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The Current State of Canadian and Ottawa Business Incubators

February 22, 2009 by Brian Hurley 0 Comments

Business incubation has been identified as a means of meeting a variety of economic and socioeconomic policy needs, which may include:

  • Creating jobs and wealth
  • Fostering a community’s entrepreneurial climate
  • Technology commercialization
  • Diversifying local economies
  • Building or accelerating growth of local industry clusters
  • Business creation and retention
  • Encouraging women or minority entrepreneurship
  • Identifying potential spin-in or spin-out business opportunities
  • Community revitalization

Business incubators typically provide a range of services to clients that may include:

  • Help with business basics
  • Networking activities
  • Marketing assistance
  • High-speed Internet access
  • Help with accounting/financial management
  • Access to bank loans, loan funds and guarantee programs
  • Help with presentation skills
  • Links to higher education resources
  • Links to strategic partners
  • Access to angel investors or venture capital
  • Comprehensive business training programs
  • Advisory boards and mentors
  • Management team identification
  • Help with business etiquette
  • Technology commercialization assistance
  • Help with regulatory compliance
  • Intellectual property management
  • Facilities (e.g. office space, specialized lab space) and associated business services (e.g. security, receptionist, meeting rooms, phone service, photocopiers, printers,  internet service)

Stats Canada released a report in late 2008 “The Business of Nurturing Businesses” which takes a look at business incubators in Canada based on survey data taken in 2005.   Some key findings from the report include:

  • Almost all business incubators are sponsored by economic development organizations, governments, academic institutions, i.e. tax money
  • 1 in 6 incubators offer facilities and on-site support services
  • Almost half of all incubators were focused on professional, scientific and technical services businesses
  • The top three most used services of incubators were: legal consultation, management guidance and assistence in obtaining financing

There are various lists of incubators in Canada, unfortunately none up-to-date, including:

In Ottawa, we have the following business incubators:

Unfortunately, with the exception of Carleton University’s Tony Bailetti, there is little/no information available on the public incubators relative to return on investment of the tax money in the operation of the incubators – which would lead me to believe that compelling results do not exist.

From the perspective of efficiency, it appears that our tax money is being spent a bit recklessly relative to overlapping mandates and services.    The Ontario government and Ottawa Municipal government have both being doing a review of how they are funding and delivering their economic development programs.   I hope that as part of this review, they look towards stronger collaboration and reduced overlap of services between Provincial and Municipal programs.

A future blog entry will examine how business incubators role will evolve/change in the context of Business Ecosystems.

References:

Best practices, Business, business incubators, Canada, Canadian Politics, Clusters, Commercialization, Creative Class, Economy, Ecosystems, Entreprenuerism, General Interest, Government Policy, Information Technology, Innovation, Innovation Hub, Jobs, Microbusiness, OCRI, Ontario, Opportunities, Ottawa, Regional Economic Development, Sales, Social Programs, Stats Canada, Talent First Network, The Code Factory, Trends, Unemployment, Venture Capital, Web 2.0
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Emerging New Channels to Market for “Creative Class” Microbusinesses

February 18, 2009 by Brian Hurley 2 Comments

For a start-up, one of the biggest challenge is gaining access to customers and being able to transact business with them as easily and quickly as possible.  In the last 5 years,  new business models have been emerging that help reduce that challenge, referred to as Ecosystem business models.

These new business models are providing knowledge workers (aka the “Creative Class“) access to ready-made delivery platforms and selling channels to a well-defined market.

These emerging channels to market typically provide a means to connect suppliers with consumers, usually handling the transaction between the two as a trusted mediator (taking a percentage in return for the channel services, e.g. selling platform, marketing, customer management, fulfillment, transaction handling):

