Should New York look to Montreal for tech hub model?

by Christine Wong

What’s the best way to turn a city into a world class hub for high tech startups?

Does a “build it and they will come” overnight approach really work? Or is it a process that can only happen organically over time?

Christine Wong

Michael Bloomberg, New York City’s tiny, brash, billionaire mayor (personal 2011 net worth: $20 billion), is taking the first approach. He’s trying to turn the Big Apple into the next Silicon Valley by offering up $100 million in city-owned land and infrastructure (for free) to build a two-million-square-foot high tech campus on Roosevelt Island, right in the heart of the city. Cornell University and Israel’s Technion Institute took the bait and are now developing the mega project together.

These New Yorkers aren’t fooling around: the campus’s first students are expected to start classes there by 2017, just five years from now. And Bloomberg is throwing some big numbers around, saying the plan could generate 600 startup companies which would in turn create another 30,000 jobs.

The Russians are on the same wavelength as Bloomberg. A similar venture is going on in sleepy Skolkovo, a town just outside Moscow where the Kremlin is building a sprawling facility to boost innovation in energy, IT, telecom, biotech and atomic technologies. The Kremlin is being secretive about exact plans and dollars spent (the KGB legacy is hard to shake, I guess). But skeptics are wondering how startups spawned there will flourish when government corruption and criminal gangs still interfere so much in the nation’s business community.

The Big Build approach to creating high tech cities almost out of thin air has drawn scoffs from the likes of Silicon Valley journalist Chris O’Brien. He points out that in the case of New York, it will take more than a $100 million facility to put the Big Apple on par with the Valley any time soon. New York startups raised $2.2 billion in VC in the first three quarters of 2011, peanuts compared to the $8.4 billion raised by their California cousins. And Silicon Valley had 17 tech and biotech IPOs in 2011, dwarfing the single, solitary stock market debut made by one New York tech firm last year.

Vermont-based serial entrepreneur Ty Danco has a unique take on this. In a year-end blog posting, he gave props to Montreal for “best big push by a city to build a startup ecosystem.” He gives the city a shout out for achieving many milestones since 2009, including: the launch of the FounderFuel accelerator, the creation of new provincial programs set up to match angel funding, the development of AngesQuebec (which he calls “the largest angel group in Canada (and) soon to be one of the largest in North America”), the premiere of the International Startup Festival, and the founding of Notman House, an office and event space for the city’s local IT community.

And of course there is Waterloo, Ont., known as the birthplace of OpenText and the now downtrodden Research In Motion, which both went on to become global giants. But the University of Waterloo had a long history of turning out some of the best and brightest computing and engineering minds in Canada for decades before that.

It also took RIM and OpenText years to get to the international stature they carved out in the market place. It didn’t happen overnight.

When I recently asked Iain Klugman, president of the Waterloo IT organization Communitech,     how RIM’s troubles would affect Waterloo’s IT community, he wasn’t biting his nails.

“There are 800 technology companies in Waterloo. RIM is the biggest and most successful by far. But it’s kind of full steam ahead,” Klugman told me.

His message was clear: since Waterloo’s IT community wasn’t built solely on the back of one facility, organization or company (in this case, RIM), it won’t fall apart just because of RIM’s misfortunes either.

Over the past three years, even in the face of incredible global economic turmoil, Waterloo’s IT sector has still managed to create 531 new companies and 1,441 jobs at startups, plus 1,000 new jobs at medium- to large-sized tech firms.

New York City already has a strong high tech community that’s earned it the nickname Silicon Alley. Plunking down $100 million all at once will definitely boost the activity that’s been going on in the city for years. It may even help NYC give Silicon Valley a run for its money – many years from now.

But from where we’re sitting, Montreal and Waterloo’s little engine that could approach looks like a better use of public resources than the $100 million in primo real estate that Bloomberg is ponying up in a heartbeat courtesy of New York taxpayers.  

Christine Wong
Christine Wong
Christine Wong has been an on-air reporter for a national daily show on Rogers TV and at High Tech TV, a weekly news magazine on CTV's Ottawa affiliate. She was also an associate producer at Report On Business Television (now called BNN) and CBC's The Hour With George Stroumboulopoulos. As an associate producer at Slice TV, she helped launch two national daily talk shows, The Mom Show and Three Takes. Recently, she was a Staff Writer at and is now a freelance contributor.

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