The Mark Carney government just announced Canada’s first Defence Industrial Strategy, designed to “strengthen security, create prosperity, and reinforce strategic autonomy.”

The Defence Industrial Strategy positions Canadian industry to take advantage of $180 billion in defence procurement opportunities and $290 billion in defence-related capital investment opportunities in Canada over the next 10 years, with an anticipated $125 billion downstream economic benefit by 2035. The Defence Industrial Strategy will create 125,000 high-paying careers, increase our defence exports by 50%, raise the share of defence acquisitions awarded to Canadian firms to 70%, and grow Canadian defence industry revenues by 240%. Within a decade, we will raise maritime fleet serviceability to 75%, land fleets to 80%, and aerospace fleets to 85% to bolster Canadian defence.

—Prime Minister of Canada

This is a game-changing move, both militarily and economically, yet there is an obvious difference between ambitious announcements and breaking ground. And there is a profound difference between money spent and money well spent.

We’re suddenly in one of those ‘get it right and win or screw it up and lose’ moments in time where emerging opportunities—including potential linkages with the European Union and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)—are subject to compressed geopolitical timelines. With regard to defence, for example, the Defence Industrial Strategy isn’t occurring in a vacuum. Canada, European nations, Australia, New Zealand and others have all been shocked into action by virtue of shifts in American policy, war in Ukraine, and escalatory events over Taiwan.

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For all of these nations, major announcements at the national level are seismic at the local level. Even assuming that not every defence dollar, pound or Euro is up for grabs, massive opportunities remain for every community willing to put innovation at the head of its agenda. This isn’t idle speculation: the defence industry is a perfect example of massive change on every front, from communications to drones to “algorithm-first” AI defence systems.

While it may remain the case that innovative new technologies designed to protect the home front, transform the battlefield, or guard supply lines are cooked up on a limited scale with a small teams, it takes partnerships, coordination, and capitalization to truly unlock them. This is why, at the local level, innovation readiness leaps to the forefront. The extent to which a community can support defence industry innovators is critical: failure means great ideas die on on the bench or leave for greener pastures. Success means retaining and attracting talent, business, capital and all that means for jobs, quality of life and economic growth.

Inuvik: Creating the Winning Conditions

Inuvik, Northwest Territories, is a great example of a community well-situated to benefit from the increased defence spending. Home to one of many planned Northern Operational Support Hubs, from which Canada will project its Arctic military power, proximity to the existing base already makes Inuvik home to several defence-related businesses, including Pan Arctic Inuit Logistics Corporation (PAIL), Sapujjijiit (owner of the brilliant tagline “Defender of the Arctic”), and Arctic defence company ILS.

The defence spending announcement raises questions for Inuvik’s government, business, academic, and economic development leaders, ones that likely revolve around value-capture issues:

• What do we need to do to capture as much defence spending as possible?

• What structures (physical, digital, social, capital) do we need to create or improve to take full advantage?

• Who needs to be at the table and what roles do they play?

• How do we unlock Inuvik’s full economic potential, not just in defence spending, but across the board?

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Snapshot: Inuvik

Running a quick innovation ecosystem diagnostic should be among their first steps. A snapshot is useful, particularly understanding the transfer of knowledge among the main players.

Explore Your Local Innovation Ecosystem

Reducing barriers to innovation is crucial. Places that make it easier for researchers, inventors, and early stage firms to experiment make themselves attractive. Simply put: people come to places where they can build.

Coordination within an innovation ecosystem is crucial; forging productive strategic partnerships that promote knowledge transfer and FDI strengthens everyone.

The diagnostic presents the local innovation ecosystem as a virtuous innovation cycle:

1. Inputs: research, talent, and capital

2. Dynamics: knowledge flow and interconnections

3. Outputs: applied research, IP, startups, products, jobs

4. Reinvestment: recycling success back into the system

How innovation flows in Inuvik. (Screenshots from a sample report.)

Analyze Your Local Innovation Ecosystem

When the diagnostic is run by people with a clear idea of its true current capabilities, the resulting report is an excellent place to begin optimizing the ecosystem. (Sections of the report include an executive summary, the 4 parts of the virtuous innovation cycle, recommendations, strategic analysis, asset map, visualizations, and system readiness.)

Defence, Critical Industries, Economic Development, and Quality of Life

Every community has an innovation ecosystem. No innovation ecosystem is perfect. The key lies in seeing it for what it is: a complex adaptive system whose evolution and growth we can intelligently influence. When we understand how well its actors and assets are connected and performing, we are empowered to act with greater precision and impact, optimizing for and accelerating economic growth. That’s jobs, hope, future-proofing and economic resilience.

In Canada, on defence, the official national policy is designed to strengthen security, create prosperity, and reinforce strategic autonomy. For communities everywhere, it is the same game, adapted to their local context and building upon their unique local strengths: secure a prosperous economic future.

In terms of outlook, I tend to fall into the latter category. From geopolitics to economics to artificial intelligence, it feels as though massive waves of change are inexorably rolling our way—and the waters are already pretty choppy. For anyone like-minded this raises a rather existential question: Hold your breath and hope, or dive in and get moving?

