Knowledge, Innovation and Institutions: Global and Local Dimensions of the ICT Cluster in Waterloo, Canada

Abstract

Bramwell A., Nelles J. and Wolfe D. A. Knowledge, innovation and institutions: global and local dimensions of the ICT cluster in Waterloo, Canada, Regional Studies. This paper presents research findings on the information and communication technology (ICT) cluster in Waterloo, Ontario. Cluster dynamics in Canada do not conform to some of the key assumptions in the literature on clusters that emphasize the importance of local intra-cluster dynamics based on inter-firm linkages at the local level. The results of this case study indicate that many inter-firm linkages in the Waterloo ICT cluster are non-local, and that extra-firm institutional supports, such as the local university and industry association, are critical in sustaining and strengthening the cluster. Knowledge-based cluster theories that emphasize the role of local and global knowledge flows and learning processes, and the interaction effect of civic capital and local institutions in supporting the development of a local ‘learning economy’, provide more compelling explanations for the resilience of the ICT cluster in Waterloo, Ontario.

Bramwell A., Nelles J. et Wolfe D. A. La connaissance, l'innovation, et les institutions: les dimensions mondiales et locales de la grappe TIC à Waterloo, au Canada, Regional Studies. Cet article cherche à présenter les résultats des recherches effectuées sur la grappe de technologie de l'information et de la communication (TIC) à Waterloo, dans l'Ontario. Au Canada, la dynamique de grappes ne se conforme pas à quelques-unes des suppositions clé de la documentation sur les grappes qui met l'accent sur l'importance de la dynamique locale des grappes fondée sur les rapports interentreprises d'envergure locale. Les résultats de cette étude de cas indiquent que beaucoup des rapports interentreprises de la grappe TIC à Waterloo ne sont pas locaux et que le soutien institutionnel externe, tel l'université locale et les relations industrielles, s'avère indispensable pour maintenir et consolider la grappe. Les théories de grappes fondées sur la notion de connaissance et soulignant le rôle des flux de connaissance locale et mondiale et des processus d'apprentissage, et l'impact de l'interaction du capital municipal et des institutions locales dans le but de soutenir le développement d'une ‘économie d'apprentissage’ locale, fournissent des explications indiscutables de la faculté de reprise de la grappe TIC à Waterloo, dans l'Ontario.

Dynamique de grappes Technologie de l'information et de la communication Compétitivité Economie d'apprentissage Aménagement du territoire

Bramwell A., Nelles J. und Wolfe D. A. Wissen, Innovation und Institutionen: globale und lokale Dimensionen des Clusters für Informations- und Kommunikationstechnologie in Waterloo (Kanada), Regional Studies. In diesem Beitrag werden die Ergebnisse der Forschung über den Cluster für Informations- und Kommunikationstechnologie in Waterloo (Ontario, Kanada) vorgestellt. Die Dynamik der Cluster in Kanada entspricht nicht einigen der zentralen Annahmen in der Literatur über Cluster, in denen die Bedeutung lokaler, clusterinterner Dynamiken auf der Grundlage von Verknüpfungen zwischen den Firmen auf lokaler Ebene betont wird. Die Ergebnisse dieser Fallstudie weisen darauf hin, dass viele Verknüpfungen zwischen den Firmen im Cluster für Informations- und Kommunikationstechnologie von Waterloo nicht lokaler Natur sind und dass eine institutionelle Unterstützung außerhalb der Firmen (zum Beispiel durch den lokalen Universitäts- und Industrieverband) eine wichtige Rolle beim Erhalt und der Stärkung des Clusters spielen. Wissensbasierte Clustertheorien, in denen die Rolle der lokalen und globalen Wissensströme und Lernprozesse betont wird, und der Wechselwirkungseffekt des Bürgerkapitals und der lokalen Institutionen zur Unterstützung der Entwicklung einer lokalen, Lernwirtschaft' bieten überzeugendere Erklärungen für die Beständigkeit des Clusters für Informations- und Kommunikationstechnologie in Waterloo.

Clusterdynamik Informations- und Kommunikationstechnologie Konkurrenzfähigkeit Lernwirtschaft Regionale Wirtschaftsentwicklung

Bramwell A., Nelles J. y Wolfe D. A. Conocimiento, innovación e instituciones: dimensiones globales y locales de la aglomeración de TIC en Waterloo, Canadá, Regional Studies. En este artículo presentamos los resultados sobre la aglomeración de las tecnologías de la información y la comunicación (TIC) en Waterloo, Ontario. Las dinámicas de aglomeración en Canadá no cumplen con algunos supuestos básicos en la literatura sobre aglomeraciones que recalcan la importancia de dinámicas intracumulares basados en los vínculos entre empresas a nivel local. Los resultados de este caso práctico indican que muchas vínculos entre empresas en la aglomeración de las TIC en Waterloo no son locales y que estos apoyos institucionales de otras empresas, tales como la asociación local entre la universidad y la industria, son de vital importancia para sostener y reforzar la aglomeración. Las teorías de aglomeración basadas en el conocimiento que destacan el papel del flujo de conocimiento local y global y los procesos de aprendizaje, y el efecto de interacción de la capital cívica y las instituciones locales en apoyar el desarrollo de una ‘economía de aprendizaje’ local ofrecen explicaciones más convincente para la capacidad de recuperación de la aglomeración de las TIC en Waterloo, Ontario.

