Regional Governance in Ottawa The Commercialization Task Force, an exercise in local governance

ISRN Annual Meeting Vancouver May 12-15 2004

Regional Governance in OttawaThe Commercialization Task Force, an exercise in local

governance Jérôme Doutriaux

University of Ottawa ISRN 6th annual meeting, Simon

Fraser University, May 13 , 2004


Outline

1. Background2. The issue and perceived

problem3. Ottawa is not unique4. In search of a solution


Background

Some definitionsGovernance

Institutions, policies, rules that affect behaviours and outcomes

RegionAn area allowing for easy networking and personal

contacts, such as a CMA


Background

Regional Governance in Ottawa over timeEconomic governance: institutional players

Sponsor(s)Key rolesLimits

Industrial governance: R&D labs, Universities, FirmsSponsor(s)Key rolesLimits

People, EntrepreneursCultureSerendipity


The issue and Perceived Problem

1. Impact of telecom and photonics slowdown on local high-tech jobs, unemployment, VC investment

2. Belief that region has a unique “commercialization” handicap


Perceived Regional weaknesses• Commercialization

– Early tech transfer (spin-offs) quite successful, while

– Growth of existing small firms seems to be limited

• U. of O. Executive Forum with local executives:

– Insufficient management capability– Lack of management leadership– Limited commercialization/sales experience/skills– Limited growth skills


Preliminary research: Ottawa is not unique

• Preliminary Analysis:– Study of the distribution of firms based on

size in the region – Comparison of Ottawa to other technology

regions

• Research team: University of Ottawa (T. Chamberlin,J. delaMothe, J. Doutriaux) and Carleton University (F. Brouard); results to appear as a chapter in a book on SVN (in press; Elsevier).


Initial Observations• Relatively low percentage of very small firms

in Ottawa• Relatively high percentage of medium sized

firms in Ottawa• Why?

• Differences in collection of Data (…preliminary research)• Differences of sectors included in studies• Impact of high VC investment in 1999-2000• Differences in environment• Differences in firm strategies, leadership, culture

• Note that Canadian firms tend to be small by World standards and that large Ottawa-based firms tend to be branches of multinationals


In search of a solution

• The Commercialization Task Force• An exercise in collaboration in initiated by a local

entrepreneur and OCRI• Broad-based (OCRI, GOCC, OLSC, TOP, NCIT, NRC,

ITAC, CATA, Cities of Ottawa and Gatineau, University of Ottawa, Carleton University, Algonquin College)

• Objective is to “identify the problem” and develop an action plan to help local start-ups evolve into global leaders in their market segments

• Delivery would be through OCRI and related organizations


In search of a solution

– Solutions and delivery expected to be “industry driven”

• Focus on exchange and communication rather than the usual pure “networking”.

• Expected to facilitate access to information, to encourage and support sharing of experiences and learning from peers at the top level (leadership, vision), to provide advice/support/training in tech marketing and sales.

• Supported by applied research to fully understand local firm’s barriers to growth in their social-political-economic environment

– CTF mainly institutionally and consultancy driven; well networked but mostly indirect industry representation.


The Preliminary Research:

Comparison of the distribution of firms by level of local employment in various

regions


Data Used

• OCRI database of Ottawa firms– Updated to Q2 of 2003– Limited quality

• Statistics from several other regions– Oxfordshire, Silicon Valley, Sophia Antipolis.– Not exactly similar


Regional ComparisonsOttawa – Oxfordshire – Silicon Valley – Sophia Antipolis

•Ottawa includes telecommunications, photonics, microelectronics, software, life-sciences (1043 firms; 1327 firms if professional services are added)

•Oxfordshire includes: Bio-Technology, Software, Telecom Services, Computer Equipment, Electrical/Electronic Equipment, Instruments, Technical Consulting and Testing, Other R&D, Other Computer Services, Aerospace

•Silicon Valley Includes: BioScience, Computers/Communications, Defence/Aerospace, Environmental, Semiconductor, Software, Professional Services, Innovation Services

•Sophia Antipolis includes only “independent high-tech firms” in software, telecom, multimedia-internet, IT services, health sciences, pharmaceutics.


1 2 to 5 6 to 10 11 to25

26 to50

51 to99

100 to249

250 to499

500 to999

1000andover

PhotonicsLife Sciences

MicroelectronicsTelecommunications

Software0

20

40

60

80

100

120

Number of Employees

Number of Firms

Ottawa, All Technology Sectors

Photonics

Life Sciences

Microelectronics

Telecommunications

Software


159

380

183160

96

5436

184 5

0

50

100

150

200

250

300

350

400

Number of Firms

1 2 to 5 6 to10 11 to 25 26 to 50 51 to 99 100 to249

250 to499

500 to999

1000+

Number of Employees

Distribution of Firms in Oxfordshire (Total 1095)

Series1


58

217

190

223

169

97

56

13 11 9

0

50

100

150

200

250

Number of Firms

1 2 to 5 6 to 10 11 to 25 26 to 50 51 to 99 100 to249

250 to499

500 to999

1000and over

Number of Employees

Distribution of High-Technology Firms in Ottawa (1043)

Series1


15993

3405

23722227

823579 207 93 63 25

0

2000

4000

6000

8000

10000

12000

14000

16000

Number of Firms

0 to 4 5 to 9 10 to 19 20 to 50 51 to 100 101 to250

251 to500

501 to1,000

1,001 to2,500

2,500+

Number of Employees

Distribution of Firms Silicon Valley (Total 25,787)