  • Apple Apps Store – sells applications to Apple iPhone phone users, handles delivery and payment, payment is via iTunes account
  • Google Android Market - sells applications to Android mobile phone users, handles  delivery and payment using Paypal
  • Amazon Webstore - sell your wares online, access Amazon shoppers and Amazon store tools, handles payment using Amazon account
  • 99Designs -  companies/individuals post requests for graphics designs and designated “prize money”, companies/individuals post responses, the winning design selected gets the “prize money”
  • oDesk - teams or individuals post skills/availability, companies/individuals post jobs with desired fee for completion (fixed rate or hourly)
  • Shutterstock – royalty-free photographs, individuals/companies provide photos and get paid based on sales
  • Innovation Exchange – companies/individuals post challenges and cash, suppliers post responses
  • Mechanical Turk – people post questions/tasks, suppliers post answers/accept task
  • Cafepress – individuals/companies generate graphic content, Cafepress puts it on mugs, shirts, etc and handles all fulfillment for the supplier
  • Amazon Kindle – sell eBooks via Amazon and their new eBook reader
  • uTest – on-demand software testing
  • Crowd Spring – similar to 99Designs
  • Lulu - sells self-published books
  • Beta Test – links beta-testers with software publishers (e.g. iPhone)
  • Eclipse Foundation - links Eclipse IDE consumers with suppliers who build on top of the Eclipse open source IDE platform
  • Just Parts - links consumers of auto parts with suppliers
  • Top Coder – links software designers with companies who respond to contest proposals
  • Article One Partners - offers rewards for finding prior art against posted patents
  • Spot Us - allows journalists to post story ideas and solicit funding from public

One channel which can be very significant for Microbusinesses is Paypal -

  • Paypal – “one-click” purchasing between suppliers and consumers.  Many niche sellers, e.g. 3rd party add-on suppliers for Joomla! use Paypal as their transaction vehicle.  Most eCommerce solutions provide a gateway to Paypal as the payment means.  Paypal itself also can accept credit cards on behalf of a seller.  Paypal by itself provides access to a group of consumers who are comfortable transacting business online.  Paypal provides a trusted supplier relationship between the buyer and the supplier.  I have to confess I never thought Paypal would amount to anything when I first heard about the business many years ago…
Best practices, Business, Clusters, Commercialization, Computing, Creative Class, Economy, Ecosystems, Entreprenuerism, General Interest, Information Technology, Innovation, Innovation Hub, Jobs, Marketing, Microbusiness, Opportunities, Regional Economic Development, Sales, Silicon Valley, Trends, Unemployment, Venture Capital, Web 2.0
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How Vulnerable is the Ontario Economy?

February 14, 2009 by Brian Hurley 2 Comments

To understand how vulnerable the Ontario economy is to the current conditions of the US and Canada economy, it is useful to look at where the strength of the economy has traditionally been.

Structure of the Ontario Economy, 2007 Per Cent share of GDP

Some published reports that give some insights into the potential impacts on the Ontario economy and consequences include:

 

It is interesting to note that Quebec and Ontario account for over 85% of ICT manufacturing in Canada (based on 2002 numbers from Stats Canada).

Click to enlarge

Click to enlarge

Some good sources of reference materials to dig deeper and form your own opinions are available at:

News articles reflecting important changes to the Ontario economy:

Business, Canada, Canadian Politics, Commercialization, Entreprenuerism, General Interest, Government Policy, Ontario, Ottawa, Regional Economic Development, Social Programs, Trends, Unemployment
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Small Business Has a BIG Impact on the Canadian Economy

February 13, 2009 by Brian Hurley 0 Comments

Many people are not aware of the big impact that small business has on the Canadian economy.   Unfortunately, the focus of the news and government is usually on the few large companies – automotive and financial of late.

The Government of Canada publishes a ton of data on small businesses.   Some key metrics from 2007 about small business in Canada include:

  • There are over 1 million small businesses in Canada
  • Small businesses that have fewer than 50 employees -  contribute 26 percent to Canada’s GDP
  • Small businesses employed approximately 5 million individuals – 48 percent of the total labor force in the private sector
  • Small businesses created 100,000 jobs  – accounting for over 40 percent of all jobs created in Canada

Good sources for information on small businesses in Canada, their characteristics and impact on Canada’s economy include the following:

Business, Canada, Canadian Politics, Commercialization, Economy, Ecosystems, Entreprenuerism, General Interest, Innovation Hub, Jobs, Microbusiness, Ontario, Opportunities, Ottawa, Regional Economic Development, Sales
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Lead to Win Ecosystem Announced

February 13, 2009 by Brian Hurley 3 Comments

On Feb 12th, during a presentation at MaRS in Toronto, Tony Bailetti announced the launch of the Lead to Win Ecosystem.

ltw-ecosystem

The Lead to Win ecosystem will be headquartered in Ottawa,  it is focused on:

  • Facilitating the formation of multi-location, international teams
  • Equipping teams to exploit the new creativity economy
  • Supporting teams’ rapid start-up, operations and execution
  • Linking teams to opportunities and channels

The Lead to Win ecosystem is based on the 2002 Lead to Win program which was extraordinarily successful in delivering meaningful and measurable economic development results to the Ottawa region.

