The Western Valley of Nova Scotia, Canada is a rural region of some 5600 km2 facing the challenges common to rural areas in the industrialized world: declining population, job losses in its primary industries, low average educational achievement and a high unemployment rate. Yet when polled, residents had strong positive feelings about their community and believed that it would become a substantially better place to live and work over the next several years. Believing that this attitude was a resource not to be wasted, the Western Valley government began a series of initiatives to help the community recover and grow in the modern economy.

A Community Fiber Network

The Western Valley had little hope of attracting private-sector telcos to deploy a network for its small, dispersed population. To combat this problem, the local government created its own Valley Community Fibre Network in 2008. Since its establishment, the Valley Community Fibre Network has laid 186km of fiber connecting multiple towns, municipalities and universities in the region. Western Valley also has dark fiber services available for businesses, public-sector enterprises and local and national carriers as of 2017. The new fiber infrastructure provides connectivity for roughly one-third of the region that previously had no reliable Internet infrastructure.

Digital Skills Training for All

Beginning in the late 1990s, Western Valley has worked to educate all its citizens, from youth to seniors, in digital skills. The Nova Scotia Community Access Program (NSCAP) offers free digital training programs at over 200 sites throughout the province. NSCAP provides programs on a wide variety of topics, including training and support for mobile devices, 3D printing labs, workshops and competitions and small-business technology training. It also features robotics clubs for youth and digital skills internships.

In addition to the NSCAP-provided programs, Western Valley has established the Student Summer Skills Initiative (SKILL). The program connects students with local non-profit organizations to help them gain work experience and provide them opportunities to work within their local communities. Non-profits receive wage-assistance incentives to hire SKILL students, ensuring that as many organizations and students as possible can participate in the program.

Producing Renewable Energy through Waste Cleanup

In 2012, the Western Valley government partnered with local businesses in the mink industry to introduce an anaerobic digester. The digester converts mink industry waste as well as municipal bio waste into methane gas and manure. The gas is burned onsite to generate electricity, which is then returned to the grid to help supplement Western Valley’s electrical costs. Use of the anaerobic digester also helps capture and contain greenhouse gases produced by local industry.

In a traditional rural economy, the Western Valley government has planted the seeds for major change in how local cultures and economies interconnect with the rest of Canada and the world, to their mutual benefit.

Population: 226,248

Website: www.annapoliscounty.ca

Smart21 2018

Top7 2004

Waterloo is the smallest, geographically speaking, of seven cities that make up Canada's Technology Triangle. Small in size it may be, but this second-time Top Seven honoree casts a big shadow in terms of technology-based growth. The Triangle itself is home to 334 technology companies and another 404 providing related services that employ about 10% of the labor force, but account for 45% of job growth.

Among the seven communities, Waterloo is home to 40% of the high-tech firms. Its recent history illustrates the power of getting a few critical things right and then working together to nurture and manage the resulting success over time.

Intellectual Property

The community's first and perhaps most important "right thing" took place at the University of Waterloo. The University was founded in 1957 by two businessmen, Gerald Hagey and Ira Needles, who saw an opportunity to create a high-level technical institution to train local business leaders. In the 1970s, the University established an intellectual property policy that was unheard of in its day. The policy allowed students and faculty members to own rights in intellectual property they developed at the University.

The University's timing was excellent. When the introduction of the personal computer began a decades-long wave of ICT growth, Waterloo was positioned to benefit. Like Stanford University in Silicon Valley, it spurred spin-outs of technology-based businesses, and local entrepreneurs began to build clusters of companies working on the most exciting technologies of the day. Fast-forward a few decades and the Waterloo region is a place where investors have poured C$1.8 billion (US$1.5bn) over the past 10 years into acquiring privately-held technology companies. It is also the home of companies that, over the past eight years, made up 10% of successful IPOs on the Toronto Stock Exchange. Publicly-held technology companies in the Waterloo region have generated a 26% internal rate of return since 1994, according to Pricewaterhouse Coopers, and the original investors in firms that were acquired or went public have received more than a seven-fold return on their investments. Waterloo's leading technology companies today include Research in Motion (RIM, creator of the BlackBerry), Sybase, Open Text, DALSA and Descartes Systems Group.

Today, the University offers the world's largest post-secondary co-op program serving over 11,000 students. It operates more than 50 research institutes, 12 Federal and Provincial Centers of Excellence, is a partner with the city, region and nonprofits in developing a Research & Technology Park. But it does not stand alone. Wilfrid Laurier University is home to one of Canada's largest business schools as well as the Schlegel Center for Entrepreneurship, while the Conestoga College Institute of Technology and Advanced Learning has earned a #1 ranking from the Province of Ontario for eight straight years.

Engaging Business, Citizens and Government

The community's second "right thing" was a local government that has engaged actively with business and citizens in planning for a prosperous future. A Strategic Resource Information Plan developed in 1990 set the pattern for data-sharing and integration among agencies and pointed the way toward the 1998 introduction of the award-winning, Internet-based Waterloo Information Network. Today, Waterloo offers a wide range of online services, from the minutes of council meetings and city program registration to tax assessment tools, interactive GIS maps and marriage license registration.

