Monday, April 24, 2006

Does the GTA need ICT Toronto?

I read the 100+ pages of the ICT Toronto "cluster development strategy" that the City of Toronto is backing. It proposes the creation of ICT Toronto, which would promote the interests and reputation of the information communication technology sector in the Greater Toronto Area.

The report mentions a few times that the GTA doesn't have an organization like OCRI in Ottawa or Communitech in Waterloo Region. (Interestingly, it doesn't use the term GTA; it renames it "the Toronto Region" ... but it's a different "Toronto Region" from the one that the Toronto Region Research Alliance is supposed to be serving. That one includes Waterloo Region, Guelph, and Hamilton.)

The backers of ICT Toronto have to walk the line between its claims that the GTA's ICT sector is the third largest in North America ... and that it's hard done by -- a victim of government neglect (which can be righted, of course, with additional funding).

I agree that the GTA could do more to let everyone know about its ICT sector. But sometimes the report doesn't pass the laugh test, particularly when it tries to paint a picture of how Toronto companies are at a disadvantage when it comes to accessing venture capital. Yes, what a terrible blow it must be to be located in Canada's financial capital and the home to offices of most of the biggest VCs in the country. Waterloo Region didn't have any VC firms based within 75 km of here until a few years ago. Now we have one.

Of course, there are many companies in Toronto that haven't been able to make a persuasive case for their fundability. That's true everywhere and always will be. But there are scores of VCs and others in Toronto's VC ecosystem always looking for fundable companies.

You could try to make a case for the creation of a Tech Capital Partners-like organization for the GTA. It would be hard to pull off with all the VCs based in Toronto. In that environment, I don't think a new fund would be able to become the VC for early-stage GTA companies as Tech Capital has in Waterloo Region.

And there's already the Toronto Venture Group which has been working for years to help make it easier for Toronto companies to get funded. Why create a new organization to put its feet in the same waters?

I'd say the same thing for ICT Toronto's interest in lobbying to get an NRC research lab in the Toronto Region, which is already being done by the TRRA. Marketing the area's ICT cluster? Already being done by the GTMA (the group that came up with the statistic of the GTA having the 3rd-largest number of ICT employees).

(The whole thing about lobbying for an NRC lab seems so oldschool in 2006. Is Industry Canada supposed to put a lab in every city in Canada that wants to boost its economic development? The GTA doesn't have an NRC lab, but it certainly receives a lot of other funding from Industry Canada. And Toronto already has the largest university in the country ... which ICT Toronto suggests isn't doing enough to reach out to the business community.)

There are already so many organizations promoting innovation in the GTA. Does it really need another one? MaRS, which at one time was an acronym for "Medical and Related Sciences," has already outgrown that name and expanded into IT. It has taken on the role of being Toronto's OCRI or Communitech. It feels like ICT Toronto is too late to the party and is repeating a lot of initiatives that others are already spearheading.

The GTA isn't a community and won't become one in the forseeable future. It's just too big. It encompasses over 40% of the population of Ontario and extends from Darlington to Lake Simcoe to Burlington ... just short of Guelph. The quaint stories repeated in the ICT Toronto report about how everyone gathers at one spot in other tech clusters 1) are folklore anyway, and 2) will never happen in the GTA.

And, just in general -- as with almost everything written by policy wonks or academics on innovation and commercialization -- you could read the entire ICT Toronto report and never get the feeling that anyone grasps that clusters become successful when the companies within it create products that people want to buy. They aren't big on market forces and entrepreneurs.

Everything in the report revolves around having all these government organizations and associations coordinating their activities. A couple of times, it states that collaboration shouldn't be a goal in itself, and that's right. But you get the feeling that someone was just repeating a line they were told. I found it to be too navel-gazy and disconnected from the needs of companies trying to become successful in the IT space. There was little representation from SMEs and startups on the advisory committee, and it showed.

Having said all that, the report sure sounds like the kind of proposal that governments are funding these days, and that was probably its main purpose. But I wouldn't be surprised to see the whole initiative rejigged to become part of MaRS Discovery District.