If you are interested in more information on the Lead to Win ecosystem or want to be a part of it – drop a note to Tony Bailetti, and read the material on Business Ecosystems on this site.

Best practices, Business, Canada, Clusters, Commercialization, Creative Class, Economy, Ecosystems, Entreprenuerism, General Interest, Information Technology, Innovation Hub, Jobs, Marketing, Microbusiness, Ontario, Opportunities, Ottawa, Regional Economic Development, Talent First Network, Trends
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Is The Recession The Best Thing to Happen To Canada?

February 10, 2009 by Brian Hurley 2 Comments

There are two interesting new ideas that I find very promising, and if the City of Ottawa is able to capitalize on them, it may create a major new source of growth for our local economy.

Richard Florida is a professor at the Rotman School of Management in Toronto.  His primary area of research is that of the “Creative Class”.   Dr Florida argues that the economy is shifting away from routine-oriented jobs to creativity-based occupations.    He also argues that the ability of an economy to adapt and weather disruptions are greater for a creativity-based economy compared to routine-jobs based economy.   Dr Florida recently delivered a report to the Ontario government on this topic - it is interesting reading.

In Ottawa, we have Tony Bailetti, a professor at Carleton University.  His primary area of research is that of  “Ecosystems”.   He argues that the business models of the world are changing.   During the Industrial Age – companies were vertically integrated.  During the Technology Age – companies were horizontally integrated with outsourced partners.  In the emerging Ecosystem Age – Dr Bailetti argues that it is all about creative knowledge workers and collaboration.    An ecosystem is not a single company, but rather is a collaborative community formed around a central keystone organization that facilitates collaborative relationships and access to wide established markets.  And this is more then just a theory – Ecosystems exist today and their numbers are growing.   A leader in this emerging Ecosystem business model is headquartered in our city! The Eclipse Foundation is a very successful keystone organization — they are at the heart of the worlds most successful Integrated Development Environment platform.

Ecosystems are a means of organizing and enabling knowledge workers, leveling the playing field against established Technology Age and Industrial Age competition, and flattening the world relative to allowing world-wide virtual teams to come together to create innovation, wealth and economic growth.  Ecosystems effectively give a practical framework around how we can capitalize on the power of the “Creative Class”.

Dr Florida and Dr Bailetti’s work have evolved independently but are very complimentary and timely.

I would love to see Tony and Richard get together as  their ground-breaking ideas represent a strong opportunity for Ottawa, Ontario and Canada to re-invent itself.

If you are one of those people who is planning  to create their own microbusiness and you are looking for ideas to pursue – you would be wise to learn more about what Ecosystems are and how you can capitalize on them.   The good news is that Tony is planning to make an important announcement on Thursday about a new initiative related to Ecosystems that you will want to know about – because it can help you - I’ll post an update to this post on Friday.

Best practices, Business, Canada, Commercialization, Creative Class, Economy, Ecosystems, Entreprenuerism, General Interest, Information Technology, Innovation Hub, Jobs, Manufacturing, Marketing, Microbusiness, Nortel, OCRI, Ontario, Open Source, Opportunities, Ottawa, Regional Economic Development, Sales, Silicon Valley, Trends
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Ottawa Already Has an Innovation Hub – It’s Name is Tony Bailetti

February 9, 2009 by Brian Hurley 2 Comments

It was great to see the article from Peter Kovessy of the Ottawa Business Journal today entitled “Innovation Hub in Stagnation”.  We need more public oversight, debate and analysis on how our local political leaders have and  are proposing to spend our tax dollars to spur innovation and economic growth for our region.