In 2000, the city undertook a year-long project called Imagine!Waterloo. This city-wide public consultation aimed to determine the best possible future for the city. Its recommendations ranged from environmental protection to transportation, culture to city communications. An Intelligent Waterloo Steering Committee formed in 2006 - led by Jim Balsilie, co-founder of RIM, Waterloo's Mayor and University of Waterloo President David Johnston - stages events to educate business leaders, academics and citizens about the challenges Waterloo faces and engage them in setting goals for educational achievement, access to services, investment in infrastructure and social inclusion.

Collaboration and Reinvestment

The third "right thing" in Waterloo is a culture of collaboration and reinvestment. Perhaps because cooperation among business, academia and government has been so successful, folks in Waterloo make partnership a priority and are eager to give back to the community. Waterloo-based Tech Capital Partners manages C$95 million in venture capital for early-stage companies, while a group of business leaders has recently launched Infusion Angels to find and fund ideas from University of Waterloo students and alumni. UW and Wilfrid Laurier jointly run a Launchpad $50K Venture Creation Competition for students, researchers and community members who develop business plans and start successful businesses. Successful entrepreneurs have also reached into their pockets to fund or contributed their time to the founding of the Center for International Governance Innovation (CIGI), the Perimeter Institute for Theoretical Physics, Institute for Quantum Computing, Center for Wireless Communications, the Waterloo Technology StartUp Network, and Communitech, a capacity-building association focusing on technology in the region. Each fall, the Waterloo region celebrates Entrepreneur Week, North America's largest innovation festival.

Sharing the wealth extends as well to people for whom technology is more a challenge than opportunity. Like other Canadian communities, Waterloo participates in the Federal Community Access Program that places Internet workstations in public access locations. Waterloo's public libraries have become ICT learning centers that, thanks to company donations, lend laptops as well as books. Through Wilfred Laurier's Center for Community Service-Learning, nearly 1,000 students a year engage with 200 local partner organizations in programs that connect community service to classroom learning. Business and nonprofit organizations have joined forces to create the Waterloo Region Immigrant Employment network to help match recent immigrants to job opportunities, while the Waterloo Public Library has developed an online portal, ProjectNOW, to provide settlement and labor information to newcomers.

With 76% of businesses and 47% of households on broadband, and 75% of adults using the Internet, Waterloo is already a broadband economy success story. The challenge the community has set itself is to sustain and accelerate its success in a global economy that competes harder for investment, talent and ideas with each passing year.

In the News
Read the latest updates about Waterloo.

Want to know more about Waterloo?
Waterloo was featured in the Intelligent Community Forum book Brain Gain.

Population: 115,000

Labor Force: 55,551

Website: www.waterloo.ca

Intelligent Community of the Year 2007

Smart21 2006 | 2007

Top7 2006 | 2007

Toronto has both the assets and the liabilities that come with being Canada’s largest city. On the asset side is its diverse economy, with key clusters in finance, media, ICT and film production, and success as a magnet for immigrants that have made it one of the most multicultural cities in the world. Major carriers offer high-quality broadband to 100% of residents, and its five major universities and multiple colleges have attracted 400,000 students and helped ensure that Toronto has more residents with undergraduate degrees that London.

Improving the Urban Experience

On the liability side are the highest cost of living in Canada and transportation gridlock that gives residents of the Greater Toronto Area the world’s longest average commute times. These factors have contributed to the success of suburbs in attracting new and existing businesses, making once-sleepy cities like Mississauga into business hubs in their own right. To reverse this trend, Toronto is doubling down on the value of a dense, superbly equipped and culturally rich urban experience. The centerpiece is Waterfront Toronto, North America’s largest urban renewal project, which is revitalizing 800 hectares of brownfield shoreline with 40,000 residential units, parks and one million square meters of commercial space designed to the highest environmental standards. Offering 1 Gbps fiber-based broadband– provided at no cost to the 10% of housing set aside for low-income residents – the Waterfront is expected to offer a home to 40,000 new jobs focused on knowledge industries. Early commercial tenants include the Corus Entertainment and the George Brown College Health Sciences campus.

Future on the Waterfront

Though impressive in size and scale, the Waterfront is only the most visible of many public-private collaborations through which the city is pursuing an ICT-powered future. The MaRS Discovery District supplies housing, incubation, acceleration and investment services to hundreds of early stage portfolio companies downtown, while the Ryerson University Digital Media Zone gives entrepreneurs space and services to move great ideas to initial commercial success. The Centre for Social Innovation does the same for social innovators and its successful model has led to operations across four locations in two countries. Toronto’s libraries offer computers and training to tens of thousands, while outreach programs equip families with inexpensive IT, connectivity and training. With C$2 billion planned for transportation investment over the next 25 years, Toronto is preparing the physical, human and digital infrastructure for continued success.

In the News
Read the latest updates about Toronto.

Want to know more about Toronto?
Toronto was featured in the Intelligent Community Forum book Brain Gain.

Population: 2,791,140

Labor Force: 1,423,270

Website: www.toronto.ca

Intelligent Community of the Year 2014

Smart21 2013 | 2014

Top7 2005 | 2013 | 2014

Surrey is a city in transition from a suburban past to a sustainable urban future. On this road, it seeks to leave behind a reputation for sprawl, crime and limited economic potential. Home to some of the richest and poorest neighborhoods in the region, Surrey is building an innovation-based knowledge economy offering a much broader range of local opportunity.

