, the annual policing of the Stampede, and the outstanding safety record at events on Prince’s Island Park.

In any event, we elected not to stand up to the phantom on-line mob, we telegraphed word that that we easily cave to a bit of on-line social pressure, and we won’t support those aiming to change social attitudes. And technology people tend to be at the forward edge of social change.

It’s not just nude swimming that struggles to achieve local legitimacy. Ask a Calgary food truck operator about City bylaws. Food trucks first came to Calgary in 2011, and have been tightly restricted ever since. Even a federal competition bureau study has pointed at the bylaws as being anti-competitive. Or how about architecture, like thePeace Bridge, thoroughly maligned by the small minded during construction, and now celebrated as one of the top 100 bridges in the world? Or the ongoing nonsense about public funded art in Calgary.

Calgary money is fixated on oil

There are plenty of technology entrepreneurs who have tried to make a go of it in Calgary, but while Alberta has money, lots of it, that money is deeply in love with all things hydrocarbon. Markets are guaranteed, the geologyis largely derisked, there are no pesky customers to deal with, and returns can be spectacular when prices move in your favour.

The few successful oil-oriented technology companies tend to be innovations that started within energy companies. For some reason, they couldn’t secure inside funding, so the inventor bails and sets up outside, selling back to the former employer and other industry contacts, and frequently funded by Silicon Valley venture capital.

This is fortunately changing, driven in part by the lack of capital for oil and gas, and the hordes of entrepreneurs who have taken their good ideas into the market. But tech entrepreneurs still complain about how hard it is to get funding here at home.

Calgary money doesn’t quite get digital

Some students at one of the local universities set up a mock investment pitch off with some local money firms. The pitches were for innovations like Uber, Facebook, Tumblr, and Instagram, except the students were not allowed to name their disguised innovations. They could only describe them in terms of their features.

Sadly, none got funded. Calgary money doesn’t understand new business models based on eyeballs, customer engagement, advertising dollars, click through and network effects. Calgary money doesn’t readily support these kinds of digital innovation.

This is also changing as oil money comes to grips with the need for digital innovation to help improve the economics of oil and gas, but it’s a slow slog.

It’s hard to be an advocate for Calgary in areas like digital change, when the City, society, and its money are all subtly against the kinds of change represented by the likes of Amazon. To attract the next Amazon, Calgary needs to redirect its brand.

Prepping for the next Amazon

Here’s what Calgarians might want to do to make the city more appealing to digital companies:

TUNE UP THE BRAND

City management needs to align the City towards a digital future. As did Estonia (a country of 6 million), the City could pass a bylaw making it illegal for city departments to ask citizens for the same information twice. Funding would be available for departments that drive digital change, and denied to those that don’t (Ford, for instance, has redirected 30% of its R&D to electric vehicles). City managers could be evaluated on how digital their departments are and how oriented their people are towards digital innovation.

DECLARE OPEN SEASON FOR DIGITAL INNOVATION

The City should declare that it’s open season for digital innovation and become a friendly destination for technology change. Departments should aim for 3 digital experiments per quarter. This could include setting up testing facilities for autonomous equipment (snow removal, street cleaning, paving, construction, trucking, busing). Create a free airspace zone for drone trials. Extend free wifi over the whole of the city. Make available as much City information as possible for augmented reality trials and data visualization. Begin electric and autonomous bus trials. Begin autonomous C-train trials. Aim to engineer Calgary as the first City in Canada to become fully blockchained, and begin the transition to blockchain at the land registry. Accept bitcoin as legal tender for City transactions.

MOVE MORE MONEY INTO DIGITAL

Calgary’s money needs to support digital investment. More money should be directed towards the various incubators and accelerators that have sprouted in the past 24 months (thinking of Nucleus, Zone Startups, Creative Destruction Labs, ATBx, Rocketspace, and so on), with particular emphasis on targeting global markets, not just local business.

GET EDUCATION ON BOARD

There are already serious shortages of key technical skills. The schools need to quickly adapt their curricula to start generating the numbers of job ready employees needed for blockchain, machine learning, augmented reality, artificial intelligence, autonomous equipment, smart cities, additive manufacturing, and so forth.

AIM TO BE SOCIALLY EDGY

Calgary should not just react to nude swimming, but actively get behind and support edgier events. I like the City’s main show, but it dominates the agenda, celebrates a 150-year old lifestyle that has little link to modern living, and little relevance for the future. It speaks volumes about how we see ourselves – nostalgic, rural and centered on the primary energy source of 100 years ago – the horse.

It’s time to create an event calendar that takes us towards own version of Burning Man, world class, edgy and exploratory, that attracts technologists and futurists from around the world and showcases Calgary for what it aspires to be – forward, clean, inventive and technologically and socially advanced.

There is still time

We have just witnessed the disruption of corporate location services. Instead of running some kind of secretive process (the normal corporate way to go) or one with just a couple of candidate locations, Amazon made a huge public display of its aspirations, invited submissions from anywhere. I can well imagine that Calgary’s competition upped the ante for tax breaks, investments, incentives and options.

Other companies may take Amazon’s lead and make similar moves. After all, there will be 237 unsuccessful bids submitted. Cities are hungry for investment, and companies all over North America who are not getting enough love and affection where they are located now could well start testing out other markets. This will take some time.

Calgary should not be satisfied with its poor ranking among North American cities for technology companies. We have a window to make some changes to improve our competitiveness. Let’s not waste it.

About Geoffrey Cann

Geoffrey Cann is a consulting Partner with Deloitte in Calgary, Alberta, Canada. He is deeply passionate about the impacts that digital innovation will have on the oil and gas industry. His 30 year career has taken him to oil and gas companies in the far corners of the globe seeking out digital innovation. You can follow him on Twitter (@geoffreycann and @digitaloilgas), subscribe to his blog, listen to his podcast (on iTunes entitled “Digital Oil and Gas”), or simply connect with him on LinkedIn.

The views expressed herein are those of the author and not of the publisher or Deloitte. Readers should not rely on any predictions and should ensure that before they make any decisions they obtain their own independent professional advice.



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