Lessons from Waterloo
In many ways, Waterloo's history sounds like Pittsburgh's. It used to be the furniture capital of Canada, the shoe-making capital of Canada, and the rubber capital of Canada, but no longer. Many manufacturing plants in these industries are still in the process of closing, laying off thousands of workers.
But despite that, the economy there is booming. Why? Because it's become a center for innovation and entrepreneurship. At the core of that is the University of Waterloo, and the 250-300 companies that have been created from technologies developed there. The best-known of those companies is Research in Motion (RIM), whose founder, Michael Lazaridis, dropped out of the University of Waterloo in the 1980s just before graduation. He is now the Chancellor of that University, as well as the CEO of RIM.
Tom Jenkins, Chairman and Chief Strategy Officer for Open Text Corporation (a $400 million spin-off company from the University of Waterloo that is headquartered in Waterloo), was quoted in The Globe and Mail as saying that the reason companies are growing and thriving there is the "alchemy" in Waterloo -- the cooperation between business, government, and educational institutions. "There is an environment here where if you're an entrepreneur in this town, you're treated with great respect, and I mean from everybody," Jenkins said.
The University of Waterloo is clearly building strength in computer science. Last fall, Bill Gates, the founder of Microsoft, said that in most years, his company hires more graduates from the University of Waterloo than from any other university in the world.
Matthew Nemerson, the head of the Connecticut Technology Council, recently issued a report on a trip he made to Waterloo in May, titled "You won't believe what's happening in Waterloo!".
He notes that the University of Waterloo retains no ownership in any of the intellectual property developed by its faculty and staff. Instead, they encourage them to form businesses in the region.
The university is creating a 120 acre Research and Technology Park to accommodate new businesses and just opened a new 22,000 square foot incubator building there.
Nemerson reports that entrepreneurs who started their companies based on ideas from the University of Waterloo have raised money for a $95 million venture fund earmarked for Waterloo-based companies. He said that the provincial government is considering creating a $50 milion early stage seed fund administered by entrepreneurs.
Nemerson's "three take-away ideas" from Waterloo:
1. Build undeniably world-class academic departments;
2. Encourage a culture that revolves around successful entrepreneurs; and
3. Push government money out through well-trained [private sector] intermediary organizations, like tech councils.