If you’ve got a problem-solving disposition, the answer is pretty clear. Hope is a product of action: the more you do, the more progress you make, and the more hope grows. This is a necessary mindset during a time of profound change, feeling empowered is vastly superior to being helplessly swept away.

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Local is where it’s at.

My own interest is local. Or perhaps better put: my interest is localities. How do the cities, towns and regions of the world harness change to their advantage? What role does innovation—the practice of engineering change to one’s advantage—play for each place? How do they make it happen? I find this endlessly fascinating. And because this is my interest, I’ve managed to interview a lot of amazing people whose careers are dedicated to making their place, from Lansing to St. John’s to Sudbury, the best possible place to live and work.

But I’ve also been researching innovation ecosystems, how they behave, and the economic models that affect them. They’re best thought of as complex adaptive systems, ever-evolving based upon their own unique set of geographic, social and economic circumstances. And while no one directly manages an innovation ecosystem or local economy, how well they perform can be observed, measured and influenced. The most important concept is economic complexity, with research pioneered by Harvard’s Ricardo Hausmann. A place is economically “complex” when it can make and export a wide variety of sophisticated, hard-to-copy products that few other places manage to produce. This creates local advantages, making it more economically resilient and more adaptable to change.

With the inclusion of a strategy framework, interviewing local innovation leaders via an economic complexity lens creates a productive interview format. My questions are straightforward but always situated within this methodology, producing insightful answers to the complex challenges of local innovation and economic development.

Speaking of complexity…

And then a truly massive wave of change hit, this one more with far more personal impact than anything in years. They call it, with amusement and memes, vibe coding. But that term is entirely, profoundly misleading. At Anthropic, home to mind-bendingly powerful AI like Claude Opus 4.6, software engineers have stopped coding. They prompt. They guide. They check. They interact with the AI. And then they push out the code to people like you and me.

For me, tools like these are life changing, no exaggeration. From the business side, I’ve got a strong product background. In the past, partnered with extremely talented developers, I’ve built some pretty awesome software—stuff I remain proud of. But my critical weakness was life altering: not a coder.

But now? The door hasn’t just been kicked down, it’s been vaporized. I’ve got the product background. I’ve got a specific base of knowledge in a specific area, and a unique framework to help make sense of it. So, a couple of months ago in mid-December, I started, beginning from—with no exaggeration—a complete, total, and absolute lack of understanding of how to build a fully functional application.

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Making software, one eye-rolling mistake at a time

Around mid-December I was prototyping on Google AI Studio. A week later I was on Firebase Studio. I was such a novice that it confused the hell out of me when everything needed to be backed up on GitHub. By early January, something odd was happening: the needs of my product were outstripping the Firebase AI’s capability to deliver. It made errors, lots of them. Obviously Mr. Vibe Code over here was the author of his own demise on many occasions but the overall pattern was clear: individual AI’s have a ceiling and I’d gone a distance beyond Firebase’s.

I’d noticed that GitHub has its own IDE (integrated development platform) but was pretty wedded to Firebase so it was really only by necessity that I took a deeper look at GitHub’s AI development tools. GitHub’s IDE has lots of AIs to choose from, not just one. I chose Claude Opus 4.5 (now 4.6) and redoubled my efforts.

Hello, Ecosystem Navigator!

This was the moment the game changed again. Suddenly, the thing I really wanted to deliver—a genuinely helpful, hyper-local innovation ecosystem diagnostic using my virtuous innovation cycle framework—was entirely within reach. Plus account management, Stripe integration, Serper integration, data management for comps and the myriad tiny things without which success is inconceivable.

Ecosystem Navigator

The result is two things. The first is the classic minimum viable product (MVP) with endless possibilities for growth and improvement. So new that branding and naming isn’t yet settled—I’ve barely placed The Groundbreakers brand in there. The second? It’s really good! It’s by no means perfect, and the grind of bug fixing and improvements big and small is daily, but it’s good. The framework is excellent; the AI does the heavy-lifting.

The thing I envisioned, a quick, practical tool economic development and innovation professionals will regularly use to get a quick gauge on where they stand, to compare with other places, to convey results to partners and other parts of government, has come to life in 1.0 form.

Change is coming. Managed correctly, bent to our advantage, that’s a good thing. Every place, everywhere, has the tools and local advantages to start. We have new ways to approach old problems. We take a step, we make progress, and a virtuous innovation cycle springs into life.

Notes

• As part of soft launching the product, over the past week I reached out to about 40 people, literally from around the planet, asking them to have a look. My thanks to them for their interest and feedback!

• Feel like helping? If you’re from an economic development background—or know someone who is—then please feel free to reach me! Simply reply to this email.

• Yes, video interviewing will continue. I had to pause and build the app, it was an overriding imperative. So, I’ve got more video interviews to publish in the coming weeks and months.

• On that score, I realized that I was overdoing the onscreen text. When the next wave of video interviews are published, they’ll be simpler. My hope and intention remains finding ways of extracting the maximum value from the important things each interviewee says… too much text wasn’t the way.

