UW's role in local high-tech 'cluster'

Waterloo - What keeps 455 high-tech companies in Waterloo Region, and encourages more companies to put down roots here, isn’t the opportunity to be near their customers or suppliers, it’s “the embeddedness of the University of Waterloo” and the community’s culture, a trio of researchers say.

Allison Bramwell, Jen Nelles and David A. Wolfe of the University of Toronto make that claim in an article published in the February issue of the British journal Regional Studies. It’s the most recent paper resulting from their continuing research into “industrial clusters” from Silicon Valley to Waterloo.

The usual assumption is that companies in similar fields that are located near each other must do business together, but that isn’t necessarily so for Waterloo’s information and communications technology firms, their article says: “The interview data reveals that the focus of most economic activity — key customers, sources of supply, competitors, and important strategic partnerships — for the vast majority of firms occurs at the continental and/or global level. . . . Only very few have key local customers with whom they are in regular contact.”

Then why stay in Waterloo? UW is a major reason: “Most firms indicated that it was a distinct advantage to be located in Waterloo because it provided a ready supply of ‘smart and competitively priced’ engineers and because the University of Waterloo is ‘one of the best universities in the world for computer engineering’. . . . Wilfrid Laurier University is regularly mentioned as a source for junior marketing and management people. . . .

“Whether or not they have other linkages with the university, a clear majority of firms actively or regularly hire students from the co-op programme.”

There’s more to UW’s involvement than just providing engineering graduates, and more than just research and technology transfer, says a long section of the article about “extra-firm institutional supports”.

“While there are many formal relationships such as research contracts and funding of research chairs,” the Toronto authors say, “much of the knowledge exchange is more informal than formal. Interviewees cite the university not only as an important source of tech transfer and specialized skills, but also as providing both international cachet to the region, and simple social/professional networks.”

In fact, research links may not always be strong, as some firms “reported difficulty in accessing what was available, not feeling ‘in the loop’, or had a perception that the research efforts at the university were focused on larger companies. . . .

“Large, global firms that collaborate with the university on long-term, core research projects report that the primary benefit of their collaboration is ‘getting the first look’ at research results. They want to keep abreast of what is happening at the research level, even though they know they will not have any proprietary access to the [intellectual property].”

The Waterloo area has something else besides universities, the article says: it has “a high degree of ‘civic capital’, as shown in “well-developed business associations, as well as a vibrant social network and sense of community”. In particular there’s Communitech, an association of companies that helps provide access to “peer-to-peer mentoring and knowledge sharing”, especially for people from smaller firms.

“An important contributing factor to cluster development,” the article adds, “is the presence of local champions with a greater vision than single firm success.” It cites the large high-tech companies in the region — Research In Motion, Open Text, MKS, Descartes — that “try to give back and help local companies, and support the local universities”.

Says the article: “The university is the ‘driving force’ in the cluster, and Communitech is the ‘uniting force’. . . . Whereas purely locational factors, based on demanding local customers, suppliers and competitors, cannot fully explain the Waterloo cluster, local institutions — primarily the University of Waterloo and the Communitech business association — overlaid with regional cultural characteristics provide the glue that attracts and holds innovative high-tech firms.”

Source Daily Bulletin