As I mentioned in my last posting, I have recently spent time in Canada as a guest of their government. A key focus was to better understand how Canada, with an inherently low risk culture, was advancing its innovation agenda. One example stood out.
Waterloo is a region of only 500,000 people, and within 20 years has developed into the second largest generator of start-up companies in North America (only beaten by Silicon Valley). The locality now has many research-intensive companies including a number of multinationals who have been attracted, along with national laboratories (such as the Institute for Quantum Computing) and philanthropically supported research institutes (including the Perimeter Institute for Theoretical Physics).
At the heart of the Waterloo success lie four factors that create a vibrant ecosystem:
- a notably collegial culture
- the leadership and mentorship shown by entrepreneurs
- the approach of the University to have a very innovative and non-possessive approach to promoting entrepreneurship
- the approach of the regional business and civic community, particularly through the Chamber of Commerce.
The collegial interplay between business leaders, academia and young entrepreneurs is remarkable, but could well be developed in New Zealand with the right catalysts.
The University of Waterloo has an industry-facing set of programmes in teaching without compromising its academic focus. Students undertake alternate semesters in the private sector (being paid as interns) — this extends across all faculties, and means the students take an extra year to complete a degree. The courses are oversubscribed fourfold because the employment outcome is very high.
The University actively promotes student entrepreneurship at every level, to the extent that it makes no claim on intellectual property generated by staff or students; there are protocols of how it is managed but essentially the university gets out of the way. The result is an enormous amount of entrepreneurial thinking in staff and students that is then supported through various incubator/accelerator facilities on and off campus.
The University manages a science park, which now has as tenants some of the most research intensive companies as well as national research laboratories and private research institutes. Both the regional and Federal governments have contributed in several ways.
The second component is Communitech, which is both a physical entity and a broader virtual entity. It started 15 years ago with several successful business people thinking about what they could do to promote innovation-focused growth of small and medium enterprises in the region.
They established a peer-to-peer mentoring programme. Over time this mushroomed into some 40 support groups of different kinds. Now, more than 800 companies ranging from multi-billion dollar companies to start-ups are in the network. The physical headquarters is a refurbished building which contains meeting spaces, offices and work spaces for about 50 start-ups, university incubator space, offices of large companies like Google, knowledge service providers (such as intellectual property consultancies) and display areas.
The key is mentorship, and the network now employs retired chief executives of successful companies (8 fulltime equivalents) to act as mentors to over 300 companies. These mentors have become the providers of advice and recommendations to angel investors and venture funds. The result is more than 250 start-ups a year, and they are now starting to see a number of high value exits.
No system is directly translocatable from one jurisdiction or culture to another, but Waterloo provides a highly successful demonstration of some innovative thinking involving the public and private sectors and academia. We need to reflect on such lessons.