For the recording of the second half of the second season of the Make the Future podcast, Jacques Beauvais, Dean of the Faculty of Engineering at the University of Ottawa, interviewed key players from the Kanata North Technology Park. He met with tech veteran, Leo Lax, Executive Director at L-Spark, and Amy MacLeod, Vice President, Corporate Affairs & External Communications at Seaspan ULC, to talk about the technology park’s fascinating history. Jacques Beauvais also discussed the park’s evolution with Jamie Petten, President and Director of the Kanata North Business Association and President of the uOttawa Kanata Alumni Council.
1970s: Kanata North’s Foundation
The technology centre started with Terry Matthews and Michael Cowpland leaving Bell Northern Research (BNR). In 1972, they started a small company at the time called Mitel, and the Mitel group started to become really successful in 1978. It went public and part of that success created a capability to build what is now called Kanata North.
To build such a cluster, you basically need three major anchor tenants.
- You need an anchor tenant in a technology field, and in Kanata North it was BNR and the government research facilities which is now called the Communications Research Centre Canada (CRC). You need smart people, including students, and the universities in the area were supplying them.
- You need a market that is interested in buying your products.
- You need a financial capacity to build these companies which was available at that time because technology was super-hot. Everything was technology, and there was a lot of money flowing into building that community.
William Teron, known as the “Father of Kanata,” was a developer and a city builder. He created an environment, which he called a village, built on the assumption that, in order to live well, you need a strong balance between your workspace, living space and the world. He built Kanata using a lot of green space ideas, which made people want to work and live there. That created the initial impetus for building what is today Kanata North.
1980s to 1990s: Budding Entrepreneurship
It is a unique environment for the way technology evolves. One of the challenges with technology companies is that the successful ones grow much faster than the people who are running them. For example, in its fourth year, Newbridge Networks was selling products at approximately $100,000 to $500,000 per customer. In the sixth or seventh year, that same company was selling products in the $1,000,000 to $2,000,000 range per customer and, a year later, it was selling in the $20 to $30 million range per customer.
The same salesperson is still working for them. He has been very successful and is now talking to the people who are buying $1 million and $10 million products. That type of skill set does not grow that quickly, which is why the affiliate program was originally created at Newbridge Networks. Companies brought in senior execs who knew how to sell those larger capabilities by building an advisory group around Newbridge.
Who were those senior execs who were opening the doors, and addressing the relevant needs of the larger players? And who were the leading-edge technology buyers who required not only what was normally being sold by everybody else, but also the leading edge? The combination was a successful way of growing and addressing the market.
From a business point of view, the Kanata North Technology Park was able to allow the footprint of these very large companies that were global in nature to leverage and be leveraged by enthusiastic and energetic entrepreneurs. They were risk-takers and willing to go the extra mile, jump over bridges and tall buildings in one step to make something happen.
The footprint of the largest companies allowed the creation of an interesting market segment. That was the foundation of what companies in the park do now; every incubator today has that idea of leveraging early-stage companies that are connected to global footprint companies. It is part of their growth.
Two Secret Ingredients: Collaboration and Community Spirit
First off, the Kanata North Technology Park has great multinational anchors. What has changed over the years is this incredible start-up community that has grown in and around it and is driving the next generation of technology development. Some of the key aspects of a successful technology ecosystem are the large core anchor tenants that are multinational in nature, the feeder systems and the incubators that grow around it, including L-SPARK. They are driving the next generation in technology because technology changes quickly. It is important to maintain the pace and rhythm of that ecosystem. It keeps organizations and communities like this one completely relevant.
The balance between large multinationals, growing start-ups and brand-new fresh incubator ideas coming out of places like L-SPARK is what makes it so special. Large corporate companies that are global in nature address markets all around the world and early-stage companies are building leading-edge technology. When they connect and collaborate, they can leverage themselves into a global environment.
Two Key Aspects: Talent and Academia
What drives Kanata North’s success is not the technology, it is the talent that builds the technology. Globally, successful technology hubs always have a core academic portion. For many successful technology parks, their first start-ups were coming out of the university, and it was located next door. For Stanford it was like that. Its technology park was built on Stanford’s land for people who wanted to become entrepreneurs. In Kanata North, the core people who started building it over the years were from the industry.
The talent present in the park is spread across multiple generations with varying skill sets. The R&D aspect of the park tends to be the focus. There is also strong engineering talent in Kanata North and other strategic contributors from the marketing, operations and finance fields whom all ensure that the companies themselves are holistically run and contribute from a global perspective. Today, the hunt for talent is real. Whoever wins it will win the next round in that virtuous cycle. Where does the talent go? Because where talent goes, innovation follows.
2000s to 2010s – The Nuclear Winter: After Nortel
In 2000, Newbridge Networks was acquired by Alcatel and then merged with it. Ericsson joined the party not too long after. Nortel collapsed. Ericsson, Ciena, Ribbon and Kapsch purchased a portion of Nortel. They are all companies that are new to the area, but the people working for them have been working in the area for the past 10 to 20 years. These companies brought in new global perspectives. They brought in people from their communities.