Innovation Boulevard

There is no lack of potential in Surrey: it is Canada’s third fastest-growing city, which welcomes 1,000 new residents each month and where residential construction is a major industry. It is part of the growing metropolitan area of Vancouver, from which it derives most of its economic energy today. To gain greater control over its destiny, Surrey has developed a diversification strategy calling for deepening the partnership between its institutions of higher learning and local business. Development is focused on an Innovation Boulevard project, where the city, universities and business are building clusters in health technology, clean tech and advanced manufacturing. Overseeing the project is the Mayor’s Health Technology Working Group, comprised of 50 representatives from universities, a health authority, nonprofits, business associations, government and developers. Ten new health technology firms have already moved in, attracted in part by the availability of five new advanced laboratory spaces. It is one component of a master plan to create several dense and walkable city centers supporting a mix of residential and commercial space linked by light rail.

Smart and Sustainable Plans

Surrey’s past was enabled by the automobile. A new Sustainability Compact, developed with substantial public consultation, aims to change that dynamic by focusing on emissions reduction and thoughtful adaptation to climate change. The city has achieved a 70% waste diversion target ahead of schedule and completed a district energy system for city buildings and future high-rise residential towers. A range of smart-city systems, from a central traffic management center to the MySurrey App, are improving livability and better engaging with citizens. And for those on the wrong side of the digital divide, the library system is training thousands of residents in digital skills as part of a comprehensive poverty reduction plan. Surrey’s goal is to boost local employment by nearly 50%, which will keep more wealth in the community and better balance the tax burden between residents and business.

In the News
Read the latest updates about Surrey.

Population: 508,404

Website: www.surrey.ca

Smart21 2015 | 2016

Top7 2015 | 2016

At the turn of the new century, Stratford had a reputation for being quaint, cultured and out of the way, home to the Stratford Shakespeare Festival and a 90-minute drive from Toronto, the business capital of eastern Canada.  The Festival is a home-grown success story in cultural tourism.  Founded in 1953, it became the largest employer in the city and generated hundreds of millions of dollars in local economic activity in ticket sales, restaurants, lodging and culture.    

This economic center complemented Stratford's industrial base, which supplied the North American automotive and aerospace sectors.  But in the last Nineties, the city's forward-looking leadership saw that the growth opportunities of the future would depend on information and communications technology.  

A Network for the Shakespeare Festival

Since then, a team led by Mayor Dan Mathieson has executed on an Intelligent Community strategy with great intensity. The city-owned utility has built out a 70-km open access fiber network with a WiFi overlay, and signed sales agreements with commercial carriers to deliver triple-play and mobile services. The network enabled the Festival to significantly expand its online marketing, and plays a key role in the city’s tourism strategy, which builds on the Festival’s reputation to attract “foodies,” cyclists and other target groups throughout the year.  At the same time, the city has used the network to slash its own telecom costs and power a smart meter program.

Digital Media Campus

After nearly a decade of planning and development, Stratford succeeded in establishing a satellite campus of the University of Waterloo that leverages the presence of an outstanding source of content: the Shakespeare Festival.    

The school launched with a Masters program in digital media, which is structured to end with internships that lead to employment.  It attracts students from arts, engineering and business, deliberately mixing them on interdisciplinary teams that forces them to understand other points of view and to collaborate on projects.  They have access to production facilities, digital editing suites and a large number of project rooms for highly experiential programs. 

The school followed with an undergraduate program, which admitted 93 students from 400 applications in its first year. The program mixes art, business and technology instruction, with the goal of taking students passionate about and art and teaching them business and technology, while exposing business students to the art and technology of digital media. Bundled into the program is project management instruction, so that students emerge with a professional certification in project management.

Creating a Home for Innovation

Having established an institution to produce digital media professionals, Stratford went on to create a home for innovators. Housed in an historic building downtown, the Stratford Accelerator opened its doors in 2012 with seven clients.  It offers housing and advisory services to early-stage tech companies from concept through commercialization.  It is an outgrowth of the Waterloo Accelerator Center, which has served 100 companies, of which 50 have graduated and half have stayed in the region, generating an estimated C$80m in revenue.  Supporting the companies are five in-house mentors and an entrepreneur-in-residence, who advise on finance, marketing, product development, manufacturing and other fields, as well as helping companies set milestones and execute against them. In addition to long-term relationships with start-ups, the accelerator offers a 3-month program called Pathfinder, that is designed for people with an idea they want to explore but who are not yet ready to devote full time to it.    

With each addition to Stratford’s ecosystem, the city’s attractiveness to innovators has increased.  The economic development team has successfully sold Stratford as a test bed for tech­nology projects – a city large enough to give new technolo­gies a meaningful test but easy to operate in due to its small size.  Toshiba, Cisco, BlackBerry, Inter-Op and Clemson University all have pilots running in Stratford. These interna­tional brand names lend validation to a strategy that has proven its value to the city.  