Series1


149

527

364

401

268

142

99

23 18 120

100

200

300

400

500

600

Number of Firms

1 2 to 5 6 to 10 11 to 25 26 to 50 51 to 99 100 to249

250 to499

500 to999

1000 andover

Number of Employees

Ottawa Technology Firms and Professional Services (Total 1327 Firms)

Series1


Comparing Technology RegionsOxfordshire

(1,095) Silicon Valley (25,787) Ottawa(1,043)

1 to 5 49.2% 0 to 4 62.0% 1 to 5 26.40%

6 to 10 16.7% 5 to 9 13.2% 6 to 10 18.20%

11 to 25 14.6% 10 to 19 9.2% 11 to 25 21.40%

26 to 50 8.8% 20 to 50 8.6% 26 to 50 16.20%

51 to 99 4.9% 51 to 100 3.2% 51 to 99 9.30%

100 to 249 3.3% 101 to 250 2.2% 100 to 249 5.40%

250 to 499 1.6% 251 to 500 0.8% 250 to 499 1.20%

500 to 999 0.4% 501 to 1,000 0.4% 500 to 999 1.10%

1000 and over 0.5% 1001, to 2,500 0.2%

1000 and over 0.9%

Over 2,500 0.1%


Comparing Technology Regions

Oxfordshire (624)Silicon Valley (9,794) Ottawa (768)

6 to 10 32.9% 5 to 9 34.8% 6 to 10 24.7%

11 to 25 28.8% 10 to 19 24.2% 11 to 25 29.0%

26 to 50 17.3% 20 to 50 22.7% 26 to 50 22.0%

51 to 99 9.7% 51 to 100 8.4% 51 to 99 12.6%

100 to 249 6.5% 101 to 250 5.9% 100 to 249 7.3%

250 to 499 3.2% 251 to 500 2.1% 250 to 499 1.7%

500 to 999 0.7% 501 to 1,000 0.9% 500 to 999 1.4%

1,000 and over 0.9% 1,001 + 0.9% 1,000 and over 1.2%


Size Distribution of Firms (by number of employees)

Oxfordshire Silicon Valley OttawaSophia

Antipolis

1 to 10 66% 0 to 9 75% 1 to 10 45% 1 to 10 83%

11 to 50 23% 10 to 50 18% 11 to 50 38% 11 to 50 12%

51 to 99 5% 51 to 100 3% 51 to 99 9% 51 to 100 2%

100 to 249 3% 101 to 250 2% 100 to 249 5% 101 to 200 1%

250 to 500 2% 251 to 500 1% 250 to 499 1% 201 to 500 1%

500+ 1% 501+ 1% 500+ 2% 500+ 0%

Total 1095 Total 25787 Total 1043 Total 573


Largest Canadian Corporations(World-wide Revenue)

Company Rank

Revenue ($mUS)

Company

Rank

Revenue ($mUS)

George Weston

269 17,476.0 Alcan 402 12,540.0

Bombardier 329 15,115.9 Power Corp.

418 12,108.9

Royal Bank 337 14,771.7 ScotiaBank

432 11,633.1

Onex 344 14,424.1 CIBC 464 10,835.8

BCE 390 13,020.7 Nortel 470 10,701.0

Magna Int. 391 12,971.0 Manulife 479 10,526.6

Source: Fortune 500 World’s largest corporations, 2003


Largest Firms from Other Countries

(World-wide Revenue)Company Ran

kRevenue

($mUS)Company Ran

kRevenue

($mUS)

Wal-Mart (US)

1 246,525.0 Nestle (Switz.)

38 57,598.9

Shell (NE/UK) 4 179,431.0 Assicurazioni (Italy)

44 53,598.9

DaimlerChyrsler (Germany)

7 141,421.1 Samsung (Korea)

59 47,605.6

Toyota (Japan)

8 131,754.2 China National Petroleum

69 44,864.4

Total (France)

14 96,944.9 George Weston

269 17,476.0First

Canadian!Source: Fortune 500 World’s largest corporations, 2003


Californian Tech Firms(World-wide Revenue)

Company Revenue ($mUS)

Company Revenue ($mUS)

Hewlett-Packard

58,588 Science Applications Int

6,104

McKesson 50,006 Agilent 6,010

Intel 26,764 Apple Computer 5,742

Cisco Systems 18,915 Amgen 5,523

Sun Microsystems

12,496 Applied Materials 5,062

Solectron 12,276 Jacobs Engineering Group

4,555

Computer Sciences

11,426 Gateway 4,171

Oracle 9,673 Maxtor 3,779

Source: Fortune 500 World’s largest corporations, 2003


Canadian Tech Firms(World-wide Revenue ; Telecom Carriers Not included)

)

Company Revenue ($mCDN)

Company Revenue ($mCDN)

Bombardier 23,798.9 H.P Canada 1,800.0

Nortel 10,621.0 ATI Tech. 1,022.5

Celestica 8,288.8 Xerox Canada

1,518.6

General Electric Canada

3,379.3 EDS 1,427.1

Siemans Canada 3,100.0 Linamar 1,360.1

Pratt and Witney Canada

2,600.0 Honeywell Canada

1,323.0

Source: ROB Top Tech 2003


Software Firms in Ottawa(World-wide Revenue)

Source: Branham Group, 2003

Company Revenue ($,000CDN)

Company Revenue ($,000CDN)

Cognos 500,200 TrueArc 5,236

Corel 130,300 FreeBalance 5,036

Pieta Tech. 13,500 Taske Tech. 4,200

MXI 10,100 Data Kinetics 4,100

Autoskill 7,868 KOM Networks

4,081

Watchfire 6,900 Workstream 3,078

Hemera 5,681

Documents

Regional Governance in Ottawa The Commercialization Task Force, an exercise in local governance