Relative to the Innovation Hub idea – there have been very negative public comments made about the plan  from Ottawa tech leaders and entrepreneurs right from the beginning. The father of local high tech, Denzil Doyle, was straight to the point:

It is discouraging to see the idea of an Innovation Hub being run up the flagpole. On a scale of one to ten, I would rate it at minus five as something that is going to solve the region’s high tech problems. About 20 years ago, we were told that if we invested in a life sciences technology park, we would grow a life sciences industry that would rival the telecom industry. We all know how that turned out. We seem to forget that Mitel started in the basement of an office building in Kanata and that a combination of its working capital and outside investment financed its real estate requirements thereafter. DY-4 started in a very ordinary building on Laperriere Ave – and so on.

Entrepreneur John Oligvie called it out:

I have spent a lot of time in Silicon Valley and in Boston and these two global high-tech centers have managed so far without building “innovation hubs”. This is discredited, “big government” thinking. Technical and business innovation can only be done by entrepreneurs, not by government. If you asked local VCs and tech entrepreneurs what they needed most in order to succeed, I doubt that anyone’s first answer would be “a big shiny new building”.

From my perspective, I have yet to talk to a local entrepreneur who is supportive of the Innovation Hub.  When it comes to high tech and innovation driven economic development – most do not feel the City of Ottawa is coupled into reality.

I personally believe we need to have less of our tax money being spent on “overheads” such as buildings and associated staff and instead direct the tax money to programs that directly support the needs of regional entrepreneurs and the important local economic development they produce.

People like Tony Bailetti and the Talent First Network are on the right track -

“To innovate effectively, small and cheap is big; big and expensive simply doesn’t work” says Bailetti. He adds: “What we need to drive massive innovation in Ottawa is many small innovation hubs like TheCodefactory, all linked to early buyers worldwide. Mechanisms that enable our innovators working anywhere in Ottawa to collaborate with early buyers at the start of the innovation cycle can produce significant benefits for our community.”

Tony Bailetti is one of the few people around that truly understands what it takes to foster innovation and deliver regional economic development.   His actions and results as one man have exceeded the results of any local organization or initiative when it comes to developing entrepreneurial activity and results for our region.  He is motivated by the desire to “Do the right thing” and “To make a difference” for his community and his students.   Tony is one of Ottawa’s (if not Canada’s) most valuable resources when it comes to economic development and technology innovation.

As an example – in 2002, Tony Bailetti ran an entrepreneurial training course called “Lead to Win”.   The course was free to the participants.  Of the 29 participants – over 50% launched a company in the Ottawa region.  The resulting entrepreneurial activity, innovation and  companies – launched by that one initiative, by that one man – resulted in the creation of over 300 local jobs and the influx of over $90M into our local economy.

That is exactly the type of  community-based leadership and grass-roots economic development activity our governments should be encouraging, learning from and backing.

Ottawa already has an Innovation Hub and its name is Tony Bailetti.

Best practices, Business, Canada, Canadian Politics, Clusters, Commercialization, Economy, Ecosystems, Entreprenuerism, General Interest, Information Technology, Innovation Hub, Jobs, Microbusiness, Nortel, OCRI, Ontario, Opportunities, Ottawa, Regional Economic Development, Silicon Valley, Talent First Network, The Code Factory, Trends
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eCommerce Solutions for Microbusinesses

February 5, 2009 by Brian Hurley 1 Comment

I’ve talked to several people recently who have been wrestling with eCommerce.  In one case the company was wanting to sell downloadable products online but not sure whether to build, contract or host.   Another had deployed an open source based solution and had engaged an off-shore contractor company for installation and ongoing support – they were wrestling with the challenge of growth and software maintenance support costs.

Today,  there is little reason anyone should be funding custom-coding or software maintenance for eCommerce solutions.   The only effort should be focused on eCommerce storefront  product catalog, related content, community – and fullfillment!   In this regard, there are some very high quality hosted eCommerce Merchant solutions available, of which I suggest people evaluate when looking to deploy an eCommerce solution for their microbusiness:

Best practices, Business, Commercialization, Customer Support, Economy, Entreprenuerism, General Interest, Information Technology, Jobs, Marketing, Microbusiness, Open Source, Opportunities, Sales, Trends
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