The near-death of the North American auto industry pushed unemployment in Stratford to 7.9% as the city lost 1,600 mostly low-skilled jobs in manufacturing. But the city also gained hundreds of new jobs requiring ICT skills, and has recently seen the revival of automotive create a labor shortage for the higher-skilled manufacturing jobs it retains. For an economy in transition, these trends are a serious validation that it is on the right track.

In the News
Read the latest updates about Stratford.

Want to know more about Stratford?
Stratford was featured in the Intelligent Community Forum books Brain Gain and Seizing Our Destiny.

Population: 30,886

Website: www.city.stratford.on.ca

Smart21 2011 | 2012 | 2013

Top7 2011 | 2012 | 2013

Most of the world celebrated the start of the new century in 2000, but it was a time for mourning in Saint John.

A shipbuilding contract from the Canadian government came to an end and a major food manufacturer closed its plant in the same year. A long period of industrial decline had suddenly reached crisis point.

Despite being home to New Brunswick's telephone company, NBTel, and a branch of the University of New Brunswick (UNB), Saint John developed some of the poorest neighborhoods in the province. But while it had Canada's largest per capita decline in manufacturing from 1989 to 2003, it also saw 8% growth in services, double the Canadian average.

Battling Decline

To accelerate that positive trend, the city created a partnership with education, health care, provincial government, cultural institutions and business. It targeted ICT, life sciences, tourism, energy and advanced manufacturing for growth. Its timing was good: a local cable TV company (owned by a local entrepreneur) had just launched a competitive battle with NBTel that accelerated broadband deployment. In a strategy called True Growth, the city engaged with local employers and educators to identify and recruit skilled young people emerging from secondary school and university. It also recruited skilled immigrants and launched a mentorship program to connect immigrant entrepreneurs with business executives.

UNB did its part by partnering with a major employer to create an Executive MBA program for working executives. Meanwhile, a group of local entrepreneurs and angel investors formed PropellICT, a technology incubator with a difference. PropellICT focused on mentorship instead of office space, pairing entrepreneurs with senior business executives. In its first 3 years, PropellICT nurtured 21 start-ups, of which Radian6 became its most successful and best known, and went on to host the region's first angel investor conferences.

Meanwhile, local executives formed the Business Community Anti-Poverty Initiative, which attacked the root causes of multi-generation poverty, from helping new mothers properly nurture their children to tutoring students and intervening with at-risk teens. As it entered the second decade of the new century, Saint John found itself with much to celebrate and much more to do.

Population: 68,000

Labor Force: 35,615

Website: www.saintjohn.ca

Smart21 2012

Top7 2012

The first decade of the 21st Century was a good one in Quebec City. Home to the Quebec provincial government as well as thriving technology, research and creative sectors, the city region achieved one of the highest GDP growth rates in Canada (+24%) while unemployment fell from 9% in 2000 to 4.9% in 2013 and 73,000 jobs were created. Economic success was the product of business-government-university collaboration that stretched back into the Nineties, including a 1997 high-tech business summit leading to creation of a downtown tech district, a 1998 economic diversification strategy, and the birth, in 2003, of a regional economic development agency. Progress received a push forward from the 2002 amalgamation of 12 municipalities into an expanded City. Today, seven industries – including life sciences, ICT, value-added materials, transportation equipment, financial services, energy and tourism – generate 44% of the region’s $325bn in GDP.

Building a Skilled Labor Force

In the century’s second decade, Quebec City is challenged to head off growing labor shortages in these fields and to boost the rate of commercialization of the innovations emerging from public and private R&D spending. It has also targeted the digital divide that affects almost one in five residents. To build its skilled labor force, Quebec City and financial partners are investing over $4 million in such initiatives as “It’s Cool to Stay in School,” which encourages students to finish high school and explore science and technology careers. Young people are exposed to companies, workshops, internships and mentoring to motivate their involvement in the digital economy. The Quebec International agency provides online marketing to potential immigrants and programs that facilitate their application for residency and integration into the economy.

City government supports technology entrepreneurship with scholarship programs, a public-private crowdfunding initiative, and innovation events that involve startups and organizations in tackling business and public-sector problems. The city is also the recipient of a Smarter Cities Challenge grant from IBM that aims to reduce the “digital divide population” by 4% through 2016. Meanwhile, the nonprofit ZAP Quebec continues to expand a city-wide set of 500 WiFi hotspots that complement the 98% broadband availability provided by the private sector. With this range of programs, Quebec City hopes to ensure that its story of growth continues into the next decade.

In the News
Read the latest updates about Quebec City.

Want to know more about Quebec City?
Quebec City was featured in the Intelligent Community Forum book Seizing Our Destiny.

Population: 516,625

Website: www.ville.quebec.qc.ca

Smart21 2011 | 2012 | 2014

Top7 2012

Ottawa and Gatineau are cities on the opposite banks of the Ottawa River, with English-speaking Ottawa on the Ontario side and Gatineau in French-speaking Quebec Province on the other. Together, they form a metropolitan area of over 1 million people. In addition to language, one more thing distinguishes Ottawa from its sister city: since 1867, it has been the capital city of Canada.

As with other national capitals, the main business of Ottawa has long been government. Total Federal government expenditures have risen from C$16 billion (US$14bn) in 1970 to C$158 billion (US$134bn) in 2001, though a growing economy has actually reduced Federal spending as a percentage of GDP. While most of that spending is distributed across Canada's vast land mass, the nation's capital naturally benefits. Today, 13% of the current labor force of Ottawa-Gatineau consists of Federal government employees.

