Iain Klugman is CEO of Communitech.
Kevin Lynch is vice-chair of Bank of Montreal .
Recently, in this space, we made the case for building a Toronto-Waterloo Innovation Corridor as Canada's best shot at a technology ecosystem of the scale and density to rival the world's best.
The potential is transformative. In Britain, the Cambridge innovation cluster started from scratch in the 1960s with the goal to "put the brains of Cambridge University at the disposal of industry." Today, Cambridge is Europe's largest technology cluster, home to more than 1,500 technology-based firms, employing more than 54,000 skilled workers, generating nearly $20-billion in annual revenues, turning out world-leading research and intellectual property, and acting as a magnet for talent.
The governor of Massachusetts, in describing the power of the other Cambridge innovation ecosystem in a talk at the Massachusetts Institute of Technology, argued that it possesses the risk-taking culture, the entrepreneurship and technology capacity, the world-class minds, the infrastructure, and the work and living environments such that "we can invent our own future." He cited the renewal of the manufacturing industry as one example, in in the modern guise of advanced materials and components, 3-D printing and ultra-precision techniques.
With a comparable mix of population density, research universities, technical talent, financial resources, corporate leadership and emerging entrepreneurial culture, the Toronto-Waterloo region has the ingredients to do for Canada what Cambridge in Britain and Silicon Valley have done for their countries – namely, make an outsized impact on economic growth and high-skilled job creation through world-leading innovation.
But ingredients alone won't get us far without an award-winning recipe and a team of champion chefs committed to working collaboratively to deliver a successful innovation feast.
Despite all our assets, the reality today is less an integrated corridor than a series of inadequately linked silos within the Toronto and Waterloo technology ecosystems. We must supplant these silos with the kind of superconnectivity – among entrepreneurs, investors, skilled talent, university researchers, mentors, governments and markets – that powers the London-Cambridge corridor or the San Francisco-San Jose corridor, and, in turn, the British and U.S. economies.
So, how do we do it? Our recipe would look like this:
Add transportation infrastructure. Talent, ideas and capital are the lifeblood of vibrant innovation regions, but only when they flow freely. Highway 401 is the only connector, with increasingly sclerotic traffic flow. Faster, more frequent train service, regular flights from Waterloo to the Toronto Island Airport, even dedicated tech bus service lanes are all as essential to corridor connectivity as ultrahigh-speed broadband Internet infrastructure.
Build collaborative bridges between our institutes of higher learning. Strategic ties between the University of Toronto, University of Waterloo, McMaster University and other postsecondary institutions in the corridor – perhaps through joint programs in engineering, computer sciences and other faculties – could help build a critical mass of startup-ready entrepreneurs.
Add a heaping spoonful of risk capital. By making it easier for venture capital firms with deep management expertise to set up shop in the corridor, we can help our highest-potential companies to scale up and go public though an initial public offering more quickly, accelerating growth of the ecosystem.
Stir continuously. An expansion beyond passive tax supports to more-active government support of technology development, through an agency akin to the Defence Advanced Research Projects Agency in the United States, could accelerate the commercialization of basic research.
Reduce risk aversion in new product procurement. Governments and large firms spend billions of dollars on technology. By being more strategic and less risk-averse in the procurement of new technologies and products, they can act as all-important early customers to corridor-based tech firms, providing essential early-stage growth fuel.
Think more globally. Ambitious tech entrepreneurs know that Canada is too small a market in which to achieve scale, and the sooner you can take your business global from a strong Canadian base, the better. Top talent is also a global commodity. By making it easier for our tech startups to do business internationally through tailored export support programs, and by facilitating their ability to bring in specialized skills in real time through a new class of work visas when necessary, we boost the Toronto-Waterloo corridor's capacity to compete at a world level.
Whether it is Haifa-Tel Aviv or Cambridge-London or Boston or Silicon Valley, exceptionally dense innovation clusters appear to have the greatest impact nationally, not just regionally. The Toronto-Waterloo Innovation Corridor has the population and potential to become such an "innovation super-cluster," nurturing the growth of future billion-dollar firms, attracting and retaining the globally mobile capital and talent necessary to build these companies, and in the process, reinventing our own future.
The question is, do we have the collective will to make it happen, and quickly?