Why Vancouver - The City's Surprising Rebirth as an Innovation Centre

Does Silicon Valley in California come to mind when I mention innovation? How about Boston or the Research Triangle in North Carolina?

How about Vancouver?

Traditionally a western outpost far from the major city centers of Toronto and Montreal, In Canada, Vancouver as often played second fiddle. Yes, it's a large metropolis but, compared to the large companies of Eastern Canada, Vancouver was a backwater devoted to mining and timber.

No Longer.

Increasingly fast growing high tech companies are locating major operations in Vancouver. Microsoft recently opened a new development center where software engineers and developers will work on over half of Microsoft's products. And of course, Vancouver is home to a thriving cleantech community.

Sure, Vancouver's proximity to high tech centers in Washington and California plays a part, but that's not the only reason. So, what makes Vancouver so special? The cost of living is high as compared to many Canadian and US cities. It's a long way from San Francisco and New York. It's not all that well known on the international scene, though that is changing.

Probably the better question is what makes any city good for innovation.

Jeffrey Chu, of Fast Company in a podcast discusses some of What Makes a City Fast. Chu cites a confluence of different factors including diversity and in migration. Both of which characterize Vancouver. He goes on, in a specific piece, Fast Cities - 2007 discussing Vancouver, that besides being named one of the world's most livable cities in a Mercer survey...

Its EcoDensity initiative aims to focus that growth by developing more crowded neighborhoods at the city center. The dual goal: to build sustainable neighborhoods with the scale to make green energy technologies affordable and to preserve surrounding forest and mountain ecosystems.

Our take is that Vancouver has much of what is needed to support thriving companies. Our diverse population brings an international flavor. Like many West Coast cities, proximity to the Far East and Far Eastern manufacturing centers has brought a highly educated foreign workforce to our shores. The relatively mild climate has made them stay, bringing diverse perspectives on life and on business, a key for successful innovation as we've mentioned in previous posts.

Vancouver's highly skilled workforce and established technology companies like Electronic Arts has attracted other and often younger workers to the city and created a cultural center with nightlife and activates that attract still more workers.

Vancouver's proximity to major tech centers in the US plays an important role as well as we've mentioned, but there's more. Canadian government support for development of newer, innovative industries and the spotlight that has turned to Vancouver, as host of the 2010 Olympic Games has encouraged companies to take another look at the city.

We believe that cities that are prepared to host innovation in the 21^st need to be diverse, green, creative and influential. Vancouver is certainly one of them.

Following Mobile Web Trends Toward Profits

Word of the world of opportunity in the mobile web has been around since the early part of this century. Though still in it nascent stage, a few applications are starting to stand out as areas ripe for innovators as detailed in this post Five trends driving the mobile web or as the authors, Matthaus Krzykowski and Matt Marshall put it:

...those areas most ripe for pillaging by start-ups

As one who spends a fair amount of time thinking, reading and writing about innovation, the mobile web is an area I keep an eye on. Why? Because it is so early in the growth stage. It's always interesting to watch as a whole new technology takes over. Will it follow the same trajectory of those that came before or will it morph and branch off in another direction?

The authors of this article discuss the various stages of market adoption in the technology arena:

Incubation

Early Traction

Acceptance

Adoption

Mapping the various companies and technologies involved in the mobile web right now they come to a not too surprising conclusion. An opportunity exists for well organized, well funded startups with well thought out and well executed, innovative products

You'll see the action tends to happen in sectors that are somewhere between their "early adoption" and "adoption" phases

Reading their fairly technical discussion of mobile phone trends, I don"t always agree with their assessment of where various technologies lie in the market adoption process, but it's interesting to note which applications they have identified as at a tipping point.

The Five Trends

1. Mobile Advertising

2. Mobile Social Networks

3. Mobile Internet Interface- Search

4. Mobile Mapping And Navigation - Mobile maps

5. Mobile Mapping And Navigation - Location based

As you can see, the 5 trends include some that have had entrepreneurs and large companies salivating since the introduction of the mobile web, while others are newer entries. Mobile advertising, early to be considered but slow to gain traction, may need innovative new delivery systems or more likely ways to get around the "hassle" factor to really take off. Others, like mobile navigation seem a given, as evidenced by the explosive growth in sales of GPS devices.

So, does this mean that innovators in the mobile field should focus on developing applications in those segments deemed to be hottest and most ripe for exploitation? Well no. Perhaps, and it seems likely given the attention given to the study on which this analysis was based, that venture capitalists and angel investors will be looking for companies operating in those spaces.

However, as we've seen as Web 1.0 had morphed into Web 2.0, the biggest opportunities are often not visible until the technology AND the marketplace matures. Who would have guessed that social media would play such a big role with users of the web 10 years ago?

My advice to innovators is to continue investing time into your ideas, whatever they may be. Ensure that your technology works well and smoothly. Make sure it meets current consumer needs and don't be surprised if user input turns your idea in a whole new direction. Just ask the founders of Ebay ( a market for exchanging Pez dispensers) or Youtube (a place to store videos) or even Yahoo, originally just a directory for friends.

The Canadian Innovation Void - Is It Holding back The Economy?

A Nova Scotia Chronicle-Herald article starts off with a thought that is of concern to many of we Canadians in marketing.

THE BIG QUESTION in Canada is, why are businesses performing so poorly as innovators when compared to their American and many other foreign competitors?

They are? Well yes.

In the early 1990s, output per hour of working in the Canadian business sector was close to 85 per cent of the U.S. level.

It is now down to about 75 per cent of the U.S. level, reflecting differences in innovation, which comes from bringing on new products or services or finding better ways to do things.

The article goes on to say that much of the difference in innovation comes down to management. Canadian companies are less enterprising than their counterparts in the U.S. and in many companies in Europe. While the government is often blamed, it is rather that Canadian companies are more focused on cost cutting to improve profitability than on inventing new products and services to grow their businesses.

While cost cutting, American style tends toward restructuring resulting in a leaner, more agile and risk taking environment, in Canada, lean manufacturing is not on the radar for over 1/3^rd of all companies (as compared to only 18% of companies in the U.S. and Europe.)

So why is this? In my opinion, Canadian companies are very reliant on the Natural Resource Sector - the drill it, mine it, chop it mentality. This could be holding them back from innovating. To fully embrace a culture of innovation Canadian companies need to learn from their counterparts to the South and take more chances.

We need to take greater risks in manufacturing, in exporting, in business development. We need to restructure organizations and cut out the fat. While the United States model of wholesale elimination of levels of management may be too drastic for Canadians to consider, European models, particularly those in Germany and Scandinavia may have ideas that can be implemented effectively.

As we struggle with the concepts of lean manufacturing, risk taking and innovation, we fall behind countries who have adapted these concepts to their own particular culture and political environment. As we fall behind we become not only less competitive but also risk continuing to grow our economy.

Finding the right answer is vital to our future because without more innovation, and the higher productivity it brings, we will have a tough time sustaining a prosperous economy and a high quality of life.

Amen.