But, like the capital region of other nations, a strong government cluster has also attracted businesses that depend on government policies and spending decisions. Canada's telecommunications industry, once state-owned, is headquartered in the region, and defense, security, software and life sciences companies have found good reason to locate offices and research facilities there. Current employment in the region's more than 1,800 high-tech companies is equal to 11% of the total labor force, even after the technology bust at the turn of the last century.

Besides being prosperous and dynamic, Ottawa-Gatineau is a nice place to live. It enjoys a beautiful natural setting at the junction of three rivers and boasts the lowest cost of living of any major North American city. It was ranked sixth in the world for quality of life by the Swiss firm Corporate Resources Group, and a cross-Canada survey recognized the region as the best place to live and work in the nation.

Ottawa 20/20

Given this situation, the region's political leaders could be forgiven for resting smugly on their laurels. But they have done nothing of the kind. In 1999, the City of Ottawa formed The Ottawa Partnership (TOP), a group of public and private-sector leaders who advised government on growing and sustaining the local economy. In 2001, the area completed a political reorganization that united a regional government body and 11 urban and rural municipalities, including both Ottawa and Gatineau, into one local government structure. As part of that process, the new government published a plan called Ottawa 20/20. Its goal was to establish a unified planning, zoning and development scheme that would see the community through the next 20 years as its population increased by as much as 50%. Following a performance review of the first five years, the government recently published a detailed plan for 2006-2009 focusing on economic development, equality and privacy issues. With an overall goal of making Ottawa-Gatineau an "Innovation Capital," priorities include workforce skills development, improving knowledge sharing among businesses and citizens, linking innovation more effectively with the marketplace, strengthening entrepreneurship and upgrading marketing.

Behind these priorities are two primary challenges to the region's continued success. Research by The Impact Group in Toronto, in collaboration with H. Douglas Barber, co-founder and retired CEO of Genum Corporation, one of Canada's most successful high-tech firms, shows that Canada suffers from a "commercialization gap" compared with its neighbor nation to the south. Canada is strong in research and development and has some world-class technology companies like Nortel and Mitel, but Canadian business generally lags American business in bringing technology innovation to market. According to Dr. Barber, the key to the problem is the relative inability of government, compared with the private sector, to understand customer needs and innovate competitively to meet them. Statistics from Industry Canada reveal that, in 2000, 68% of funding for R&D came from government and related sources while industry contributed 32%. This is nearly the reverse of the US, where industry spent 67% of each R&D dollar and government spent only 33%. This relative lack of customer centricity and commercial competence tends to produce technology-based enterprises that cannot afford the marketing or R&D needed to succeed.

The other challenge has to do with the region's unique mix of urban and rural areas. In urban areas, 94% of households and 100% of business and government facilities had access to broadband in 2003, whereas availability in rural areas was about 2%. Lack of broadband infrastructure posed a severe constraint on further development outside the existing urban zones.

Changing the Culture

It may be ironic to ask government to tackle a commercialization gap caused by an excess of government over private investment. But Ottawa-Gatineau is pursuing several creative approaches to changing the culture of innovation in business. Leading by example, the city has put dozens of services, from pet registration to utility bill payment, online. A SmartCapital program completed in 2003 introduced a collaborative online catalog of the resources of major universities, institutes and libraries in the region. An Entrepreneurship Center offers assistance in starting and growing companies, and connects them with local venture capitalists. More than 2,400 clients started businesses in 2004 alone, and they created more than 7,800 new jobs and C$205 million (US$174m) in new investment. Annual venture capital investment in the region has grown at an average of 50% per year since 1995, peaking at C$1.35 billion (US$1.15bn) during the technology boom and settling to a more sustainable C$250 million (US$212m) since then. Government, business and academia now collaborate on workforce development programs ranging from math tutoring for talented low-income children to analyzing skills gaps and working to fill them.

Meanwhile, government spurred the formation of a volunteer group, the Ottawa Rural Communities network (ORCnet) to build awareness about broadband and aggregate demand in rural areas. Through workshops, communities meetings and work with the telecom sector, ORCnet helped service providers build a business case for extending broadband into low-density markets. To sweeten the pot, local government put C$1 million (US$850k) into a public-private partnership that is investing C$3 million (US$2.5m) in a network build-out scheduled for completion in autumn 2007, which is expected to largely close the urban-rural broadband gap.

Ottawa-Gattineau has targeted life sciences, which already employs 11,000 people, as well as wireless, VoIP and green technologies as its best hope of future growth as the Innovation Capital. With over 78,000 people employed in high-tech already, the region looks forward to having a technology labor force larger than its Federal labor force, and to seeing privately-funded innovation become the primary driver of its economy.

Population: 1,148,785

Labor Force: 686,000

Websites: ottawa.ca/en | www.gatineau.ca

Smart21 2006 | 2007

Top7 2007

Ottawa and Gatineau are cities on the opposite banks of the Ottawa River, with English-speaking Ottawa on the Ontario side and Gatineau in French-speaking Quebec Province on the other. Together, they form a metropolitan area of over 1 million people. In addition to language, one more thing distinguishes Ottawa from its sister city: since 1867, it has been the capital city of Canada.

