Silicon North
by GORDON HOEKSTRA
Citizen staff

Tucked under a massive concrete balcony that wraps around the Coast Inn of the North, Miller Software Consulting sits in the shade, almost unnoticed. The glass office door is sometimes not visible, even from the parking lot, a dozen steps away, as cars or pickups block the view. You wouldn't know the firm employs a dozen people in Prince George, and through its partnerships and satellite offices has a presence in Vancouver, Kelowna, Calgary, Toronto, Chicago and Lafayette, Louisiana. The company also plans to expand to Seattle and San Francisco soon. In the past six years, Miller Software has developed more than 100 business applications, two of which have already been spun off into new companies -- one of them a system that does web-based surveys and another that allows clients without any technology knowledge to edit their own websites. The company is part of an often unrecognized emerging economic force in the Prince George region. There are 172 high-tech firms in the Northern Interior, nearly 80 per cent of them in Prince George, according to a 2003 survey by the Innovation Resource Centre. Those companies pump $133 million into the region's economy, and employ an estimated 774 people. According to the survey, high-tech companies expected to hire another 123 employees by the end of 2003. Daniel Miller, CEO of Miller Software, says it's often local people that are unaware of the number and diversity of high-tech firms in the city. "Local companies, which are looking for service of the kind we offer, quite often don't even check the phone book," says Miller. The company got its first growth spurt six years ago on a bus ride to Northwood pulp mill where Miller met Darren Ditto, a UNBC computer science student just finishing up a work experience session at the mill. There was a hiring freeze on at the time, but Northwood had indicated there might be some contract work for Ditto. Miller, a UNBC computer science grad who had already set up his own company, started telling Ditto about insurance, business licencing and the GST -- the mundane details of administering a new company. It wasn't until that night it even dawned on Miller if they joined forces they could share business costs. With the help of Miller's wife Marsha McLarry, a UNBC commerce student, they did just that. Six months later, Tom Wookey, another UNBC computer science grad, joined the firm. In the beginning, the company did most of its business in the Northern Interior's forest sector, working with companies like Canfor and West Fraser. However, the company has continually sought to expand into new markets and sectors. For example, it works with forest companies in Montana and Idaho now. And Miller Software has expanded into the health sector, and is just branching out into the booming oil and gas sector, including working with Apache, a large U.S.-based firm that works in the offshore oil and gas business worldwide. "The first year, our business would have been 100 per cent in the Prince George area," said Miller. "Now, I guess about 40 per cent is local and 60 per cent is done outside. It's quite a change."

Miller Software's story is not entirely unique, as other local firms are using the same strategy -- taking time to build expertise in this region, usually in the forest sector, and then looking at ways to export that know-how.

GLC Controls is just making its first foray into the American market, exporting new technology all the way to Eldorado, Arkansas, more than 3,000 kilometres from Prince George. It is modifying the gluing system at a medium density fibreboard plant, an effort to speed up the production process for Del-Tin Fiber. If the venture proves successful, there's more than 100 panel plants in North America the Prince George firm could tap for more business. GLC Controls, founded by president Bill Christensen, started life installing electrical control panels for sawmills and pulp mills, which is still its base business. However, it has also been pushing to expand its product line and markets. For example, it successfully took on a project for Canfor several years ago to create a system to remotely monitor bin levels -- filled with sawdust and other wood waste -- at sawmills and pulp mills. "The average citizen, they don't realize this is taking place in Prince George," says GLC sales director Lee Whittles, a graduate of the College of Caledonia's engineering technology program. "They think all the technology is taking place in Vancouver. Maybe 10 years ago that's the way it was. Now, there's not much that can't be done locally." Like Miller Software, GLC is located out of the public eye. The company moved into a new building on River Road this summer -- just across from Lakeland Mills -- to accommodate their growing work force. GLC has tripled in size in the past six years to 16 staff. They've set aside a dedicated research and development room in their building which includes a special lab freezer used to test electronic equipment. The freezer can drop the temperature as low as -40 C, and heaters can push the mercury up to 40 C as well. Recently, in its continuing push to diversify its markets, GLC formed a partnership with P.G. Mill Supplies, an industrial supplier and manufacturer, to hire a marketing co-ordinator. Christie Ray, another UNBC graduate, helped GLC discover there may be a market for their bin sensor in the oil and gas sector. The company is already testing the idea. "The potential to grow is unlimited," says Whittles. "There's no reason there couldn't be 60 people working here at GLC in 10 years."

