1. Rural Innovation & Entrepreneurship
Building a 21st Century Workforce Learning Summit
Key lessons emerging from innovation research
Ways we can support innovation
An example from Northern Ontario
And end with a quick introduction to disruptive innovation
HEATHER HALL, PHD
Assistant Professor
Economic Development and Innovation Program
University of Waterloo

2. Firms do not innovate in isolation (Nauwelaers 2011: 468)
Interaction & Learning
Institutional Thickness
Importance of place
Over the last 20 years there are 4 key lessons that have emerged from research on innovation
The first lesson is that innovation is a social process (Wolfe 2009) or simply put “firms do not innovate in isolation” (Nauwelaers 2011: 468). It’s messy!
Second is the emphasis placed on interaction and learning between a wide variety of innovation stakeholders from firms and postsecondary institutions to government agencies and civil society.
Related to this is the importance of institutions and infrastructure to support innovation
And the final lesson is that geography or place matters as firms and entrepreneurs become attached to particular regions due to place-based assets that have a direct impact on a region’s competitive advantage

3. How can we support innovation & Entrepreneurship?
There are a number of policy tools being used around the world to try and support and enhance innovation and entrepreneurship

4. Policy Tools Policy Tools General Specific Systems-based Actor-based
Place-neutral (e.g. tax incentives for R&D)
General
Place-based (e.g. RIS and smart specialization strategies)
Specific
Improve the functioning of the RIS (e.g. associations; business networks; networking events; external linkages)
Systems-based
Focus on the entrepreneur (e.g. Incubators; skills training; reverse mentoring)
Actor-based
They can be general or place neutral like tax incentives for R&D or specific which means place-based. Some examples of this are regional innovation strategies or smart specialization strategies which are being used in the EU. We have less experience in Canada with creating regional innovation policies – Newfoundland and Labrador is actually the first province to pilot regional innovation systems strategies to enhance innovation in five pilot regions.
Innovation policies can also be systems based which means they are focused on enhancing the functioning of the regional innovation system or ecosystem through business networks, associations, networking events, and facilitating external linkages like attending tradeshows or other industry events.
And they can be actor–based or focused on the entrepreneurs which might include incubators, skills training, reverse mentoring

5. Example: Mining Innovation System Sudbury ON
With the rest of my time here this morning I thought I would share an example from Northern Ontario. Sudbury is not considered rural but it is northern and does face a number of similar challenges. And I thought it would be useful to discuss considering the efforts surrounding the mining tech ally here in the Kootenays.

6. Dirty, Dangerous, Dying Mining Employment 1971 +18,000 1981 ~8,000
2017 ~5,500
Dirty, Dangerous,
Dying
During the late 1970s, the major mining companies started downsizing and outsourcing services and production due to a number of external economic forces (e.g. increased international competition), labour disputes, and new production technologies. By 1981, the major mining companies had cut approximately 10,000 jobs. One positive result of this release of labour was that a number of these unemployed miner’s, armed with tacit knowledge of the major mining companies, started creating small and medium-sized enterprises (SMEs) to serve the local mining industry
But these companies and the presence of a cluster were overlooked by local, provincial and federal decision-makers. Mining was seen as dirty, dangerous and a dying sector in the so-called knowledge economy and the community was trying to diversify away from this dependence on mining
In the early 2000s this all changes, a mining supply and services cluster in Sudbury was officially recognized by by the city and it has became a key engine of economic growth for the region.

7. Mining Supply and Services Cluster
Employment 13,500
+300 companies
$4 billion economic activity
There are now 13,500 people working in over 300 mining supply and services companies, which generated nearly $4billion in sales in Sudbury. Their major value creation capabilities include: mining engineering and mine management; mining equipment manufacturing; customization of wheeled, tracked and flanged vehicles; equipment repair and rebuilds; and support

8. Regional Support Institutions
In addition to this cluster another important component of the regional innovation system is the presence of regional support institutions and infrastructure
This includes three components:
- organizations that promote technology diffusion or generate new entrepreneurial and innovative activities;
- postsecondary institutions, research organizations, business associations and other organizations that provide training as well as technical and scientific knowledge; and
- regional authorities that support regional development

9. technology diffusion or Support for entrepreneurial and innovative activities
The Northern Centre for Advanced Technology or NORCAT was established in 1995 at Cambrian College after the founders, Darryl Lake (Cambrian College Dean of health, science, trades and technology) and Glen Crombie (Cambrian College President), travelled to Finland to learn about the experiences of government-funded production development and innovation centres. Building on this knowledge, they hoped a technology centre would help stem youth out-migration and assist SMEs in the mining sector in Sudbury.
Norcat has since evolved to include an innovation mill which supports and mentor’s entrepreneurs and SMEs through various training programs that are developed and delivered by NORCAT in partnership with other stakeholders like the regional business centre.
They recently partnered with the Fortin Discovery Lab, a state-of-the-art advanced manufacturing facility featuring the latest equipment, technology, and advisory services to help start-ups and large companies design, prototype and test new products.
And they also have an underground technology testing centre

