7.       Ottawa INDUSTRY CLUSTER SUPPORT PROGRAM


PROGRAMME DE SOUTIEN AUX GRAPPES D'INDUSTRIES D'OTTAWA

 

 

COMMITTEE RECOMMENDATION

 

That Council approve partnership funding in the amount of $140,000 over a two-year period to support the implementation of the Ottawa Industry Cluster Support Program.

 

 

RECOMMENDATION DU COMITÉ

 

Que le Conseil approuve un cofinancement totalisant 140 000 $ sur deux ans afin de soutenir la mise en place du Programme de soutien aux grappes d'industries d'Ottawa.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOCUMENTATION

 

1.         Planning and Growth Management, Deputy City Manager’s report dated
24 March 2006 (ACS2006-PGM-ECO-0008).

 

 


Report to/Rapport au :

 

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

 

and Council / et au Conseil

 

24 March 2006 / le 24 mars 2006

 

Submitted by/Soumis par : Ned Lathrop, Deputy City Manager/Directeur municipal adjoint,

Planning and Growth Management/Urbanisme et Gestion de la croissance 

 

Contact Person/Personne ressource : Michael Murr, Manager, Economic Development

Economic Development and Strategic Projects/Développement économique et Projets stratégiques

(613) 580-2424 x 25195, michael.murr@ottawa.ca

 

City-wide

Ref N°: ACS2006-PGM-ECO-0008

 

 

SUBJECT:

Ottawa INDUSTRY CLUSTER SUPPORT PROGRAM

 

 

OBJET :

PROGRAMME DE SOUTIEN AUX GRAPPES D'INDUSTRIES D'OTTAWA

 

 

REPORT RECOMMENDATION

 

That Corporate Services and Economic Development Committee recommend that Council approve partnership funding in the amount of $140,000 over a two-year period to support the implementation of the Ottawa Industry Cluster Support Program.

 

 

RECOMMANDATION DU RAPPORT

 

Que le Comité des services organisationnels et du développement économique recommande au Conseil d'approuver un cofinancement totalisant 140 000 $ sur deux ans afin de soutenir la mise en place du Programme de soutien aux grappes d'industries d'Ottawa.

 

 

BACKGROUND

 

The City of Ottawa is firmly committed to cluster-based economic development. This commitment began in 2000 with the study by The Ottawa Partnership (TOP) entitled Choosing a Future: A New Economic Vision for Ottawa which recognized that “clusters are the engines that fuel our economy…clusters drive most of the overall growth of our economy, and their success is key to improving the standard of living for all our citizens.”

 

Put simply, clusters are sets of competing and complementary export-based industries and firms which are linked together by formal and informal relationships. In Ottawa, the most recognized clusters are telecommunications, software and tourism.  There are however a number of growing clusters, such as photonics, security, and wireless that provide significant economic development opportunities for the future.

 

The importance of cluster-based economic development is also recognized in the Ottawa 20/20 Economic Strategy, as approved by Council in April 2003. The Economic Strategy identifies the need to 'strengthen industry clusters and entrepreneurship' as one of five overall strategic directions and lists as an immediate priority action the need to 'establish strategic support capacity for industry clusters to ensure that collaborative activity is initiated, managed and productive.'

 

Most recently, the need to support the City's clusters has been reconfirmed within the City Corporate Plan. The Corporate Plan's Prosperity Agenda identifies as a key action item the need to 'implement an industry-cluster program to support local exporters, generate additional revenue and stimulate demand for local products.'

 

Development of a Support Model

In 2004, a partnership including the City of Ottawa, OCRI, and the provincial and federal governments completed the “Ottawa Hi-Technology Cluster Support Feasibility Study”. This study examined various best practices in cluster support and resulted in the definition of a support model addressing the needs of Ottawa clusters. That model is illustrated below.

 

Figure 1: Cluster Support Model

 

 

 

The model provides a set of common logistical support services (i.e. such as database/mailing lists, website maintenance and accounting) to each of the participating clusters, as well as a range of strategic resources (i.e. such as Global Marketing, Entrepreneurship Centre and TalentWorks) depending on the specific need.

 

The model was designed to focus industry volunteer time into strategic initiatives that benefited the cluster as a whole. Further, there are considerable existing community resources to assist the clusters. The model emphasizes the use of existing community resources and programs rather than the seeking of new funds.

 

Piloting the Model

In partnership with OCRI, the City began a pilot implementation of the model in 2005. The pilot was designed to verify the basic premises of the model by gaining the support of key clusters and illustrating the effective leveraging of existing resources available to the community.

 

The pilot project was based on the following principles:

 

 

Outcomes of the Pilot

Logistic Support - Over the past year, the Manager of Cluster Support has worked with each cluster to develop relationships and to ensure the model is effective.  This interaction and hands on approach has contributed to a thorough understanding of the logistical needs of each cluster.  Based on these needs a logistics and support package was developed.  This common framework will allow the cluster volunteers to free up their time to focus on what they do best, addressing the strategic challenges of their industry.

 

The package includes:

·           Membership management;

·           Financial management;

·           Website development, hosting and maintenance;

·           Member communications; and

·           Event management.