As with other national capitals, the main business of Ottawa has long been government. Total Federal government expenditures have risen from C$16 billion (US$14bn) in 1970 to C$158 billion (US$134bn) in 2001, though a growing economy has actually reduced Federal spending as a percentage of GDP. While most of that spending is distributed across Canada's vast land mass, the nation's capital naturally benefits. Today, 13% of the current labor force of Ottawa-Gatineau consists of Federal government employees.

But, like the capital region of other nations, a strong government cluster has also attracted businesses that depend on government policies and spending decisions. Canada's telecommunications industry, once state-owned, is headquartered in the region, and defense, security, software and life sciences companies have found good reason to locate offices and research facilities there. Current employment in the region's more than 1,800 high-tech companies is equal to 11% of the total labor force, even after the technology bust at the turn of the last century.

Besides being prosperous and dynamic, Ottawa-Gatineau is a nice place to live. It enjoys a beautiful natural setting at the junction of three rivers and boasts the lowest cost of living of any major North American city. It was ranked sixth in the world for quality of life by the Swiss firm Corporate Resources Group, and a cross-Canada survey recognized the region as the best place to live and work in the nation.

Ottawa 20/20

Given this situation, the region's political leaders could be forgiven for resting smugly on their laurels. But they have done nothing of the kind. In 1999, the City of Ottawa formed The Ottawa Partnership (TOP), a group of public and private-sector leaders who advised government on growing and sustaining the local economy. In 2001, the area completed a political reorganization that united a regional government body and 11 urban and rural municipalities, including both Ottawa and Gatineau, into one local government structure. As part of that process, the new government published a plan called Ottawa 20/20. Its goal was to establish a unified planning, zoning and development scheme that would see the community through the next 20 years as its population increased by as much as 50%. Following a performance review of the first five years, the government recently published a detailed plan for 2006-2009 focusing on economic development, equality and privacy issues. With an overall goal of making Ottawa-Gatineau an "Innovation Capital," priorities include workforce skills development, improving knowledge sharing among businesses and citizens, linking innovation more effectively with the marketplace, strengthening entrepreneurship and upgrading marketing.

Behind these priorities are two primary challenges to the region's continued success. Research by The Impact Group in Toronto, in collaboration with H. Douglas Barber, co-founder and retired CEO of Genum Corporation, one of Canada's most successful high-tech firms, shows that Canada suffers from a "commercialization gap" compared with its neighbor nation to the south. Canada is strong in research and development and has some world-class technology companies like Nortel and Mitel, but Canadian business generally lags American business in bringing technology innovation to market. According to Dr. Barber, the key to the problem is the relative inability of government, compared with the private sector, to understand customer needs and innovate competitively to meet them. Statistics from Industry Canada reveal that, in 2000, 68% of funding for R&D came from government and related sources while industry contributed 32%. This is nearly the reverse of the US, where industry spent 67% of each R&D dollar and government spent only 33%. This relative lack of customer centricity and commercial competence tends to produce technology-based enterprises that cannot afford the marketing or R&D needed to succeed.

The other challenge has to do with the region's unique mix of urban and rural areas. In urban areas, 94% of households and 100% of business and government facilities had access to broadband in 2003, whereas availability in rural areas was about 2%. Lack of broadband infrastructure posed a severe constraint on further development outside the existing urban zones.

Changing the Culture

It may be ironic to ask government to tackle a commercialization gap caused by an excess of government over private investment. But Ottawa-Gatineau is pursuing several creative approaches to changing the culture of innovation in business. Leading by example, the city has put dozens of services, from pet registration to utility bill payment, online. A SmartCapital program completed in 2003 introduced a collaborative online catalog of the resources of major universities, institutes and libraries in the region. An Entrepreneurship Center offers assistance in starting and growing companies, and connects them with local venture capitalists. More than 2,400 clients started businesses in 2004 alone, and they created more than 7,800 new jobs and C$205 million (US$174m) in new investment. Annual venture capital investment in the region has grown at an average of 50% per year since 1995, peaking at C$1.35 billion (US$1.15bn) during the technology boom and settling to a more sustainable C$250 million (US$212m) since then. Government, business and academia now collaborate on workforce development programs ranging from math tutoring for talented low-income children to analyzing skills gaps and working to fill them.

Meanwhile, government spurred the formation of a volunteer group, the Ottawa Rural Communities network (ORCnet) to build awareness about broadband and aggregate demand in rural areas. Through workshops, communities meetings and work with the telecom sector, ORCnet helped service providers build a business case for extending broadband into low-density markets. To sweeten the pot, local government put C$1 million (US$850k) into a public-private partnership that is investing C$3 million (US$2.5m) in a network build-out scheduled for completion in autumn 2007, which is expected to largely close the urban-rural broadband gap.

Ottawa-Gattineau has targeted life sciences, which already employs 11,000 people, as well as wireless, VoIP and green technologies as its best hope of future growth as the Innovation Capital. With over 78,000 people employed in high-tech already, the region looks forward to having a technology labor force larger than its Federal labor force, and to seeing privately-funded innovation become the primary driver of its economy.

