When faced with the decision to distinguish the suitability of a location for a business the traditional Political, Economic, Social, Technological, Legal and Environmental (PESTLE) analysis provides us with a proven framework for our evaluation. The political will with regards to attracting and promoting business within Canada is positive across the provinces and therefore we cannot single out Vancouver as being more competitive. According to the KPMG (2010) report called Competitive Alternatives that examines business competitiveness in 112 cities within 10 industrialized countries, Vancouver ranks fifth in the world. Within Canada, only Montreal performs better at a cost index of 94.2 in comparison to Vancouver’s 94.9.
However, when we perform a comparison of six Canadian cities with an equal hypothetical financial investment of US$ 15.084 million, using KPMG’s Competitive Alternatives data we find out that Vancouver ranks fourth out of the six cities (Edmonton, Montreal, Quebec City, Toronto, Vancouver and Winnipeg) as shown in the plots below (note that all figures are in thousands of US$).
Figure 1: Graph showing costs by city
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Figure 2: Graph showing Net Profit by City
Nevertheless, this does not imply that Vancouver lacks a competitive advantage over the other Canadian cities. On the contrary, Vancouver is especially competitive in the fields of Research & Development, Digital Media and Film & Television. The city’s technological advantage and human capital in these industries has captured the interest of large corporations such as Microsoft, Pixar and Sony. The city has a reputation for having a creative and skilled workforce.
In addition to that, Vancouver continues to attract more businesses in these three fields due to “massive government subsidies in form of provincial tax credits worth roughly 50 percent of a production’s labor costs (Severinson, 2010). The International Financial Centre – British Columbia has been especially vigorous in providing strong incentives for eligible international financial activities within the above listed business categories in Vancouver as shown by Figure 3 below:
Figure 3: KPMGs Competitive Alternatives 2010 Tax Index
Furthermore according to the Economist Intelligence Unit’s latest annual index, Vancouver retains its top spot as the most liveable city in the world, same as last year. This index looks at stability, infrastructure, health care, education, and culture and environment which are factors that boosts investor confidence and increases staff willingness to relocate to a city (A.B, 2010). In addition to that the city’s hosting of the 2010 Winter Games has increased economic activity and makes this the ideal time to establish or expand a business presence in Vancouver.
For one anticipating to venture into small business in Vancouver, the prospects would be much better in Digital Media for which the city has established itself as a brand. The city has a thriving community of animation artists, producers, programmers and investors who are willing to make the business grow.
A.B. (2010, February 11). Its Vancouver, again. Gulliver [The Economist business travel
weblog]. Retrieved on November 3, 2010 from, http://www.economist.com/blogs/gulliver/2010/02/liveability_rankings
KPMG. (2010). Competitive Alternatives. Retrieved on November 3, 2010 from
Severinson, P. (2010, November 3). Vancouver animation domination. BCBusiness Online.
Retrieved on November 3, 2010 from http://www.bcbusinessonline.