We also talked about lifestyle as a differentiating factor. The Lansing region is a rare (perhaps the only?) example of being 15 minutes from both the countryside and a world leading particle accelerator.

For anyone engaged with local innovation ecosystems—EDO professionals, government, chambers of commerce, academic institutions, incubators—these eight minutes are worth your time.

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Interview Part One

Key Takeaways from St. John’s

Here’s why this video is a must-watch for anyone involved in innovation and economic development:

• Strength in Numbers: St. John’s is building its future by fostering collaboration across municipalities, post-secondary institutions, and various business sectors. This collective approach is a key to navigating economic challenges and creating a stronger whole.

• Resilience as a Core Competency: The region’s history of overcoming challenges, from the collapse of the fishery to oil price fluctuations, has created a culture of resilience. This isn’t just a byproduct of tough times; it’s a strategic differentiator that attracts talent and investment.

• From Oil to Innovation: The video reveals how the city’s oil and gas industry became a direct catalyst for its tech sector. The need to solve complex problems in a harsh offshore environment led to the creation of new technologies and a highly skilled workforce, demonstrating how a region can leverage its existing strengths to develop new, sophisticated industries.

• A Billion-Dollar Success Story: Discover how Verafin, a company that started in a local incubator, was acquired by NASDAQ for $2.75 billion, marking the largest tech acquisition in Canadian history. The most remarkable part? The company and its founders stayed in St. John’s, proving that you don’t have to leave home to achieve global success.

  

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From the Video. LINK Analysis: St. John’s, Newfoundland and Labrador

• The Power of Integrated Leadership: St. John’s is building a leadership coalition that brings together over 40 diverse organizations—from municipalities and universities to innovation centers and chambers of commerce. This is more than just a collaboration; it’s a way to ensure all actors are aligned towards a common vision and can leverage their unique resources to create innovative solutions for complex challenges -- Benefitting the entire region.

• Create a self-sustaining, upward spiral of growth: The St. John’s strategy is designed to create a virtuous innovation cycle. By bringing a diverse group of

  stakeholders together to create a shared plan, they are fostering intentional interaction and collaboration. This will lead to the creation and transfer of new knowledge, which in turn will attract more talent and investment to the region, and ultimately lead to a more diversified and complex economy. This cyclical process ensures that each success feeds the next, creating a long-term, resilient path to prosperity.

• Infrastructure for People, Not Just Projects: Economic growth isn’t just about GDP. It’s about creating a place people want to live and work. St. John’s recognizes that infrastructure extends beyond labs and co-working spaces to include the social and cultural fabric of the community. By focusing on downtowns and central areas, they are investing in the essential services and amenities that directly improve citizens’ lives. This focus on the “built environment” is a critical enabler for innovation and a powerful differentiator.

  

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• In a world of economic uncertainty, a community’s outlook and collective optimism are powerful economic drivers. A sense of hope can inspire long-term investment and civic engagement, which are hard to measure but critical for

  sustained growth. This isn’t just a feel-good exercise. It is a strategic move that attracts talent, inspires entrepreneurs, and signals a community that is on a positive trajectory.

• Create a self-sustaining, upward spiral of growth: The St. John’s strategy is designed to create a virtuous innovation cycle. By bringing a diverse group of

  stakeholders together to create a shared plan, they are fostering intentional interaction and collaboration. This will lead to the creation and transfer of new knowledge, which in turn will attract more talent and investment to the region, and ultimately lead to a more diversified and complex economy. This cyclical process ensures that each success feeds the next, creating a long-term, resilient path to prosperity.

• Collaboration as a Strategic Imperative: St. John’s success is a direct result of different actors working together to find solutions. By actively managing

  interconnectedness and encouraging different sectors to “lean on others,” a region can overcome its limitations and create a dynamic, unique economic environment. When faced with adversity, the most important step is to find partners and work together, because this partnership strategy is an engine of innovation and resilience.

• A Culture of Mutual Support: The St. John’s approach highlights a culture where “the province, communities, individuals, or companies have had to lean on others” to get through challenging times. A collaborative ethos is a powerful differentiator that can be leveraged as an economic asset. Regions can focus on fostering this culture by creating platforms and processes which facilitate interaction and trust, allowing knowledge to spill over and new ideas to form.

• A Legacy of Continued Innovation: The success of Verafin includes the legacy it leaves for the next generation of innovators. Capital generated from the acquisition can be reinvested into the ecosystem. More importantly, the experienced founders, employees, and investors from this major success story become mentors and role models, passing on their know-how and inspiring the

  next wave of startups. This creates a self-sustaining, evolving ecosystem where new knowledge is continuously created and applied, fueling a virtuous innovation cycle.

• Diversification as a Strategic Asset: St. John’s is actively promoting its strategic diversification into multiple sectors. The region has opportunities in energy, oceans industries, technology, aerospace, and defense and security. This approach aligns with the principle of economic complexity, which promotes strategies which increase the sophistication of a region’s products and services. This reduces vulnerability and fosters long-term, sustainable growth.

