A Little About Entrepreneurial Clusters
Sponsoring entrepreneurial investment is a growing priority throughout Canada. With many prestigious universities producing healthy classes of creative and motivated students every year, capitalizing on this infusion of entrepreneurial energy is critical to the country’s continued economic development.

Most successful startups are born from a single idea. Young professionals and students are continuously pushed to identify needs in their respective fields and this is leading to a number of unique prototypes that are designed to provide solutions for these critical areas of need.

Identifying a need and developing a solution that meets that need are the first steps in the entrepreneurial process. A million dollar idea will remain just that without partners, skilled employees, important industry contacts, and ample capital to build a steady business around it. Building a successful business around a unique idea requires the right mix of entrepreneurial motivation, knowledge, mentoring, and access to funding.

Entrepreneurial ‘Hotspots’

In the real world, there are only a few hotspots where these essentials are closely concentrated, and while entrepreneurial activity has been increasing in many Canadian cities, there’s still a need to foster innovative ecosystems throughout the country. In an effort to respond to this need, a recent conference based in Waterloo Region focused on whether or not Canadians can build their own entrepreneurial clusters.

The University of Waterloo has pushed entrepreneurial development in a region that’s now home to more than 1,000 tech companies, leading-edge science, think-tanks, and renovated co-working spaces that give ambitious entrepreneurs and motivated students places to meet and mingle with industry veterans.

Despite the university’s commitment to industry placements and giving researchers ownership of their discoveries, the region still struggles to offer credible sources of venture capital. These funding sources are vital if researchers and entrepreneurs wish to bring creative discoveries and innovative solutions to market. Fostering entrepreneurial clusters, however, has the chance to change this.

Cluster Creation

According to Steve Blank, the Silicon Valley entrepreneur best known for founding the Lean Startup model, “An entrepreneurial cluster requires both serendipity and deliberate engineering. Entrepreneurial clusters require a culture of risk-taking, and that requires risk capital. Not just angel investors, but capital that can scale. And that occurs in just a few places in the world.”

Fortunately, the culture amongst venture capitalists is shifting. Scalable funding has typically been concentrated in a handful of cities worldwide, but more venture capitalists today are willing to travel and meet with new clients all over the globe, rather than requiring a move to a capital-rich city.

With a number of diverse and expanding cities, Canada has unique opportunities to build on its’ existing strengths. For example, Halifax might seek to build clusters around telecommunications, transportation, and oceans while Montreal would focus on fashion, media, and design. If Toronto’s clusters centered on finance, media, and healthcare, Alberta’s might prioritize resources and production technology, and Vancouver’s clusters may be built around telecommunications, gaming, and the city’s ‘Pacific’ culture.

According to Blank, however, “Entrepreneurship without financing is like one hand clapping.” The greatest challenge, for these cities, he says, is fostering financial support for local startups. Blank believes his Lean Startup approach provides a useful model for Canada’s largest cities to create more innovative ecosystems.

The Role of Clusters in Collaboration

Expanding digital networks foster greater collaboration than ever before, and every new application, technology, or social media site creates opportunities for add-ons, accessories, and further innovation. As such, there is little competition between entrepreneurial clusters. With careful collaboration, the success of one cluster can foster the success of many others.

Iain Klugman is the CEO of Waterloo innovation centre Communitech, the organization partnering with the University of Waterloo to focus this year’s Innovation Summit on identifying the ingredients necessary to build entrepreneurial ecosystems by inviting community builders from across Canada, the U.S. and Europe.

Klugman believes the creation of community clusters is vital to creating healthy regional environments in which the entrepreneurial spirit can thrive. “A country shouldn’t have just one cluster,” Klugman says. “It should have 16 or 20. Then it’s legitimate. Then it has critical mass. But you have to build it one community at a time.”

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Posted by: DSR
Thursday, October 1, 2015
Tag: Business Start Ups
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