Optical Valley set to eclipse Fat Cat City as telecommunications sector leads Ottawa's dramatic technology boom

The depth of R&D in the Ottawa region is finally capturing the attention and imagination of the global high technology community, with an unprecedented number of new initiatives and financings in recent weeks that makes the high-profile shenanigans on Parliament Hill seem like a quiet Sunday picnic. In a show of collaboration that would be unheard of even last year, regional, provincial and national forces are joining together to fuel the local technology boom, contributing capital, infrastructure and strategic foresight to an ever-growing critical mass of technology niches that place Ottawa in the national vanguard.

Of the various resident technology sectors, telecommunications is undeniably the big driver underpinning Ottawa's growing base of firms, institutes and collaborative ventures. Encompassing photonics, microelectronics and software, telecom is exploding, with more than 100 companies led by the massive R&D engine of Nortel Networks Corp.

"We're right in the sweet spot of the technologies driving the Internet. It's a unique situation," says Dr Brian Barge, president and GM of the Ottawa Economic Development Corp and former president of the Alberta Research Council. "International companies are locating here and investment is flowing into the region dramatically. R&D is driving this whole phenomenon. "

To ensure that the benefits of Ottawa technology boom are felt in virtually every sector of the economy, a number of ambitious projects have been launched, with a level of coordination that has surprised many observers and even those at the centre of the action. Last month, the creation of the National Capital Institute of Technology (NCIT) was announced, with a funding mix that illustrates the spectrum of interest in the economic blossoming of the region (see here).

Following closely on its heels is The Ottawa Partnership (TOP), a private-public initiative that represents an ambitious attempt to track, stimulate and coordinate sustainable high-tech growth in the face of increasingly stiff global competition. TOP has identified seven mainly high-tech industrial clusters it contends represent the future growth and prosperity of the region (see box), and has mapped out a plan of attack to ensure that all the relevant players are on side. For the region's government laboratories and R&D institutions, the strategy recommends positioning them as sources of commercializable technology, as well as "technology intelligence" centres to diffuse global technology into the region's clusters. The two key players are the National Research Council (CRC) and the Communications Research Centre, both of which are founding members of NCIT.

To arm the region for the volume and variety of communications that future growth will demand, the Ottawa Centre for Research and Innovation has established Smart Capital to develop integrated on-line services and test beds for applications development. The not-for-profit organization recently won one of 12 Industry Canada Smart Communities Projects (R$, May 26/00) and formed the Optical Fibre Consortium, which just inked a $1.2-million contract to create an optical fibre network linking 25 research institutions, universities and government laboratories. The so-called dark fibre build will be undertaken by Vidéotron Télécom Inc, and will be paid for through the cost savings of the participating organizations who will own and control their individual strands of fibre.

"There's a recognition at all government levels that Ottawa is a hot spot globally in telecom and photonics," says Bill St Arnaud, senior director of advanced networks for CANARIE. "And there's a recognition for what CA*net (CANARIE's advanced optical research network) has contributed. This (the Optical Fibre Initiative) is the first step towards achieving fibre to the home."

Muscling for attention amidst the flurry of announcements is Ontario Research and Innovation Optical Network (ORION), the Ontario government's contribution to high-bandwidth infrastructure. Budgeted at $57 million over five years, Ontario's SuperBuild Growth Fund is contributing just $3.5 million during the first phase, with an additional $17.2 million coming from other sources. ORION will take off where CANARIE's backbone CA*net 3 leaves off, connecting colleges, research institutes and other research facilities together to facilitate collaborative research and and network and applications trials.

VC flooding region

There are any number of indicators that can be cited to demonstrate the acceleration of activity in telecommunications, photonics, life sciences and software development. Ottawa boasts the most highly educated populous in the country, a high-tech workforce of 65,000 with an annual growth rate of 15%, the nation's highest level of overall R&D and 90% of all telecom R&D.

Perhaps the most dramatic indication of Ottawa's status as an emerging high-tech centre is the increase in the amount of capital flowing into the region. In the first 5 months of this year, area firms have received $470 million in risk capital, up more than 70% from the amount invested in all of 1999, and an astounding 535% jump from the venture capital that entered the region in 1998.

The influx of major international firms has also lent credence to claims that Ottawa is now one of the top 12 global technology "hot spots". In recent weeks, Finnish giant Nokia Corp unveiled plans to establish an Ottawa area facility, closely followed by Marconi PLC, which announced a $250-million expansion of its area presence with a new high-tech centre. Other firms intending to boost their Ottawa operations include Siemens AG, Cicso Systems Inc, Lucent Technologies Inc and Alcatel, which purchased Newbridge Networks Corp and plans to use it as the core of its networking division and hire another 650 staff. Eclipsing all other firms once again is Nortel, which is on track to bulk up its Ottawa workforce to more than 14,000 this year, with the vast majority of operations focused on R&D.

Photonics cluster first out of the gate

The need to unify and lever the diversity and accelerating level of activity within Ottawa's technology sectors is what led to the creation of the TOP initiative, a $400,000 study conducted by Ted Lyman , senior VP of ICF Consulting's economic strategy group. TOP is co-chaired by Bob Chiarelli, chair of the Region of Ottawa-Carleton and Rod Bryden, president of SC Stormont Corp and president/CEO of Worldheart Corp. TOP's report - Choosing a Future: A New Economic Vision for Ottawa - is due for release this summer.

Following TOP's recent kick-off, the photonics cluster group held its first public meeting, outlining its strategy for making Ottawa a global photonics centre. Funded to the tune of $7.5 million in provincial, institutional and private sector dollars, the Ottawa Photonics Cluster (OPC) was actually formed independent of TOP but was folded in early this year along with another photonics group, the Imaging Technologies Organization. OPC has created six initiatives focused on human resources, marketing, events, outreach, membership/funding and a technology roadmap.

"There's a lot of company formation going on in the region right now," says OPC chair Ray Novakowsky. "Photonics is quite pervasive in every sector as is allows things to be done faster, better and cheaper."

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