10. Training, Technical & Scientific Knowledge
There are a number of mining-related education and training programs that exist in Sudbury that contribute to the mining innovation system. This includes the Bharti School of Engineering, the Goodman School of Mines and the Earth Sciences faculty at Laurentian University. Cambrian College and College Boreal offer mining engineering technician and technology programs along with other mining-related trades degrees.
A number of mining innovation research institutions have also emerged to build on this education and training capacity. For example, the Centre for Excellence in Mining Innovation was created in 2007
Other research institutions include the Mineral Exploration Research Centre (MERC), the Centre for Research in Occupational Safety and Health, the Vale Living with Lakes Centre, and the Mining Innovation Rehabilitation and Applied Research Corporation (MIRARCO)
Last year in effort to enhance collaboration between these various organizations and institutions, Laurentian created Laurentian Mining Innovation and Technology (LMIT).
In addition to these efforts, the Sudbury Area Mining Supply and Service Association (SAMSSA) works to promote and maximize the opportunities of SMEs in the region, across Canada and internationally

11. Regional authorities
Final component of the regional innovation system is the presence of regional economic development authorities.
The headquarters of the Ministry of Northern Development and Mines and the Ontario Geological survey were moved to Sudbury in the late 1980s.
There are also senior government regional development agencies like the Northern Ontario Heritage Fund Corporation (Ontario Government) and FedNor (Government of Canada) that provide funding for entrepreneurship, innovation, research and development (NOHFC 2016; FedNor 2016)
At the local level, mining innovation is a cornerstone of the economic development strategy for the City of Greater Sudbury and a recent branding strategy is marketing the City as Canada’s Resourceful City; building on the City’s rich mining history and perseverance.

12. Challenges Access to capital Understanding of innovation
Complacency/Risk Averse
Lack of collaboration
“Rip-it-out-and-ship- it” out mentality
Home market sector dependence
Challenges
Despite its success there have been a number of challenges along the way and these also resonate with innovation work I’ve done in the Yukon and Newfoundland and Labrador.
Access to capital – comes up consistently despite the presence of government regional development agencies. Part of this is related to knowledge, program exclusions and the complex paperwork involved in some of the applications.
There is a real lack of understanding of what innovation is in rural and northern communities. The perception is that it needs to be product innovation and new to the world when this is not the case.
There can be a certain degree of complacency or fear of trying to do things differently or start a business.
Lack of collaboration between those key innovation stakeholders can also be a challenge.
Much of the innovation in the mining supply and services sector in Sudbury is “focussed on backward linkages and not value added development. This fuels what I call the “rip-it-out-and-ship-it-out” mentality that is pervasive across Canada. And when we export our unprocessed or semi-processed products like minerals we also exporting most of the opportunities to innovate,
Equally concerning from a firm-level perspective in the mining supply and services cluster, is the home market sales concentration and dependency on one or two customers
As a result, Sudbury is still prone to the effects of the boom and bust nature of the resource economy, which impacts demographic growth, economic diversification, and overall community sustainability

13. Lessons for Success? Place matters! Be strategic – have a plan
Act regionally
Be collaborative
It won’t happen overnight
Foster a culture of innovation

14. Disruptive Innovation
I wanted to end my talk this morning with a quick mention of disruptive innovation because I think rural and northern regions will be impacted more by this shift in technology

15. In 2015, Deloitte released a report entitled the Age of Disruption: Are Canadian Firms Prepared? to highlight how advances in technology including networks, advanced robotics, advanced manufacturing, platforms, and artificial intelligence will fundamentally reshape the future of life and work in Canada.

16. Internationally, increased automation in the resource sectors is already a reality from the first autonomous oil rig in Northern Norway to driverless mining vehicles in Australia.
We need to be prepared for job creation, job destruction and job displacement.

17. Acknowledgements Further information or questions
Thank you for the generous research support from:

18. Smart Specialization (S3)

19. Place-based strategies that
Build on unique regional assets, competitive advantages and potential for excellence;
Engage stakeholders and encourages innovation and experimentation;
Are evidence-based with sound monitoring and evaluation systems;
Have a broad view of innovation;
Focus policy support and investments on key regional priorities
170 EU regions registered in the S3 platform along with 9 non-EU regions
They are a conditionality to receive funding from the European Structural and Investment Funds as part of the European Commission’s Cohesion Policy
Healey, 2015

20. Entrepreneurial Discovery Process
Utilizing entrepreneurial knowledge that exists in a region
Taking an entrepreneurial approach
Involving all types of innovation stakeholders
At the heart of Smart Specialisation are entrepreneurs – because they are in the best position to discover areas of research and development, innovation, and competitive advantages in a region
And so the entrepreneurial discovery process – utilizes entrepreneurial knowledge that exists in a region
It also has participants take an entrepreneurial approach which means focusing on market opportunities, differentiating from others, taking (and managing) risks and seeking alliances to optimise the access to and use of resources (physical, financial, intellectual, market knowledge, etc.).
It also includes all types of innovation stakeholders from businesses, to universities, investors and civil society

21. S3Approach Analysis of Regional Context Governance Shared Vision
Identification of Priorities
Policy Mix
Monitoring & Evaluation
The RIS3 approach includes six steps:
first, the analysis of the regional context and potential for innovation;
second, creating an inclusive governance structure to ensure participation and ownership;
third, creating a shared vision for the future of the region;
fourth, identifying a small number of priorities for regional development;
fifth, defining appropriate policies, a road map and an effective action plan; and
sixth, integrating monitoring and evaluation mechanism
Source: European Commission 2013