 

Through the provision of in-kind service by community business and integration of cluster logistic activity into existing OCRI activities, logistic support packages were implemented with the Wireless, E-business, Photonics, Call Centre (ORCCA), and Security Clusters. 

 

Strategic Initiatives - Sessions were held with the executives of the clusters to define strategic initiatives.  In partnership with the clusters and the stakeholders, strategies and initiatives were defined for implementation. The focus of the initiatives is to foster strategic development of the industry sector.  The initiatives are being executed by taking advantage of existing OCRI programs and community resources, resulting in the minimal requirement for further funding.

 

An Early Example of Effective Cluster Cooperation - No better example of the effectiveness of cluster cooperation can be found than the Canadian Photonics Fabrication Centre (CPFC). The movement of a device from engineering model through prototype to production is an expensive process requiring highly specialized equipment.  A challenge for Ottawa’s growing photonics community was affordable access to such a resource.

 

The Ottawa Photonics Cluster (OPC) worked with the National Research Council (NRC) to define a national facility to respond to this challenge in the photonics sector. The City of Ottawa, Ottawa Economic Development Corporation (prior to its merger with OCRI), the NRC and OPC then pulled together to secure Federal and Provincial funding for the project and ensuring that the facility would be located in Ottawa. Carleton University teamed with NRC to add the educational and university research link and the CPFC was built on NRC’s Montreal Road campus, officially opening in 2005.

 

Today, a unique facility in North America rests in Ottawa’s east end. To replicate the facility today would cost $200 million, effectively limiting new competition. The CPFC now employs 20 highly skilled staff with an annual operating budget of $4 million. It attracts clients from Ottawa, across Canada and the United States. Together with the Industrial Partnership Facility (IPF) at NRC, it offers a significant development node for Ottawa’s East End with a modest investment from the City.

 

 

DISCUSSION

 

Ottawa Industry Cluster Support Program (ICSP) Demonstration Project

 

Having developed the Cluster Support Model and run a one year pilot to verify its validity and achieve buy-in from key clusters, the Economic Development and Strategic Projects Branch  recommends a $140,000 funding commitment to support a two year demonstration project to fully implement the model and  embed cluster support as a permanent operational activity within OCRI.

 

The objectives of the demonstration phase are:

 

 

The City funding will be used to support a full time resource as the Manager of Cluster Support within OCRI's Global Marketing unit. This individual will work with the clusters to demonstrate the value of the initiative and to leverage funds from existing community programs and the two senior levels of government to execute strategic initiatives. The City's $140,000 funding will be leveraged by a minimum of $230,000 in partner cash and in-kind contributions over the two-year period.

 

Various aspects of the logistics support model have been developed and tested. During the demonstration phase, these will be fully implemented for participating clusters and evaluated for effectiveness.

 

To build relationships within the clusters, smaller strategic initiatives have been defined and executed. The Demonstration phase will see a new series of focus groups executed amongst participating clusters to define strategic challenges in cluster infrastructure and develop and execute projects to address these challenges.

 

The Ottawa Partnership (TOP) fully supports the need to increase the competitiveness and strategic capacity of the City's industry clusters. The Industry Cluster Support Program will complement and reinforce other TOP-led initiatives in the areas of innovation and commercialization, critical talent development and global marketing.

 

Upcoming projects

An example of a strategic initiative is the one being developed with the Ottawa Regional Contact Centre Association (ORCCA). That cluster now represents over 25,000 employees, most of which are in the higher end financial services and technical support sectors. They have identified a growing skills shortage in the industry and a lack of new entrants. If not corrected, this situation could lead to the shifting of existing and new jobs to other regions.

 

The project being defined involves:

 

 

ORCCA is establishing a Working Group to work with the Manager of Cluster Support to define and implement the project. The members have agreed to financially support the project as will the Federal and Provincial governments. Ottawa’s Colleges and Universities will also participate. This project will clearly demonstrate how cluster action can lead to the effective deployment of available community resources to address a cluster challenge.

 

In Conclusion

The Ottawa Industry Cluster Support Program will deliver on the City's stated commitment in both the City Corporate Plan and Ottawa 20/20 Economic Strategy to support the City's industry clusters. The initiative leverages existing resources and expertise within OCRI to help clusters address the issues facing their industry and seek new opportunities for growth.

 

The initiative will also benefit OCRI's Global Marketing unit by given it a closer relationship and better understanding of our local clusters, and their industry sectors. This insight will enable it target their marketing activities more efficiently and be in a position to add greater value to perspective companies that are looking at Ottawa as a place to do business.

 

 

CONSULTATION

 

Economic Development staff have consulted with OCRI in the development of this report. OCRI has consulted and worked directly with seven clusters representing 700 companies throughout the development of the cluster support model.

 

The Ottawa Partnership (TOP) fully supports the Ottawa 20/20 Economic Strategy and the need to support the City's industry clusters.

 

 

FINANCIAL IMPLICATIONS

 

Subject to Council approval, the City's funding contribution in the amount of $140,000 is available in Account 903365, Economic Strategy Implementation.

 

The City's funding will provide the required base-level support for operating the Ottawa Industry Cluster Support Program until March of 2008 and will be leveraged by a minimum of $115,000 per year in partner cash and in-kind contributions.

 

 

DISPOSITION

 

Economic Development Staff to take action as appropriate.