Innovation Hubs

Building local businesses

NRU
Oct. 8, 2014

A common issue heard throughout the provincial and municipal elections is the need for more job creation in the GTHA. While politicians have been pitching new ideas on how to spur job creation, local innovation hubs have been working within their communities to develop local jobs.

The Ontario Network of Entrepreneurs comprises a group of regional innovation centres that work to become catalysts for local innovation. These include Hamilton’s Innovation Factory, Durham Region’s Spark Centre and Mississauga’s RIC Centre. The centres offer support to start-up companies to help develop and grow new businesses.

“Given the change in the creative economy around how businesses can now start in a home or very small locations, centers like Spark Centre really help those companies with expertise and access to resources,” Spark Centre executive director Dennis Croft told NRU. “It really helps those companies accelerate their businesses.”

Spark Centre is the innovation centre for Durham Region and Northumberland County and deals with around 150 companies at any given time. These companies have been in operation for less than five years and have less than $1-million in annual revenue.

Its headquarters are in downtown Oshawa, which is currently undergoing revitalization. Croft said these centres can create jobs in local areas, as well as create the need for local jobs in supporting industries.

“For every job created in one of these companies, it usually creates one or two jobs in the local economy to support that same company,” said Croft . “It has some collateral benefits.”

The most common example of where innovation centres have really helped a local economy is in Kitchener-Waterloo. Croft said while people used to live in the area and commute to work elsewhere, with the creation of new industries there has been a reversal with people commuting to Kitchener-Waterloo.

While the typical image of a start-up is that it is a webbased company, Innovation Factory executive director David Carter told NRU in Hamilton there are a number of start-ups focusing on the health services industry.

“That’s a real sweet spot for Hamilton when you look at how many health institutions surround and fill in the city,” said Carter. “I think that’s really where we’ll be different from other places.”

The Innovation Factory’s scope also extends past start-ups and looks at ways to bring innovation into existing companies.

“We meet with different companies and assess what they could be doing to grow,” said Carter. For existing businesses in Hamilton, this is oft en related to succession plans.

For business owners nearing retirement, the question of “how do I keep my business going after I retire?” becomes increasingly important. Carter said many founders of older manufacturing companies in Hamilton see liquidation as one of their only options. Innovation Factory has offered interventions to some companies to prevent liquidations from happening.

“It’s most important in Hamilton because of the age of these companies,” said Carter. “There are so many companies that were built around one industry and they have to make some hard choices.”

One of the ways innovation centres can help is to look at how companies can modernize operations. This could involve looking at innovative new ways to start tracking assets, for example. Carter said this works to save some jobs that already exist.

These centres can also help new start-ups network with existing companies that are looking for new innovative ideas. These entrepreneurial projects might just have the solution to an older company’s problems.

As their industry shift s some of the older companies may find themselves in need of new spaces. If, in the past, they had incrementally grown the business, it might be overwhelming to begin the process of creating a new space from scratch said Carter. Under these circumstances parents may encourage their children to look for new employment opportunities rather than taking over the family business.

“Economically, it’s a lot easier to sustain something than it is to build it from the ground up, and it’s a lot easier to grow something that has momentum,” said Carter.

One of the other areas that innovation groups can tap into to harness momentum is by working with post-secondary students.

Spark Centre, for example, runs an annual competition called Ignite for local entrepreneurs. It has three categories: one for the general public, one for youth between 18 and 29 years old and one for post-secondary students. The entrepreneurs have to go through a pitch process. Even if they don’t win the competition, Croft said they learn how to pitch their idea to investors and the public and are supported through the competition by Spark Centre.

Innovation Factory is also using the creative energy of postsecondary students. Through a partnership with McMaster University it has created an accelerator space, called The Forge, to house 10 companies. The Forge expects to start collecting applications next month. Carter said this arrangement allows new innovators to learn from each other while also creating competition among the innovators.

Croft said many students or new graduates they see coming to Spark Centre formulated business ideas while in school, either through coursework or as a side-project.

“When they come and see us, we can help them assess if it’s a valid business opportunity for them,” said Croft . “It gives them an alternative to selecting a standard, traditional career avenue that they may otherwise choose.”