The Kanata North Technology Park was able to emerge from that nuclear winter while the people who lived there were still residents of the area. A large majority stayed in Kanata North with their families. It is where their children grew up and they continued to want to live and work there. They joined some of the existing companies or they became entrepreneurs. That is part of the engine that continues to help it grow.
From a technology point of view, the world was transforming, and the traditional hardware-oriented environment was transforming everywhere in the world. The companies that were emerging were now software-driven and were able to transform their world from what they traditionally did in the past into something else. Those that did not no longer exist today.
When the market contracted, it became a hunting ground for multinationals looking for good value, high talent, good products and market share. The Kanata North Technology Park became an attractive community from an investment perspective. Many people who were working in the park were worried that they were being hollowed out in some terrible way and that they were going to lose something.
“If I look back now with 20 years’ experience, it might have been the best thing that ever happened to
Kanata North, because that influx of investment kept things going through that period when it was really challenging,” says Amy MacLeod.
Some workers left the multinationals to go work for start-ups. People who were in the multinationals thought that perhaps it was not for them and they took their equity that was built in the good days into the start-ups. They didn’t leave town per se – they fed the next generation. In hindsight, the nuclear winter has been a good thing for the Park. It made it mature in an interesting way and kept the people in the region.
Benefits for Entrepreneurs of Evolving in the Park
It is much easier for early stage entrepreneurs to become market leaders coming from Kanata North’s environment because of its rich history, knowledgeable individuals and market reach. There are very few places where there are 25 global companies within five kilometres of each other. The Kanata North Technology Park is not artificial intelligence (AI) centric. The Ottawa region is an application environment, not an AI environment. It uses AI in order to get better products to the market and deliver better value to customers, whether they are software-oriented products, hardware-oriented products or a combination of the two. They are not building AI companies. They are building companies that use AI to make the world better.
Innovation: Bold and Daring Risk Takers
For one thing, innovation is changing things; it is creating something that was not there before. It is taking risks that are not part of the day-to-day environment of a large corporation’s interests. It is an irritant, yet there is a need for the creation of a soft-landing process for the community that is all about innovation.
“The universities of the region are the first step in that protective environment to say go for it, anything goes, you can go and try to build whatever you like because you are safe here, and you can do it,” says Leo Lax.
Risk takers from the academic world need an environment where they can work safely to deliver innovation. There is a need to create an intermediate protected environment that allows innovative ideas to come to fruition so that they can grow and mature and become commercial opportunities.
The Evolution of the Park - Present Day
The magnitude of the work taking place in the Park has grown exponentially and the community has grown along with it. The Kanata North Technology Park is Canada’s largest technology park and today it holds over 540 companies and 24,000 employees. There are over 19,000 technology sector employees within the region who work in the footprint of Kanata North, plus an additional 10,000 who are contributing within its halo.
Telecommunications shaped its history, which now has evolved into next-generation networks. There is a good diversity of subsectors: connected and autonomous vehicles with the Blackberry QNX centre of excellence, software, software as a service and companies within the life sciences sector, which are all creating a dynamic ecosystem. Companies in the park were founded as Ottawa-based or Kanata North-based companies that have grown into global multinationals. Some of the latter also have R&D centres.Collectively, the companies contribute over $13 billion in GDP annually. It has gone up 66% in the last three years from the previous economic impact assessment that was completed in 2015. They are really making an impact on the economy in Ottawa, across the country and beyond.
“There’s this really dynamic mix of local talent and local companies that have been founded from the ground up, which are mixing in or merging with multinationals that have come here to work with both the companies and the talent that exist here,” says Jamie Petten.
The park has evolved with industry trends. Networks are much more software driven than hardware driven now, bringing diversification to the park.
One of the park’s core strengths is the senior expertise from 30 to 35 years ago of engineers and developers, but also business development executives who took them through that first phase of growth and are now contributing to the next phase. For example, L-Spark is a software as a service accelerator. The primary mandate for L-Spark is to pair senior mentors and experts with the next generation of entrepreneurs and talent to help them navigate through new technology or a new way to sell it as a membership or software as a service subscription-based model. The senior experts help the next generation of talent navigate the best practices for their product development and engineering teams.
For a long period of time, Kanata North was recognized as Silicon Valley North. The thriving technology ecosystem that it relies on has several components. The introduction of a university’s presence with a campus is one of them. As compared with the preeminent ecosystem of Silicon Valley, there is a prosperous industry there from the SMEs all the way up to the global multinationals. They are technology companies that are leading edge in what they are producing.
In 2019, the University of Ottawa opened an office in Kanata North to prepare for the next generation of the park’s evolution. It is a great way to connect talent, research, and professional development with the companies located on site. It is critical to ensure that it builds talent and continues to have technology innovation that lends itself to new partnerships.
The Future of the Park – uOttawa Kanata North
The University of Ottawa has thousands of students in Engineering, Law and the Telfer School of Management who are being prepared to be future employees, leaders and important contributors to this community whether it is through co-op internships, jobs or experiential learning or getting involved in research programs and partnerships through their professors, mentors, and teachers. Researchers are part of the glue that will make this a strong community on both the training side and the research side. The University of Ottawa is ready to create successful partnerships with the industry by feeding it talent, training and solutions. It is planning to open a research laboratory in 2020. With uOttawa as part of the community, it will likely have a significant positive impact.