By Dan Miner, originally published in Buffalo Business First on 7/29/15.
Innovation tour: Kitchener-Waterloo a surging hub of high-tech startup companies.
It’s hard to find a place to start when describing the startup scene in the Kitchener-Waterloo region – but perhaps the best place is the University of Waterloo.
That college is one of the foremost engineering entities in the world and spawned a variety of high-tech companies over the years, including Blackberry Limited (formerly Research in Motion) and D2L Corp.
But the university’s prominence and the corporations its students have created might have been isolated success stories. Instead, major institutional players from higher education, government and industry decided to take the region’s technological and intellectual assets and use them to build an inclusive community, said Chris Plunkett, director of external relations at Communitech.
The result: About 1,900 new startups in the past six years which have attracted about $650 million in investment and made the region an international symbol of entrepreneurship.
All that, just a two hour drive from Buffalo.
“People here believe they can create a world-beating company,” Plunkett said
The region’s growth is especially impressive because it survived the near-collapse of Blackberry, a onetime leader in smartphones which once had nearly 20,000 employees throughout the world but is down to around 6,000, according to the company’s most recent annual statement. That includes thousands of job cuts in Waterloo, but by the time Blackberry starting trending downward, the region’s momentum was too strong to stop.
The heart of the scene is an old industrial building in downtown Kitchener which became Communitech’s headquarters in 2010, after a roughly $100 million renovation funded by government and private money. The Communitech Hub now encompasses more than 50,000- square feet, offering everything from easy-access co-working memberships and leasable offices to high-pedigree incubator and accelerator programs (Buffalo-based law firm Phillips Lytle LLP has had an office there since 2011). The facility includes enterprise space where some of the world’s most recognizable corporate names, such as Canon Inc. and Canadian Tire, employ R&D teams to work on new products. Google opened a major engineering office on the building’s second floor, and its operation has grown so much that Google is now building its own building nearby. D2L Corp.’s headquarters are also in the building.
It’s an impressive convergence that’s been widely recognized by the popular media. A recent story by The Globe and Mail was titled, “Startup city: The high-tech fever reshaping KitchenerWaterloo and all taking place near a $790 million transportation project that includes light rail through Kitchener and Waterloo – with a federal proposal to connect the system to Toronto’s light rail system.
But Plunkett said challenges do exist for the region’s startup scene as it looks toward the next stage in that evolution. In particular, Communitech is looking to move some of the energy from its facility into the rest of downtown Kitchener, where there are several recent condo projects but which hasn’t yet seen the dramatic impact one would expect from an internationally prominent entrepreneurial scene.
As its companies have grown in prominence and gained funding, Communitech has also found itself competing to keep its companies from moving to venture capital meccas such as Silicon Valley. It recently repositioned an accelerator program, now called Communitech Rev, to serve more mature funded companies.
“It’s exciting” Plunkett said of the atmosphere in Kitchener. “But there’s quite a lot more that we can do.”