Waterloo region receives big financial boost to lay groundwork for digital media corridor

Ontario contributes $26.4 million

The Waterloo region is laying the groundwork to position itself as the centre for Canada's diverse digital media mobile sector with the establishment of The Communitech Hub: Digital Media and Mobile Accelerator. With majority backing by a roster of area high-tech companies, the $107-million initiative is designed to accelerate the growth of existing businesses and create new firms in a global market projected to be worth $2.2 trillion globally by 2012.

Three years in the making, the Communitech Hub is built around the region's strong capacity for digital media hardware and software development with substantial private sector and provincial funding contributing to its budget of $107 million over five years. Communitech — the Waterloo region's industry-led organization with more than 550 members — will serve as an anchor for the ambitious endeavour.

The Ontario government is the latest investor in the project, committing $26.4 million or one quarter of its five-year budget with the proviso that Communitech link the new hub to other centres throughout the province. The hub will also be part of the national Canadian Digital Media Network (CDMN), tying together areas of digital media expertise and commerce across the country (R$, February 9/09).

"The Communitech Hub will be a sand box for bringing together large and small companies for digital media mobile … It will also bring larger technology companies into the value chain," says Communitech president Iain Clugman. "The intent is three fold: support continued growth and success of larger tech companies in Ontario, support firm creation and get the attention of foreign players who might be interested in establishing a presence in the region."

targets both existing firms and start-ups

The hub will cater to established firms seeking to grow and move up the value chain while earlier stage firms will be directed to the existing Accelerator Centre which will be expanded to accommodate more companies.

Of the total pricetag, $60 million comes from industry in the form of cash, R&D funding and in-kind (equipment and software). While 40 industrial partners have committed to the project, the bulk of the private sector support comes from a handful of major corporations including Open Text Corp, Research In Motion Lt, Christie Digital Systems Canada Inc, Dalsa Corp and Agfa HealthCare. Tom Jenkins, Open Text's executive chairman and chief strategy officer is also chair of the CDMN.

"It has to be about business, more companies and successful companies. The R&D focus will be what business determines is key to the issues they're facing," says Clugman. "We've been overwhelmed by the private sector response. Early-stage start-ups are waiting to get into our existing accelerator."

The province of Ontario also provided $10 million to the affiliated Stratford Institute (a Univ of Waterloo subsidiary). The federal government awarded $5.35 million to the Stratford Institute and $5.35 million for the CDMN, a Centre of Excellence for Commercialization and Research (CECR). The latter is a joint initiative of Communitech and the Stratford Institute.

strategic priority

Digital media has been recognized by many governments and advisory bodies as a key strength in Canadian S&T. Clugman says it wasn't until three years ago that the Waterloo region realized that it possessed real momentum in several key areas of digital media and technology.

"A whole piece of the value chain was missing on the technology side. No one was paying attention to this," he says. "We have a lot of the technology and the right mix. Waterloo has a diverse technology culture with strength in digital imaging and digital media, image capture and imaging and applications that solve business problems."

The Ontario government has targeted digital media and information and communications technologies as one of four priority areas for future investment as part of its innovation strategy. The other areas are the bio-economy & clean technologies, advanced health technologies and pharmaceutical research and manufacturing. (R$, April 30/08)

The Communitech Hub and the Stratford Institute are the first of two nodes being developed under the CDMN. The Communitech Hub is expected to support at least 100 new start-ups by providing specialized technology services, business coaching, venture capital and an entrepreneur-in-residence program. The Stratford Institute will serve as a policy think tank and training centre for the sector.

Other potential nodes in the CDMN network could include Toronto (medical technologies and interactive entertainment), Vancouver (mobile devices and software) and Montreal (bio and pharma R&D and games development). The CDMN is expected to become operational in early 2010.

"We're looking for other centres or hubs that share the commitment to business driven commercialization, company creation and business-driven research," says Clugman, adding that Waterloo's efforts provide a nice fit to the federal government's pending Digital Economy strategy. "For R&D, we'll sit down with companies to discuss this. It could be R&D that's company specific or pre-competitive. What are the opportunities for start-ups and strengthening companies? We need new companies to address the key needs of the sector."

cluster building

The Waterloo region is one of the few ICT clusters that has grown in recent years and backers of the Communitech Hub want to expand the Waterloo model to other regions, propelling Canada into the top ranks of ICT clusters. Waterloo is home to more than 550 technology companies and several growing research institutes including the Perimeter Institute, the Institute for Quantum Computing and the Centre for International Governance Innovation.

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