The idea of shifting perceptions and changing the way business is done animated much of our conversation. Done successfully, these are the shifts that lead to billions in new investment and the emergence of entirely new industries.

“The purpose of Edmonton Global is to radically transform and grow the economy of the Edmonton Region.” How the 14 regional partners manage this, from life sciences to global logistics, makes for a very interesting watch.

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From the Video. LINK Analysis: Edmonton, Alberta

• +Growth: Regional collaboration fosters an ‘addictive ecosystem’ by integrating shared infrastructure, talent, and knowledge. This creates a powerful network effect where each new investment or business success attracts others building a self-sustaining cycle of innovation.

• Leveraging Uniqueness: Edmonton’s example highlights a core tenet of regional differentiation: local characteristics are not a limitation but a catalyst for growth and diversification. By building on its underappreciated geographical advantage,

  Edmonton is creating new economic opportunities that are both authentic to its identity and globally competitive.

• Beyond Municipal Borders: A pan-municipal approach to economic development creates a regional value proposition that is far greater than the sum of its individual parts. By pooling diverse assets—talent, infrastructure, and industry—a region can achieve the ‘mass’ and ‘innovation’ sought by international investors.

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• Ecosystem Synergies: International investors don’t care about municipal boundaries; they care about a complete value proposition.Edmonton’s regional approach shows that an innovation ecosystem’s strength lies in its ability to connect disparate assets—from talent in the city to heavy industry outside. This strategic integration fuels an ‘interconnected growth’ cycle where success in one area, like research, fuels growth in others, like industry.

• Crisis as a Catalyst: The COVID-19 pandemic served as a strategic leapfrog opportunity for Edmonton. By identifying a national supply chain gap, the region was able to combine its research and manufacturing assets into a ‘high-impact initiative’ that elevated its economic complexity and created a new, vital industry.

• Integrated Strategy in Action: Edmonton’s life sciences initiative is a textbook case of a successful integrated economic development strategy. It showcases a multi-stakeholder partnership—involving provincial government, federal government, and the private sector—that mobilizes a region’s core competencies to solve a pressing national problem, demonstrating a shared vision and coordinated action.

• Affordability as a Differentiator: Edmonton’s ability to maintain housing affordability by meeting population growth with new construction positions it as a ‘sticky’ ecosystem. This focus on a high quality of life—a key differentiator—makes the region a desirable place for talented workers and entrepreneurs, boosting the innovation ecosystem.

• Closing the Talent-Innovation Loop: The Edmonton region shows that a strong talent pipeline starts with high-quality educational institutions and is completed by an affordable, vibrant community that encourages graduates to stay. This virtuous cycle ensures that local knowledge creation and transfer translates directly into economic output and progress for the region.

What makes a place unique, and how its people innovate to transform that uniqueness into economic and quality of life opportunities, really comes to light in my discussion with Michelle Simms, CEO of Advantage St. John’s.

The province today is positioned as a strategic centre for innovation, technology, the arts, and sustainable industries. It wasn’t always this way. Michelle walked me through how St. John’s and the province, Newfoundland and Labrador, built a “small but mighty” and incredibly resilient North Atlantic economic powerhouse.

It makes for a very good watch, beginning with this first 5-minute introduction.

Well-earned reputation for resilience

Canadians are familiar with aspects of Newfoundland and Labrador’s economic history, including the catastrophic collapse of the Northern cod fishery in 1992. What we and others are less knowledgeable about is the immense effort, adaptation, and economic diversification that has taken place in the province, resulting in over a billion dollars in venture capital invested into its technology sector.

Newfoundland and Labrador, and its capital region of St.John’s, Conception Bay South, and Paradise, is a case study in how a potent mix of willpower, culture, industry and geography can transform the economic trajectory and fortunes of an entire area.

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From the Video. LINK Analysis: St. John’s, Newfoundland and Labrador

Advantage St. John’s aligns multiple stakeholders toward common goals. It intensifies collaboration among government and other key actors, which is a core feature of a globally competitive innovation ecosystem. It enables the collective pursuit of new opportunities, attracting greater influxes of Foreign Direct Investment (FDI)
→ FDI: capital + new technologies and practices that enrich the local ecosystem. (See Harvard’s Atlas of Economic Complexity)

Knowledge Spillovers & Unique Capabilities: The oil and gas industry catalyzed innovation through knowledge creation and transfer. The need for creative solutions in harsh environments led to knowledge spillovers—transferring expertise to other sectors. This is a core principle of ecosystem synergies, where success in one area fuels growth in another. These specialized skills create a unique, persistent competitive advantage for St. John’s and Newfoundland and Labrador.

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The influx of a billion-plus in external capital shows that St. John’s--and Newfoundland and​ Labrador​--offer a unique value proposition where investments in local innovation ​promise ​g​ood returns​ at ​reasonable risk. This signals that the ecosystem has successfully used its existing strengths to enter or create new, complex markets. These FDI investments are an outcome of increasing levels of specialized knowledge, skills and resources: the innovation ecosystem stands out for its highly skilled talent and their high degree of specialized know-how.