Population: 1,148,785

Labor Force: 686,000

Websites: ottawa.ca/en | www.gatineau.ca

Smart21 2006 | 2007

Top7 2007

The capital cities of states and nations have an unfair advantage. Businesses that sell to government tend to cluster there. The business of governing also dominates their economies and, generally speaking, government responds less to the economic cycle than business. Good times may not be as good but bad times are eased – in fact, demand for government services typically rises in a recession.

Ottawa appears to be an exception to the rule. Three times in the past fifteen years, it has passed through recessions that tested the foundations of its economy. But each time, Ottawa has adapted, rallied and emerged more dynamic than before.

Canada's fourth largest metro area, Ottawa went through its first downturn in 1995. Faced with a major budget deficit, the national government downsized and devolved many functions to the provinces. Thousands of former government employees were suddenly looking for work. Fortunately, they found it in a set of communications technology companies started in the 1990s that were growing into multinationals, including Newbridge Networks, Nortel, Cognos and Mitel.

The talent released by government became an important resource for a wave of growth that peaked in 2000 – and then fell off a cliff in the telecom recession of 2001-02, when the companies that had fueled Ottawa’s boom suddenly became its biggest liability. Once again, the community adapted. It brought to bear its significant R&D capacity in communications technology, expertise in military software security and semiconductor design. Companies diversified out of reliance on wireline telecommunications and into wireless, gaming, digital media and medical devices. Growth resumed as telecommunications bottomed out and a broader range of technology companies hit their stride.

For Ottawa, the financial crisis of 2009 was headlined by the bankruptcy of Nortel, its largest private-sector employer and major contributor to research and development. Yet while Canada's unemployment rate moved toward double digits, Ottawa's rate remained below five percent, despite the drastic restructuring taking place at Nortel. Ottawa's position as Canada's capital surely gets some of the credit. But equally impressive is the city's track record of investing in information and communications technology, creating an environment that nurtures the start-up and growth of ICT-based companies, and equipping its citizens to prosper in that environment.

Infrastructure for Growth

Despite being a major population center, Ottawa is hardly an urban jungle. Ninety percent of its land is rural, where just 6% of the population live. In 2006, only 2% of that rural population had access to broadband. But by 2012, through the Rural Broadband Expansion project funded by the city, broadband passed 100% of all homes, businesses, government offices and educational facilities throughout the city. In a survey of rural business owners, 75% said that access to broadband had improved their sales and profitability and 15% said that they would be forced to relocate if broadband access were not available. The survey also asked employees living in rural area about the economic importance of broadband to them: 20% said they would not be able to continue working for their current employer without it.

The public library system has backstopped this broadband deployment with free high-speed Internet access at all 33 branches since 2001, when it also introduced free computer and Internet training courses for the public. In 2008, over 1,500 people attended courses specifically targeting older adults and newcomers to the community.

Working in close collaboration with its educational institutions, Ottawa has built another kind of infrastructure as well: one that develops talent, nurtures start-ups and connects them to opportunity. At the center of this effort is the Ontario Center for Research & Innovation (OCRI), an economic development nonprofit funded by government and more than 700 member companies, which fosters the advancement of the region's knowledge-based institutions and industries. OCRI's goal is strikingly simple: to make Ottawa recognized as one of the most innovative cities worldwide. It acts as a catalyst and contributor for government, university and private programs reaching from research labs and incubators to school classrooms.

OCRI's path was set by a plan issued in 2000 titled Ottawa 20/20. It identified government, tourism and technology as the three pillars of the local economy. It committed the city to continuing collaboration among government, industry and education, with a focus on cluster-based development and the nurturing of talent. Ten years later, a working group refreshed the 20/20 strategy to drive the community's contined growth. The working group's membership is a portrait of collaboration in action, with representatives from Ottawa's colleges and universities, OCRI, city government and the life sciences, cleantech, ICT digital media and software sectors. The emerging plan aimed to create an "innovation architecture" that supports the next generation of technology companies with the people and services they need to prosper.

Harvesting Talent

The 2001-02 downturn of the telecom sector had an unexpected impact on education in Ottawa. As telecom moved from regional darling to regional dog, enrollment in secondary school science and math programs plummeted, which soon translated into lower science and engineering enrollment at the university level. The tech sector recovered but interest in science and engineering education did not. By 2006, Ottawa's tech clusters were flagging the problem as serious and asking OCRI to develop a solution.

In 2008, OCRI worked with the Ministry of Education to introduce a Specialist High Skills Major for grades 11 and 12 focusing on ICT. In the same year, OCRI also introduced a High School Technology Program at two area secondary schools. Over the course of one term, students participated one day per week in classes on computer hardware, networking, team building and technology career opportunities. The entire program was built around social computing and the open source community. Equipped with XO laptops provided by participating companies, students worked in school and in consultation with technology firms to create software projects of their own. The first year was successful enough to justify expanding the program to four schools in 2009.

To further increase interest in STEM at the secondary level, Ottawa has also developed TechU.me. The program provides access to real-world, curriculum-based challenges, aiming to equip high school students with enhanced critical thinking and technology skills for their future careers. TechU.me also employs a group of skilled mentors to guide and assist their students. Since the program’s launch in 2012, 5,000 students have participated, and Ottawa high schools have seen a 35% increase in computer science enrollment.

