Waterloo Summit: What Drives a Successful Innovation Ecosystem?

David Fransen

“It truly takes a community to build an industry, [but] it is the role of government that remains most unclear to me.” 
-OMERS Ventures CEO John Ruffolo in an open letter

"Collaboration, integration, mentoring and soft spaces were among the common elements of successful innovation ecosystems described...at the Waterloo Innovation Summit." 
-The Waterloo Innovation Summit blog

VX News: With the Waterloo Innovation Summit that you organized in the Province of Ontario, Canada just concluded, share its themes and who attended.

David Fransen: The theme of the conference was Innovation Ecosystems: Foundations for Growth in the 21st Century. The target audience was leaders of the various elements that go into making up a successful innovation ecosystem: the university community, the public sector/government community, the private sector, and finally, incubators and accelerators that are particularly focused on nurturing startups.

VX New: Expand on who was enticed to attend—the composition of the summit’s audience.

David Fransen: We attracted a cross-section of the target audience we were looking for. Our largest segment was the business community.

We had about 280 people, and roughly one-third to half were private sector leaders. Then there was a significant component from the government sector—both federal and provincial, and not just from Ontario, but also from across Canada. Incubator leaders from across North America participated, and we also had representatives from Denmark, the Netherlands, and New Zealand. The latter added an international flavor to it.

VX News: What is the value for Waterloo—the university and the metropolis— of holding an innovation summit?

David Fransen: Thanks to being named Canada’s most innovative university 22 years in a row in Maclean Magazine’s national rankings, the University of Waterloo owns the brand in Canada. It founded the Waterloo Innovation Summit three years ago in order to “internationalize” this brand. By convening private and public sector leaders on issues that matter in the innovation space, the Summit provides an opportunity to showcase the U of W’s contribution to local innovation and its connection to the Waterloo Region.

VX News: While Canada’s Consul General based in Los Angeles, you hosted a like cleantech innovation panel for VerdeXchange Green Marketmaker’s Conference.  What’s unique about Waterloo’s evolving entrepreneurial ecosystem?

David Fransen: One thing that struck me when I returned to Waterloo after six years in LA was the way in which an entrepreneurial mindset had taken over here. When I left to go to Los Angeles in 2008, there were some startups and there was some sense that entrepreneurship was important. But when I returned in 2014, I was amazed at the number of startups and the way in which the entire community had given itself over to supporting their creation.

While I was in LA, the thing one heard about Waterloo—since it was the headquarters of Research In Motion—was that things were really tough for the company. It was going through one crisis after another. With a large company like that in a relatively small community, one always worries about the impact on the community—in terms of jobs, but also more generally, in terms of the mindset and mood.

While there were indeed job reductions at BlackBerry, that unleashed a lot of really smart, creative people into the business community. Those people were finding themselves in smaller companies as founders or were working with founders. The energy went way beyond what had existed before.

VX News: Please share takeaways from the summit’s keynoter contributions.

David Fransen: We had three keynotes: Steve Blank, the so-called “godfather of Silicon Valley” and founder of the “lean startup” method; Salim Ismail, the founding executive director of Singularity University; and Mariana Mazzucato, an American citizen now working in the UK who has written a book called The Entrepreneurial State.

Mariana’s theme was that, while the private sector is obviously critical to entrepreneurship and the growth of an economy, a dynamic, mission-oriented public sector is a critical factor as well. The private sector likes to think of itself as being uniquely responsible for economic growth. But in fact, if you look at some of the most important examples and think about how those ecosystems got started, you have to acknowledge that the government did play a very significant role.

Offset against that, Salim Ismail spoke the following day. His focus is on disruption and the way in which exponential technologies create the conditions for exponential growth. Salim’s point is that the pace and nature of change has accelerated so dramatically that it has vastly exceeded government’s ability to cope. It is a threat to democracy itself that governments are simply incapable of keeping up.

Some pretty interesting messages came across in terms of the relationship between the public and the private sectors. It wasn’t our intention to wrestle these questions to the ground. But we did have senior public government officials there from Ottawa and Toronto.

There was a lot of food for thought in terms of figuring out the appropriate relationship in a world where technology is sometimes outstripping our ability to even understand it.

VX News: Waterloo’s conference repeatedly refers to “innovation ecosystems’ impacts.” In the past, VerdeXchange conferences have included representatives from Toronto’s MaRS and like incubators and initiatives in Korea, Berlin, and California. Elaborate on the concept’s evolving meaning for public sector policy leaders.

David Fransen: The concept has been around for a very long time. Back 25 years ago, when I was working in the federal government on environmental policy at the Privy Council Office, I was thinking about environmental assessment. The notion of ecosystem impacts was critical to our understanding of what needed to be assessed in any environmental assessment.