Collaborative Ecosystem Fuels Diversification: The evolution from oil and gas to aerospace, defence, and ocean/marine is a prime example of strategic diversification and increasing economic complexity. A resilient economy is not just diverse, it is complex, with specialized skills and knowledge. The growth of a talent pipeline through post-secondary institutions is a critical component. By expanding their programming, they foster innovation through research, training, and partnerships with industry. This collaboration strengthens the ecosystem, reducing vulnerability to economic shocks.

Building Trust to Spur Progress: Strong relationships and mutual support point to a high degree of trust among stakeholders.Trust is a vital but often intangible component of a successful innovation ecosystem. By having a strong and unified support system, the region can more confidently pursue new ventures and strategic bets, knowing that all actors are aligned and working together to overcome challenges and drive long-term progress.

Leveraging Unique Cultural Assets: The region’s welcoming culture, resilience, and unique character are not just anecdotes—they are strategic assets. Local ​uniqueness lays the foundation for an authentic innovation ecosystem. By leveraging cultural and historical advantages, a region can create a competitive edge. The distinct identity of ​St. John’s--indeed all of Newfoundland and Labrador​--attracts talent who resonate with its ethos and lifestyle, fostering a deep sense of belonging.

What is LINK Analysis?

LINK analysis is based on a framework I put together based upon dozens of interviews with leaders from innovation ecosystems in Canada, the United States and several international locations. To the source material I added well-regarded research into local innovation ecosystems and economic development. The interviews and research are all underpinned by economic complexity thinking. The net result is LINK and a virtuous innovation cycle available to all regions, regardless of their current state of progress or emphasis on innovation ecosystems.

Innovation is vastly more than a buzzword pasted into boilerplate pitch decks or a term to nod at during weekly conference calls. It is a transformative, global force. Innovation is baked into every decision we make, individually and collectively. We all make the implicit assumption that virtually every aspect of our lives will advance in positive ways—either fundamentally or at the margins—given time and resources. This is more true now than at any time in history.

But where will that next innovation take place? Real, tooth-and-nail competition between communities, regions, and among nations is unrelenting. That competition extends into the geopolitical realm as trading blocks and alliances jostle for advantage. Someone, somewhere, will own each innovation, mining and multiplying its benefits for the surrounding area in terms of jobs, infrastructure, economic resiliency and quality of life. Where matters.

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Get in the game

Competition produces its winners and losers but, setting aside geopolitics for the moment, innovation is far from a zero-sum game. If it was, Silicon Valley would own 100% of everything, no other place would invent, create, or build anything new. In reality, every place has its own innovation ecosystem. In the context of accelerating global competition, the extent to which places invest time and energy into building their ecosystems matters disproportionately, regardless of their stage of development. This is observably true: once upon a time Silicon Valley amounted to Bill Hewlett and David Packard working out of a garage in some place called Palo Alto, not far from the little university of Stanford and their mentor and professor, Frederick Terman.

The obvious rejoinder to my argument is that the sedate pace of 1930s California isn’t the 24/7 uber-connected 2020s. Immense investments in specialized scientific, business and technical infrastructure accrued over the course of decades combine to create insurmountable advantages that only expand as specialized know-how, fuelled by vast sums of capital and network effects, rapidly produce successive waves of innovation, creating an irresistible vortex pulling in the best of the best from every other place.

There’s no catching Silicon Valley goes this line of thinking, and the case is strong. But again, we’re not in a zero-sum game. Paris, London-Cambridge, Seoul, Tel Aviv, and Toronto-Waterloo are growing epicentres in their own right. China, more adversarial today than it’s been for decades, has in Beijing and Shanghai its own major pieces on the board.

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The point is that winning is possible. It can be done, it is being done. There are tools at our disposal, locally, to harness social, demographic, and technological change to our benefit, to claim a share of future innovations as our own with all of the ensuing regional economic benefits.

Which brings me to the video and my interview with Bob Tresize, President and CEO of Lansing Economic Area Partnership (LEAP).

Lansing Economic Area Partnership (LEAP)

Bob was very generous with his time and provided great insight. The following quote is so good, in my opinion, that I’m worried I buried the lede:

We each get a 20 to 25 year window to make a difference as individuals and as organizations. And I always believe it's really important to understand that moment in time that you are in. It is unique and you have to understand your place and space as a community and the personalities and people that are happening within that framework of you, of who you are.

Bob Tresize, President & CEO of Lansing Economic Area Partnership (LEAP)

It’s all right there. An understanding of time, place, context, and action.

While Part One is more of a “get to know,” you’ll quickly hear some of what makes Lansing distinct and from where many of its advantages stem. For insiders, the historical shift in economic development priorities over the course of time will be familiar. But the underlying idea that those shifts are driven by local adaptation to common outside forces of change is, to me, fascinating and serves to make the point that local uniqueness is a competitive force in its own right, and one capable of harnessing external forces to local advantage.

That leads to into to Part Two—publishing next week—where we get into more of the specifics of the Lansing’s innovation ecosystem engine, and what makes it tick.

On that note, I hope you like the video, and please feel free to reach out with your thoughts and suggestions.

