The five-year digital strategy of Communitech [1], based in Canada’s Waterloo Region of Ontario, is producing big results after just three years, according to a report card released last week.
[2]The Kitchener-Waterloo region was already one of Canada’s technological hubs prior to the founding of Communitech [3], with such companies as Research in Motion [4], Christie [5] and others in the region, along with a huge input from the University of Waterloo [6].
In mid-2009, Communitech set out to:
- Support the creation of 100 new digital media and mobile computing companies;
- Help generate 2,000 new jobs within startup companies;
- Help create and retain 5,000 new jobs in existing technology companies;
- Attract more than $100M in equity investments to digital media and mobile companies.
The results from 2010-2012 are striking:
- 863 new startup companies have been created since 2010, generating more than 1,600 new startup jobs;
- Close to 4,000 new jobs have been created in existing tech firms (Waterloo Region’s tech and digital media cluster has close to 1,000 companies that generate more than $30 billion in annual revenue);
- Client companies have attracted $350 million in equity investments.
We are trying to find out how many of the startups are working in any part of the digital out-of-home sector.
Recent work with Deloitte Consulting [7] has pegged the 2012 economic impact of Communitech’s digital strategy at more than $14 for every $1 of public investment (measured in terms of GDP), and the cost per job created at just $3,800. Deloitte also carried out work to quantify the collective impact of Communitech’s small and mid-sized client companies, estimating more than $900 million of economic impact, which encompasses client revenue, capital raised, new job wages and client deal flow.
Other follow-on impacts of the strategy include the longevity of startup companies in the Communitech network: 83% of startup companies in the Waterloo Region ecosystem are still in business after five years – far outstripping the industry average of 45% in other global locations.
Iain Klugman, Communitech CEO, says that the results are evidence that public and private sector investment in Communitech’s strategy is paying huge dividends.
“We set out to build a world-class commercialization centre at the Communitech Hub, and to connect that centre to a world-class network through the Canadian Digital Media Network [8],” says Klugman. “And the economic impact of those investments is really powerful for Ontario and for Canada.”
Both the Province of Ontario and the Government of Canada are key investors in Communitech’s digital strategy.
“The Communitech Hub’s start-up coaching, collaborative R&D and outreach activities are helping Ontario strengthen the economy and create jobs,” says Reza Moridi, Ontario Minister of Research and Innovation. “Communitech is a stellar performer.”
“Communitech’s efforts are connecting entrepreneurs to capital and paying dividends for Canada’s digital economy,” says the Hon. Christian Paradis, Canada’s Minister of Industry.
Academic partners include the University of Waterloo, Wilfrid Laurier University and Conestoga College. Industry partners include Google, BlackBerry, Desire2Learn, Christie Digital, OpenText, Agfa HealthCare, COM DEV and Canadian Tire, which announced last month that its new innovation team will be headquartered at the Communitech Hub.
Founded by Communitech, the Canadian Digital Media Network is an ecosystem that nurtures and grows Canadian digital media companies to advance the Canadian economy.