Clustering round the tech flame

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Clusters have some overlap and it’s possible to develop business opportunities around convergent technologies. These provide a competitive advantage and put a considerable gap between us and other cities.

By James Bowen
From SCAN's Print Edition

Ottawa’s technology clusters are always on the move, continuously reinventing themselves to meet market demands. It’s this agility that has kept them on the cutting edge. And it’s their cluster associations that, working diligently, are making sure they stay there. Medtechlogo.jpg
A cluster, when not talking grapes, is “a significant concentration of companies that have grown around a nub of R&D facilities, suppliers, skilled people, mentoring and risk capital providers,” as defined on the National Research Council’s (NRC) website. Clusters provide an environment for networking, industrial development, investment and commercialization to occur. New companies start when they spin off from the original R&D laboratory.
They find the technical and financial support they need to develop and market innovative products and processes. The success of one company attracts another, and another...eventually building a critical mass of skilled people, opc_logoEdit.jpgexpertise, capital and entrepreneurial drive.
“The more successful technology clusters in North America were formed by companies that were created to meet local requirements for technology-based products and services,” says Denny Doyle, chairman of DoyleTech Corp. “In Ottawa, Computing Devices of Canada Ltd. was formed in 1948 to supply a large electronic trainer to the Canadian navy and a sophisticated airborne navigation system to the Canadian air force.” Thus was created the nucleus of today’s local tech scene. orcca_logo.jpg
According to NRC, there are 11 cluster initiatives across Canada ranging from ocean technologies in St. John’s to fuel cells in Vancouver. Ottawa is listed as the country’s centre of photonics activity, but this categorization shortchanges the city’s wider tech community by a wide margin.
Mike Darch is more than qualified to discuss the dynamics of clusters, having observed them Ottawa_Cleatech_Initiative_Logo-5.jpgclosely over the years. As executive director of global marketing at the Ottawa Centre for Research and Innovation (OCRI) he sees the long-term potential of Ottawa’s clusters. “A cluster needs to build upon its strength…and be able to re-invent itself.” These abilities have been critical in allowing the local tech industry to surf new waves as they’ve arrived,” says Mr. Darch.
“We have deep knowledge of software, telecommunications, semiconductors…and this has kept us on the frontlines of areas such as wireless, security and defence, and VoIP.” Recently he has watched the rise of Ottawa’s cleantech cluster, spearheaded by companies like Iogen, ottawa_software_cluster.jpgwhose cellulose ethanol technology converts biomass into fuel. He notes that local efforts to extract energy from materials like cellulose fibre (found in cornstalks or wood chips, a byproduct of the lumber industry) are “farsighted,” given the controversy over using edible energy sources such as corn.
Looking ahead, Mr. Darch sees the convergence of telecom and software potentially producing new local clusters in telemedicine and bedside diagnostics, a field currently occupied by i-STAT and Epocal, whose FlexCard provides an entire blood diagnostic laboratory on a chip. “The cost and time associated with analyzing patient samples in a central lab is huge,” he points out. “Providing medical personnel with the tools to conduct and owc_logo.jpganalyze medical tests at the patient’s hospital bedside is an emerging market area.”
eBC supports web-based commerce and business models and, specifically, the formation and growth of Ottawa-area eBusiness enterprise. Its chair, Steve Fanjoy, is a certified management consultant with Welch Consulting Group. “Many web-based startups don’t need much capital investment to get going,” he says. “And many of these companies might be under the required capital threshold of most VCs.

“eBC wants to help startups by providing them with, among other things, best practices, lessons learned and successful examples of the bootstrap financing model. Many eBC members were self-financed but have built extremely successful businesses.” In 2008-2009 eBC will be announcing an advisory board of several successful Ottawa-based eBusiness entrepreneurs, “motivated to bring their knowledge back into the broader startup community,” notes Mr. Fanjoy.

The Ottawa Wireless Cluster was set up to foster networking and knowledge exchange for its members, with an emphasis on business or, in the words of its chairman, Neil Knudson, “how to make money.” He points out that because many products combine technologies, “clusters have some overlap,” which could occasion much inter-cluster co-operation. “It is possible to develop business opportunities around convergent technologies,” he says. “And these converged opportunities will provide a competitive advantage to the clusters because the knowledge growth it creates puts a considerable gap between us and other cities.”
Bruce Lazenby, chairman of the Ottawa Software Cluster, says his association’s first goal is to “help software companies create wealth for shareholders – because, quite simply, the local company founders want results.” The group assists its members with matters pertaining to sales, legal issues and corporate structure, among others. “Most of the member companies are young and small, but once a company has ‘value’ it’s amazing how legal issues regarding ownership of intellectual property come in,” says Mr. Lazenby. For the next 2-3 years the group’s focus will be on helping more software companies hit the $5-million mark. “This means that outside boards, financing with VC funding, getting the product to market without using lots of money, and executive mentoring are all important issues,” says Lazenby.