The Stuff of Leaders

I have undying respect for entrepreneurs. I don’t care if it’s a business serving millions or a hole-in-the-wall specialty shop, to be honest. The act of self-starting, making a buck on one’s own: this is the stuff of leaders. These are the driven people for whom the status quo won’t do, many of them pursuing breakthroughs which benefit us all.

Proto-entrepreneurs: We Don’t Credit Them Enough

What really strikes me these days, though, given the work I do, is that before the entrepreneur opens for business and powers up for the first time, others have already been there. Proto-entrepreneurs. The ones who created the playing field—the ecosystem—within which future startups evolve and emerge. Solutions aren’t found, jobs aren’t created, innovation remains imagination—all that potential remains untapped until the work of the proto-entrepreneur is done.

While I exaggerate to make the point—of course there are entrepreneurs who thrive despite the absence of structure and support, and of course ecosystems themselves are ever-evolving entities—the more complex and fast-moving life gets, the more today’s innovators and entrepreneurs need well-planned, strategic infrastructure to maximize their chances.

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That is what I find so compelling about The Groundbreakers. It is endlessly fascinating to understand how places capitalize on their advantages while adapting and responding to change. Creating the playing field—fostering the ecosystems and communities where people want to work, where businesses want to locate, and where opportunity and progress produce hope and quality of life—is an entrepreneurial variant we can’t credit enough.

Communication Breakdown

Interviewing these proto-entrepreneurial leaders is a privilege, an educational front-row seat. And the results have been pretty special. But over the course of all of these interviews I kept coming back to some real problems. The first is that when people are so gracious with their time it is important to make the most of what they’ve said. Learning styles differ, but for me now—at my stage of life and the way I think—I’m preoccupied with not missing anything. Here I am sitting on all this stuff feeling like there’s a goldmine of material to learn from and share if only I could extract it properly. Problem!

That leads directly to a second problem. My original intention was to write long-form analytical pieces in which I drew readers’ attention to what makes each city unique and why, while outlining broader lessons from which we could all learn. The premise upon which this was based was pretty simple: the world is changing extremely rapidly with major economic and social consequences. With the world progressively more Apple-ized, Google-lified, and X-formed by the day, how do small and mid-sized cities and regions around the world compete? How do they retain their talent? Attract new people? In an era of front page, hundred-billion dollar AI infrastructure investments, what are the rest of us supposed to do? Big questions, important questions, yet ones that seemed at times to defy my capacity to properly represent. The result was articles I personally love and believe contain good content, but which I toiled over for too long while worrying I wasn't adequately representing the insights and enthusiasm of the interviewees.

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Make Something Easy From Something Hard

The answer to these problems?

1. Mine the full innovation and economic development interview collection, structuring the information aided primarily by two sources of tertiary research. One is a repository of leading academic research papers examining regional economic development and innovation; the other is research based on economic complexity. The end result is an analytical framework I’ve termed “LINK.” The acronym is derived from Local Innovation and Knowledge, key elements of the virtuous innovation cycle available to any community in any place regardless of their size, scale, or stage of economic development. LINK is intended to put some structure and context around a place’s specific economic and innovation efforts so that we can see what works and what doesn’t, why, and what actions to take.

   

2. Video. Ignoring the obvious is a smart way to miss the moment, and I think it's impossible to ignore that video is the fastest, easiest way to reach people and an ideal way to impart short, useful information. To that end I’ve shifted the orientation of my work toward a video-first workflow. In the short term the shift stopped me completely. It meant learning the software (DaVinci Resolve for those interested), surrendering to the idea that I’m new to it and won’t be perfect, either on-screen (look at the camera! look at the camera!) or in editing and design.

No Time Like the Present

I put both video and structured data to work in the most recent set of interviews, which I’ll begin publishing this Monday. The initial plan for video is to keep it super simple: publish to Substack one or two 5-minute videos based upon 20-minute, one-on-one remote interviews. Promote them with 30-second shorts posted to X and LinkedIn.

Later, assuming all goes well, I’ll launch a YouTube channel so that there's an easy way to find collections of The Groundbreakers videos.

The first of the videos, in your inbox Monday, is an interview with Bob Tresize, President & CEO of Lansing Economic Area Partnership (LEAP). We covered important ground and I really enjoyed the direction of the conversation, including this:

“We each get a 20-to-25 year window to make a difference as individuals and as organizations. And I always believe it's really important to understand that moment in time that you are in. It is unique and you have to understand your place and space as a community and the personalities and people that are happening within that framework of you, of who you are.”

— Bob Tresize, President & CEO of Lansing Economic Area Partnership (LEAP)

See you all Monday.

Even if tariffs went to zero tomorrow, enough shocks have been introduced into financial markets and nations’ political calculus to redraw the global map of trade alliances and fundamentally alter economic strategies.

The issue for cities and regions everywhere is that the scale of the economic shock is beyond influence, creating risks and opening vulnerabilities requiring immediate attention.

Fortunately, local leaders are maneuvering to build greater create economic resilience, of which an increasing part is the local innovation ecosystem.

