Delegates share views on cluster growth and government’s role in accelerating process

RE$EARCH MONEY Conference

The precarious nature of technology cluster formation and the Liberal administration’s objective of creating 10 internationally recognized clusters by 2010 were the subject of intense debate at the second annual RE$EARCH MONEY conference last month. Speaker after speaker noted that true clusters emerge many years after the seeds of their formation have been planted, and that government is best suited to play a supportive role by establishing the proper environment for clusters to grow.

The RES$EARCH MONEY Conference — Technology Clusters: By Accident or Design? — featured approximately 150 expert panelists and delegates from across Canada who discussed the many aspects of cluster formation. Few doubt the importance of technology clusters for any nation aspiring to create a prosperous knowledge-based economy. But the road to successful cluster formation is less clear, and opinion differs on how governments can stimulate and accelerate their growth.

The day’s debate was framed by an introductory presentation from Roger Voyer, a senior associate of The Impact Group. Voyer has studied clusters around the world and crystalized his observations on the characteristics of successful clusters in a schematic he calls the cluster octagon (see box). There was a suggestion from the floor that international benchmarking and inter-cluster linkages could be added to the list.

Among the advice Voyer gave to those trying to encourage cluster development:

• cluster development can be accelerated through planning and sustained support;
• A commercial orientation to stimulate cluster development is preferable to a scientific orientation;
• capture the design functions of multinational enterprises where possible; and,
• move to higher, value-added function in clusters where assembly and production functions dominate.

Most panelists agreed that government should abstain from setting targets for technology clusters, with some zeroing in on the Innovation Strategy’s much maligned target of creating 10 internationally recognized clusters by the end of the decade.

“I think it’s an absurd strategy,” said Dr Stuart Smith, chairman of Ensyn Technologies Inc. “To say you’re going to create internationally recognized clusters by government fiat just won’t be done … When government has helped, it’s usually by accident.”

Stuart says the major roadblock to accelerating cluster formation in Canada isn’t the lack of research but a paucity of R&D intensive firms to create technology pull. He suggested that government procurement activities should be strengthened and a program like the defunct unsolicited proposals program should be revived.

“This is something that the country could use again,” he said. “It would make much better use of our government laboratories.”

Univ of Toronto professor Dr David Wolfe noted that cluster formation is often an unintended consequence of policy policy, pointing to the link between Toronto’s multimedia cluster and Canadian content broadcast policies of the 1970s.

GOVERNMENT PLAYS SUPPORTING ROLE

Government was deemed to have a distinct role in supporting cluster formation by ensuring that the right fiscal, educational and other environmental conditions were in place to underpin cluster growth, but should refrain from any direct intervention.

“I see government’s role as setting the table but not preparing the food. Government has got to work hard to get the environment right that’s conducive to business, whether that’s taxation or on the regulatory front, or providing stable, long-term and sufficient funding for R&D to flourish,” says Norine Heselton, VP of the Information Technology Association of Canada.

The complex process of cluster formation and the various stages a cluster must go through before reaching maturity provided the basis of the conference’s main sessions. Existing clusters were represented by panelists from Ottawa, Montreal and Saskatoon, while Waterloo (information technology), Montreal (nanoscience) and Vancouver (fuel cells) examined issues surrounding emerging clusters.

KEY ISSUES

For emerging clusters, sound public policy, effective intellectual property and commercialization policies and adequate incubation space near universities were considered critical for accelerating cluster formation.

In Vancouver, fuel cells development was spurred in part by California’s tough laws for vehicle emissions. A key engine for cluster formation is the National Research Council’s Innovation Centre, which helps to husband research coming out of the university sector and performs basic research that firms are unwilling or unable to undertake.

Waterloo’s information technology cluster was sparked by a decision in the 1950s by the Univ of Waterloo to introduce co-op education, laying the basis for early-stage company formation. Greg Barratt, president of Communitech Technology Association Inc, says his organization was formed in the mid-1990s to accelerate cluster growth, exploiting the strong entrepreneurial focus of the local business community. Communitech was largely modelled on the Ottawa Centre for Research and Innovation, which has been credited with accelerating that city’s photonics and communications cluster.

The role of Nortel Networks Corp in stimulating the Ottawa cluster was outlined in a keynote address by Greg Mumford, Nortel’s chief technology officer. In addition to excellent research and a rich academic and government knowledge base, Mumford says the key to sustaining a cluster of Ottawa’s size is effective taxation and regulatory policies and collaboration between the government, academic and private sectors.

A detailed document outlining the conference’s participants and the main issues of debate is posted on the RE$EARCH MONEY web site. To obtain the document, go to: www.researchmoneyinc.com.

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