The newly formed Ottawa Clean Energy Cluster (OCEC) is spreading the word that Ottawa is a pulsating hub of clean energy technologies. Representatives of OCEC recently returned from a clean energy mission to China, run by OCRI and Foreign Affairs and International Trade Canada, and are planning a second trip there soon. With its huge demand for energy, China (and India, another country of interest for OCEC) represents a major opportunity for Ottawa’s cleantech companies. “China is a hot market for clean energy and we already have connections into the country and are looking to meet with science organizations, look into marketing issues and find out what innovation is going on over there,” reports OCEC chair Chris Henderson.

Mike Scott, chair of the Ottawa Photonics Cluster, has had an exciting last few months, overseeing OPC’s merger with Toronto cluster OPTIC, forming the Ontario Photonics Industry Network or OPIN. “This will give us the ability to approach the Ontario government for funding and move from being a volunteer group to a professionally run organization. The Ottawa cluster will now be a chapter in the overall organization, creating a sustainable future, a broader network, the ability to hire consultants, and so on,” says Mr. Scott. “The future is bright. Our survey, released June 5, shows that nearly every industry in Canada uses photonics based products. For example, we are looking to host a workshop for the signage industry and others, discussing the latest in lighting capability.”

OttawaMedtech, the capital’s newest cluster group (first meeting, March 20), is chaired by David McInnes, VP of international relations at MDS Nordion, and managed by Mandeep Rayat. “Canada, like many countries, is seeking to manage rising healthcare costs and improve the delivery of healthcare, largely driven by the health needs of its aging population. Our goal is to support and nurture the emerging growth of a diverse medical technologies sector, including medical devices, convergent technologies, and informatics in medical research and healthcare.” Mr. Rayat, his sights set globally, is currently scouting foreign tradeshows where he can promote Ottawa’s medtech.

It’s been said that there is safety in numbers, and Ottawa’s tech companies are finding safety in the form of support through their respective cluster alliances. Like a colony of bees, these associated companies are stronger for working together, sharing ideas and facilitating the migration of workers between tech sectors, a sort of cross-pollination that is keeping companies and clusters strong as they move ahead and grow in new directions.
Note: A report on Ottawa’s nascent entertainment technology cluster and coverage of the capital’s call centre cluster can be found in the June and Feb. 2008 issues of SCAN.

James Bowen, PhD, PMP, CMC is an Ottawa technology entrepreneur and adjunct professor at uOttawa’s Telfer School of Management. If you have ideas for future market or technology focused articles, send them to jbowen@ces.on.ca

Cluster contacts

These are the principal contacts for Ottawa’s main clusters:

Call Centres
callcentres.org
Sandy Freeman
sandra.freeman@sympatico.ca
(613) 723-2870

Cleantech
ottawacleantech.com
Marc McArthur
mmcarthur@ocri.ca
(613) 828-6274 ext. 276

Clean Energy
ottawacleantech.ca/about/cleanenergy.html
Christopher Henderson
chenderson@lumosenergy.com
(613) 562-2005 ext. 225

eBusiness Cluster
ebusinesscluster.com
Steve Fanjoy
SFANJOY@welchandco.ca
(613) 760-4526

Medtech
ottawamedtech.com
Mandeep Rayat
mrayat@ocri.ca
(613) 828-6274 ext. 132
and
David McInnes
david.mcinnes@mdsinc.com
(613) 592 3400 ext. 2285

Photonics
ottawaphotonics.com
Mike Scott
michael_scott@rogers.com
(613) 235-8012

Security
securitycluster.com
David Luxton
dluxton@defsec.ca
(613) 789-5136

Software
ottawasoftwarecluster.com
Bruce Lazenby
bruce.lazenby@hotmail.com
(613) 291-2476

Wireless
ottawawirelesscluster.com
Neil Knudsen
nknudsen@sympatico.ca
(613) 288-4212

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