I’ve lucky enough to spend my time speaking with local leaders about innovation ecosystems. Without question, inventiveness and ingenuity evolves everywhere, adapted to local conditions and offering hope to not only survive but thrive under challenging conditions.

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With innovative new ideas and strategies emerging all the time, many of which can be readily adapted by other places, there are opportunities to help make one another’s economies more resilient. And the stronger we are, the more business and opportunity there is no matter where you are on the map.

That’s the purpose of this video: to spark idea sharing at the local level. Spend a bit being interviewed by me, sharing the challenges you’re facing and what you’re doing about it, and I’ll turn our chat into short 3-5 minute videos that just might yield new connections, unlock new ideas and solve problems others are facing.

Liberation Day: highest stakes economic gamble in history

President Donald Trump called it one of the most important days in U.S. history, declaring a new economic world order with America and a revitalized manufacturing sector as its beating heart. But is this multi-trillion dollar, all-in bet on the mark? Can tariffs exceeding Smoot-Hawley trigger a manufacturing renaissance? Will there be a positive knock-on effect, reducing interest rates, making it easier to tame $36.1 trillion in debt?

The immediate response was predictable. Sticker shock. Mockery at how the tariff rates were calculated—and who was targeted. Markets delivered the “largest two-day wipeout of shareholder value on record.”

Trump’s charts have let loose the dogs of economic war. China quickly matched their 34% tariff; new pacts and alliances are forming on the fly. In the coming weeks and months, national counter-measures will be deployed, markets will assess the merits of each case, and capital will flow accordingly. Make-or-break investment decisions will confound firms from Cupertino to Copenhagen. Citizens will use their wallets and the ballot box to make their sentiments known.

What is unfolding is a high-stakes global referendum between blanket-tariff unilateralism and freer-trade multilateralism. With reputations and economies at stake, who really holds all the cards?

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Build it here: the underlying ideas worth understanding

The Liberation Day brand caught on immediately. Belief in its meaning did not: blocking opportunity in the name of freedom feels innately wrong. When goods cost more and with less money to go around, people are inarguably less free than they were before. Businesses are less free when higher costs slash profits; workers are less free when losses precipitate unemployment. For these straightforward reasons, blanket tariffs are rarely the ideal weapon of choice, despite legitimate geopolitical concerns.

—Signalling Confidence, National Security, and Strategic Advantage

That’s why the Trump administration’s declaration of economic independence signals such strong confidence in American economic inventiveness and might. Across-the-board tariffing is not only viable, goes their thinking, it anchors a game-changing America-first economic model with repatriated manufacturing situated at the epicentre. It replaces and weakens its main strategic adversary, China, along with dozens of other countries, including Canada and, uh, the E.U. Stay the course long enough, continues the reasoning, and new plant and equipment will inevitably spring up across the United States. American ingenuity, scale, and a massive head start in AI-related infrastructure will erase strategic weakness, and American manufacturing will be great again.

—4D Chess? Tariffs and Debt Reduction

Trump has intentionally injected uncertainty into the stock market, according to a provocative theory that pairs tariffs with debt reduction. Forcing liquidity out of stocks and into bonds lowers bond yields, making it less expensive for the government to pay down its debt. Add to it the spending reductions wrought by DOGE and you’ve got a leaner, less expensive U.S. government fuelled by a reinvigorated, colossal manufacturing sector.

—Globalization of Manufacturing Hasn’t Fulfilled Every Promise

Feeding into the bring-it-home sentiment is the accumulated resentment of decades in which entire categories of manufacturing—textiles is a common example—have evaporated from the U.S.A., Canada, and Europe, replaced by low-cost alternatives in places like China, Vietnam, and Bangladesh.

We have been ripped off for decades by nearly every country on Earth, and we will not let that happen any longer. President Donald Trump

Further, one of assumed benefits of globalized manufacturing was that rising incomes and exposure to the democratic freedoms of the West would trigger the same desires in China, with a liberalizing effect. Instead, the opposite happened. China’s state capitalism model has given rise to a manufacturing and military Goliath, with less freedom for its citizens, not more.

It is an absolutely legitimate desire to repatriate manufacturing, and to rethink aspects of global trade. These include strategically important technologies, national security, and long term employment—what work will people do and how do we build those industries?

But none of these things are best solved with tariffs. The debt reduction theory flies in the face of economic reality. The legitimate challenges America faces didn’t have to result in breaking alliances and pushing otherwise friendly nations into the embrace of adversaries.

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Uncomfortable Truths and Disconfirming Facts

Tariffs are a tax: The tariff on an imported good is paid by the importer, e.g., Home Depot. Home Depot pays the tariff fee to the U.S. government. Home Depot’s costs go up by the tariff amount. Tariff costs are almost always passed along to consumers.

Economic warning signs: Across-the-board tariffs raise the price of nearly everything. The effect is inflationary. When things cost more, people and businesses buy less. When they buy less manufacturers cut back on production. Less production means lower demand for labour, leading to unemployment. Consumer confidence is very low: the Expectations Index sits at 65.2—the lowest in 12 years—and well below the 80 threshold where recession worries begin to crystallize. Stagflation—high inflation, stagnant economic growth, and rising unemployment—can’t be ruled out.