The high-tech sector in the Prince George area is not without its challenges. So far, only about 12 per cent of the Prince George region's high-tech firms revenues are generated outside of north-central B.C., and just two per cent in international markets, including the U.S. That's different than in the Okanagan, another Interior B.C. region with a burgeoning high-tech sector. Although the high-tech sector in the Okanagan is not much bigger than in the Prince George region, half of its companies report having international customers. Tapping into outside markets is important because it brings new, wealth-creating dollars to the region. Michael Kerr is trying to help Prince George area companies to do just that, as well as increase their size and develop new technology.

Kerr is one of two industrial technology advisors who serve northern B.C. for the National Research Council of Canada. He points out that because most of the high-tech firms in the Prince George area are small -- five to 10 employees -- they rarely have time to spend searching out new markets. As well, explained Kerr, the firms that want to expand also don't have the type of access to private capital markets or management experience which is often provided by retired CEOs or entrepreneurs to help start-ups in a large centre like Vancouver. However, the sector is looking at ways to tackle these issues with the help of agencies like the Innovation Resource Centre located on Seventh Avenue in downtown Prince George. The agency is able to put companies in contact with people with management and marketing experience, said Kerr. And it may be possible to bring groups of potential investors to Prince George, he said.

There are other issues as well. While the Prince George region has a skilled labour pool of computer scientists and technologists from UNBC and the College of New Caledonia, more skilled and experienced workers are needed, including electrical and mechanical engineers, observed Kerr. There is also not a high level of awareness of the high-tech sector here that exists in the Lower Mainland or even the Okanagan. In Richmond, MacDonald Dettwiler is part of a business park that has a big neon sign that essentially says "high-tech here," said Kerr. In the Okanagan, the high-tech sector has dubbed itself the Silicon Vineyard, and some of the anchor players there are housed in the Landmark Technology Centre made up of three glass towers. Most of the Prince George area's high-tech players -- including Miller Software and GLC Controls -- are tucked in out-of-the-way places. But more companies are beginning to network, some forming partnerships, and there's been thought given to branding the region in the same way as the Okanagan. If there's a Silicon Vineyard, and Alberta's high-tech sector is sometimes referred to as the Silicon Prairie, maybe the Silicon Forest or Silicon North is not far off.

There are already some other positive developments. Nearly half of the Prince George region's high-tech companies say they're doing research and development on a new product or service innovation. Of those companies, six per cent have spent more than $100,000 on research and development.

One of the factors that's also cited in the take-off of Kelowna's high-tech sector is its access to 10 million consumers within a one hour flight, including those in Seattle, the home of high-tech giant Microsoft. The Prince George airport is gearing up to provide international flights within the next year, also hoping to connect with Seattle. "I'm excited," said Kerr. "There are bright times in store for high-tech companies." Daniel Miller is learning it matters little to clients where his company is located. He was sitting down to lunch with a client in Kalispell, Montana -- the manager of a lumber remanufacturing plant -- and was asked where his software firm was located. The manager had an idea of where Prince George was, but not exactly. When Miller told him, the plant manager wanted to know why he would locate the business 800 or 900 kilometres from the nearest major city. Miller explained it made a lot of sense to be located in the heart of B.C.'s forest sector, particularly since it provides them with a competitive advantage with their clients. It's also a financial advantage, since office rent in Vancouver or Calgary would be four times as much as in Prince George, which would mean an increase in their rates to their customers, added Miller. The client told Miller to stay right where he was. He plans to do just that. Others are obviously making the same decision.

The Tech 2003 Northern B.C. Business and Industry Awards attracted more than 400 people to its celebration last November. The number of firms nominated more than doubled to 76, and the award recipients represented at least nine patents. Observed Miller: "Look at those numbers and draw a ratio to the population of Prince George, and then consider what you'd have to see in Vancouver to see those same proportions. It doesn't happen. It would be massive. We've got a lot of brilliant people, and very, very innovative organizations here."

Revised 2013 by Larry Gentleman