Another program, Winning Innovation Networks for Schools (WINS), connects tech companies with students to graphically demonstrate career opportunities in the community. The first WINS project sent 100 students and fifteen teachers on site visits to four employers in the cleantech and medical device sectors. The next project will invite biology classes to help local medical device companies work on technology challenges identified by the companies, from sleep sensors to neurological rehabilitation.

While OCRI has focused on secondary school, Ottawa's colleges and universities have rolled out new programs to serve an economy undergoing continuing change. The University of Ottawa now offers cross-faculty courses in entrepreneurship and e-business, as well as a Graduate Certificate in Modeling and Animation for Computer Games. Carlton University created a Bachelor of Engineering in Sustainable and Renewable Energy and partnered with Algonquin College on a Bachelor of IT. Algonquin meanwhile launched its own School of Media & Design for Animation and partnered with OCRI on an Ontario Youth Apprenticeship Program, which grants secondary school students college credit for high skill majors.

The community has given equal attention to the "last mile" between the end of education and the start of employment, when the most talented students face a choice of where to start their careers. TalentBridge is an OCRI program that provides entrepreneurially-inclined university students with government-funded part-time jobs, working under experienced mentors, at local technology companies. The companies get the benefit of fresh thinking and new energy, while students gain business experience and often make the move into full-time positions with the companies.

Ottawa serial entrepreneur Terry Matthews has created the Wesley Clover Affiliate Program, named for his investment firm. Wesley Clover works with local universities to identify the brightest and most motivated new graduates, puts them through a "boot camp" training program for 9-12 months, and then pairs them with industry leaders in specific vertical segments. The aim is to introduce a new product into the market within 12 months of team formation. From 2007 to 2016, the program has expanded its portfolio of affiliates and startups to include more than 100 companies with over a 90% success rate.

Entrepreneurial Production Line

Capitalism's great benefit is the efficiency with which it moves resources out of unproductive uses and into productive ones. Ottawa attempts the same trick with entrepreneurial talent, through a range of programs designed to identify potential entrepreneurs, give them support and training, and point them toward success.

OCRI's Business Accelerator targets high-potential companies and offers them coaching, market analysis, support services, and access to OCRI's global network of investors for six months to a year. It aims to help young companies shift into high gear through market entry and financing. When they do, they can also take advantage of OCRI Global Marketing, which maintains relationships with Canada's representatives throughout the world.

Lead to Win identifies seasoned managers of technology companies who have been turfed out by corporate downsizing and helps them launch new technology-based businesses. The program originated in 2002 during the telecom recession and was revived when the latest downturn struck in 2008. Applicants accepted into the program receive training on business ecosystems, entrepreneurial management, and success factors for start-up tech companies. Those who start businesses are connected to strategic customers, sales opportunities and resources including financing. Out of the 61 participants in 2009, over 60% launched businesses, and in 2014, those five-year-old companies generated over $19.3 million in revenue. Lead to Win was ranked among UBI Global’s top ten North American business incubators in 2015.

Helping Hand

Ottawa's success in technology has yet to produce a substantial private venture capital sector ready to fund start-up and early-stage companies. National and provincial programs fill some of the gap. Ontario Centers of Excellence offer up to C$250,000 for market readiness and proof-of-concept programs. An Investment Accelerator Fund offers investments of up to C$500,000 to help launch high-potential technology ventures. The Emerging Technologies Fund matches private-sector investment up to C$5 million in early-stage companies, while the Next Generation Jobs Fund supports R&D and commercialization in new industries such as cleantech, biotech, ICT and digital media.

Funding from government finds a match in the nonprofit sector, which draws from foundations and private industry. Ottawa is home to the Canadian Photonics Fabrication Center, the Carleton University Visualization and Simulation Lab, the NRC Institute for Research in Construction and Ottawa Hospital Research Institute. Sustainable Development Technology Canada has allocated a total of C$425 million to 171 projects at local tech companies focusing on climate change, air and water quality, and soils research.

Ottawa’s government also aims to help Ontario and the nation as a whole accelerate Canada’s medical industry. The Medical Device Commercialization Centre (MDCC) recently received $14.9 million in federal funding to be used to link medical device innovators, such as universities, colleges, research institutes, hospitals and corporations, with users, including investors, hospitals, healthcare systems and, of course, patients. MDCC’s experts will be providing assistance with many different areas of development and delivery, including analyzing and confirming clinical market needs, advancing and optimizing prototypes and other solutions, testing and clinical trials, obtaining regulatory approvals and licensing, and even launching devices to market. As of today, the Centre’s experts are in the process of assessing 500 different medical technologies with the hope of advancing at least 20 of them to revenue generation and clinical use.

Will cleantech, biotech, 4G wireless and gaming provide the next boom to Ottawa's economy, perhaps to be followed by the next bust? In recent years, high-tech has edged out the Federal government as the single largest contributor to Ottawa's GDP. The new diversity of its industries, and the intense collaboration among business, government and education, promise a future even more exciting than its past.

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Ottawa was featured in the Intelligent Community Forum book Seizing Our Destiny.

Population: 1,111,700

Website: ottawa.ca/en

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