The thinking about ecosystems has come a long way and is a fully matured concept. That said, when you look at this notion of “innovation ecosystems,” I think there’s relatively new interest in this because of the obvious impact that Silicon Valley has on economic growth, investment, and startups. It’s clear that success there comes from a dynamic relationship among several contributing forces: investors, Stanford, Berkeley, and the young founders who come up with ideas.

What has been the role of the state? What is the role of the state in terms of responding to some of the new developments?

Nobody believes anymore in the notion of some smart person with some smart idea going off to do it on his or her own. They understand that for that smart person to succeed, there are a whole host of different forces that have to be present to contribute to that success.

VX News: In early November, Ontario Premier Wynne is being hosted in Los Angeles by VerdeXchange and LACI. Please compare and contrast how provincial climate change policies in California and Ontario are further enhancing innovation, cleantech, and investment.

David Fransen: I see the same intentionality here in Ontario that I saw in California. California has had the lead for obvious reasons. The concentration of a very large number of people in a relatively confined space led to very obvious environmental impacts, which in turn set up the need for regulation.

In Ontario, we don’t have the same size population. But its concentration in a certain urban area in southern Ontario has created those same conditions, such that we now have that same sense of absolutely needing to address environmental impacts. That’s one factor.

There is very little difference now in terms of the requirement to address impacts and the public consciousness that it needs to be done. We’re looking for the right mix of instruments to do that. In a sense, the awareness in Ontario has caught up to that sense of urgency that’s been in California for a long time.

The relationship between the Ontario government and support for innovation ecosystems in Ontario has been a high priority for the premier. In fact, she was the summit’s opening speaker. Her commitment to education has been longstanding, reflected in her private-sector career before she went into government. The premier has long been looking for measures and support that create conditions for clean growth.

The cleantech sector has been a priority for the premier from the outset. Her trip to California is an opportunity for her to look for synergies between Ontario and California’s cleantech sector. She’s looking to learn. She’s looking to meet with private and public sector leaders, and find out where potential connections can be made.

VX News: Pivoting to another policy issue now current in both California and Canada, is cap and trade in Ontario likely? Will it be similar to Québec’s?

David Fransen: Yes. Over the past several years, Ontario has put in place a number of policies to reduce its carbon emissions, e.g. the Ontario Clean Energy Act, the Feed-in-Tariff regime, the elimination of coal-fired energy plants, etc. Then, in April of this year, Premier Wynne took the next step in that process, announcing that Ontario would be joining Québec and California in the cap and trade regime.

VX News: In past years, at your instigation as Consul General in Los Angeles , VerdeXchange has been a platform for Canada’s cleantech leadership—i.e. Canada’s SDTC and Toronto’s MaRS. Bring us up to date on both as they relate to creating viable, place-based, innovation ecosystems.

David Fransen: Sustainable Development Technology Canada (SDTC) continues to do what it’s been doing for two decades now: providing support to young startups that have technologies of interest or of merit, and then giving them the financing they need until they can do the financing on their own. There does not appear to have been any wavering in SDTC’s commitment.

We’re in the midst of an election campaign. I spend a lot of time looking for comments by all of the party leaders about what they’re planning on this front. It’s striking how little has been said, frankly.

MaRS is continuing to do as much as it possibly can. It’s very clear that the connection between the Ontario government and MaRS has become even stronger over the last year. While earlier there were some financial issues, those seem to have been put to bed. The new building that MaRS has completed is, I think, almost completely occupied. Cleantech is an important part of that.

VX News: Lastly, you and your successor as Consul General, James Villeneuve, have been integrally involved for years in enhancing the economic and policy relationship between Canada and California. Elaborate on the existing and potential synergies between Canada and California with respect to climate change, trade and commerce, and foreign direct investment.

David Fransen: It’s always struck me how California has taken a leadership position in understanding and addressing environmental impacts. Because of VerdeXchange’s focus on that essential Californian character trait of pragmatically seeking the balance among economy, energy, and environment, it always struck me that VX was excellent showcase for Canadian initiatives, programs, policies, and companies.

It was important to me to bring as much contact as I could between California and Canadian counterparts through VerdeXchange. We’ve had representatives from British Columbia, Alberta, Québec, and Ontario in attendance.

At the outset, for me, the contact was with SDTC—helping the California audience understand that, at the federal level, we made a significant contribution to the development of clean technology.

The relationship between Canada and the US continues to be, dare I say, primordial. I challenge anyone to identify two countries whose economies, societies and cultures are more completely—and cordially—intertwined.

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"The private sector likes to think of itself as being uniquely responsible for economic growth. But in fact...you have to acknowledge that the government did play a very significant role." -David Fransen