Dinámicas de aglomeración Tecnología de la información y la comunicación Competitividad Economía de aprendizaje Desarrollo económico regional

Keywords:

• Cluster dynamics
• Information and communications technology
• Competitiveness
• Learning economy
• Regional economic development

Notes

1. This case study is part of a set of national case studies recently conducted by the Innovation Systems Research Network (ISRN) in Canada. For a more detailed discussion of the findings of the ISRN study on industrial clusters, see Wolfe and Gertler (2004) and Wolfe et al. (2005).

2. For a more detailed discussion of the nature of the innovation system in Ontario and an over view of the provincial ICT sector, cf. Gertler and Wolfe (2004). We have previously analysed the origins and growth of the Waterloo ICT cluster in Nelles et al. (2005).

3. There is considerable disagreement in the literature about what constitutes a university spin-off. Many accounts include firms founded by university alumni or students. One definition is ‘a commercial entity that derives a significant portion of its commercial activities from the application or use of a technology and/or know-how developed by or during a university funded research program. The new enterprise is created either (1) to license a University invention, (2) to fund research at the University in order to further develop a technology/invention that will be licensed by the company, or (3) to provide a service using University-derived expertise’ (University of Alberta Research Services Office, 2003). Some of the most notable spin-offs include Waterloo Maple Inc. (1988), Open Text (1989), Virtek Vision Corp. (1986), Dalsa (1980) and Northern Digital Inc. (1981).

4. Independent start-ups account for the smallest number of new firm formation in this period, though they include some of the region's biggest names, such as Research in Motion (RIM) (1987), Descartes Systems Group Inc. (1981), Meikle Automation (1994) and Intellitech Innovations Inc. (1989).

5. There is a clear difference between software and manufacturing firms in relation to sources of supply. Because software firms do not require supplies beyond the occasional piece of hardware, supply inputs are typically more relevant to manufacturing firms, but in either case, primary sources of supply tend to be located outside the region, mainly in the USA.

6. Whereas the largest global firms tend to establish foreign offices of their own (e.g. one firm has 15–20 local offices around the world), this is more problematic for the smaller firms. While they know they need to provide local support to non-local customers, setting up foreign offices is expensive, so they tend to rely on other, more cost-effective arrangements. One growing software firm has a local sales representative working out of his house in Santa Barbara in order to have a perceived ‘presence’ in California, but remarked that ‘Once the supply relations are established nobody has any trouble going anywhere in the world, but it's just getting that going’.

7. One interesting variation on the importance of co-location with customers is that while competing globally, and especially in the USA, is critical to the growth of indigenous firms, several people stressed the importance of maintaining company headquarters and R&D capabilities in Waterloo, ‘In my growth path I did acquire seven companies over the time I was there so I had 60 per cent of my employees outside of Canada, but what I think was useful was that the decisions were still made out of Waterloo. The head office was in Waterloo even if the employees were in Munich, or Virginia, or Austin, or San Francisco, or Chicago’.

8. On the other hand, some firms mentioned that there were drawbacks to being located in Waterloo. Some were concern that Waterloo does not have the ‘critical mass’ to attract new talent to the region, so it is difficult to attract certain types of highly specialized personnel. For example, while they said it is relatively easy to attract R&D people, it is difficult to recruit senior management, senior marketing people, senior engineers, or people with highly specialized expertise because the labour market is not yet thick enough for these types of occupations. This was a key challenge cited by many firms in the recent Tech Industry Profile of the region (Communitech Technology Association, 2005).

9. Larger firms often have R&D units that are divided into different functions: a long-term strategic R&D unit, a medium-term tactical development unit that works on commercializing product enhancements, both of which often actively liaise with R&D institutions such as the university, and a short-term problem-solving or ‘fixer’ unit.

10. Cf. Nelles et al. (2005) for a more detailed overview of the historical antecedents of the contemporary cluster.

11. Some examples of these groups are CEO, human resources, information technology, and product management councils, where many firms report sending staff to attend. Here the intention is specifically to facilitate common problem-solving and mentoring relationships, and to share management and business practices.

12. See Wolfe et al. (2005) for more detailed conclusions from other cluster studies of the Innovation Systems Research Network (ISRN) Cluster Initiative.