New trading blocks are emerging in real time: Nations are free to pursue their own interests. If there are economic, intellectual, strategic reasons for teaming up, they’ll do it: there are no guarantees that foreign companies will build plants in the States. Some manufacturers might leave the U.S. if (1) imported inputs make US-based production too expensive, and (2) countries offer compelling financial incentives.

Retooling takes time: Too many people see manufacturing in simplistic terms. It simply isn’t plausible to retool the entire automotive supply chain within the United States without countless billions in cost and years in construction. Money that could have been invested in next-generation technologies instead gets diverted into switching costs, all while needlessly expensive vehicles cause sales to sag. And if the uncertainty is intentional, indefinite delay on major investment decisions will result.

If it ain’t broke, don’t fix it. The U.S.A. is already an advanced manufacturing leader. Aerospace. Biotech and pharma. Semiconductors. Robotics and automation. Name an advanced manufacturing category and America is already ahead or neck and neck with China. That suggests doing more of what they’re doing now, i.e., what has led to the U.S.A. leading in such vital industries, and how can that advantage be maximized?

And now for the really bad news

—Part 1

Global trade in 2025 is not the global trade of 1985. Services constitute an enormous amount of trade based on intangibles like intellectual property and digital services. Harvard’s Ricardo Hausmann estimates the U.S. runs a trillion dollar annual surplus in services. When American foreign operations are included (Apple operates in 43 countries and sells in 150) the U.S.A. collectively holds as much as $16.4 trillion in overseas assets.

The fundamental flaw in Trump’s strategy is that it focuses on the trade deficit in goods while overlooking the much larger role that services, intellectual property, and investment play in the global economy. Professor Ricardo Hausmann of Harvard Kennedy School and Director of the Harvard Growth Lab.

This is very bad news for several reasons:

• Trump’s claim that the U.S. is being ripped off completely omits services from the calculus. He has left $16.4 trillion in overseas assets exposed to retaliation, assets that can in no way be repatriated.

• The retaliatory tariffs Trump brandished at the White House appear to be based on trade deficit calculations, not published tariff schedules, meaning…

• …If the U.S. abandons the rules-based order that has made it the world’s economic superpower, e.g., Google, Apple, Microsoft etc. then other nations have every incentive to do the same. The costs to American firms could be immense.

—Part 2

Trump has repeatedly said that tariffs will generate hundreds of billions in revenue used in part to fund income tax reductions. (While failing to mention that the ‘revenue’ is a tax on American businesses and consumers). The concept envisions rebuilding American manufacturing while keeping costs low.

What is not mentioned is government investment. The lead America holds in fields like robotics, automation, biotech, aerospace, and pharma is directly connected to cutting-edge research and development conducted and funded by government agencies like NASA, NIH (National Institutes of Health), NSF (National Science Foundation), and the SBA (Small Business Association).

And therein lies a massive problem. If the idea is to be the world’s manufacturing superpower, the engine must match the ambition. America’s USP—its unique selling proposition—is based on inventiveness and competitive spirit. But when research funds are cut, future discoveries and breakthroughs never happen. When tech transfer from universities to startups is curtailed, the historic American innovation advantage starts evaporating. Trump’s higher cost, reduced-investment environment creates incentives for former partners to exclude the U.S. from productive new alliances, closing the competitive gap. It’s a deeply harmful own goal.

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—Eyes on the prize

The sad thing is that no one wants this. More high-skilled jobs and fewer Walmart greeters is in everyone’s interest. Would it not be more beneficial to deepen economic ties with allies and get to the win faster? And, if China is indeed a political and military threat, wouldn’t a more targeted tariff strategy strengthened by strong, partnership-based economic unions be the smarter play?

Winning in 2025 is different than winning in 1985

Here is a basic formulation: more ideas → more output → more people → more ideas. You can see the scaffolding of an innovative economy within it, producing wave after wave of more and more sophisticated goods and services. It neatly explains advanced economies’ success once you see that new ideas need to come from somewhere—like leading-edge university research—and that output results from a series of stages including technology transfer, and starting and scaling new ventures.

The formulation is the DNA of competition, the basis upon which every game is won, from geopolitics to small business.

What people miss—what Donald Trump certainly seems to have missed—is the dramatic shift in the nature of modern competition. Everything is more complicated, interconnected and specialized, with AI increasing the pace and payoff by orders of magnitude. Labs require specialized infrastructure. Research teams need compute. Startups need data and sufficient capital to adapt. They all exist within city and regional ecosystems where local business, government, academia team up to create conditions where innovation thrives. Nations form trade agreements because they bring complimentary skills and resources to the table. The shift is from one to many, with each member playing a specialized role.

Liberation Day won’t lead to economic independence. You want freedom and independence? Invest in people. Create the conditions for innovation to thrive. Build the infrastructure, attract the talent, eliminate the barriers.

Show leadership.

If you want to do something uplifting, spend time chatting with innovation-focused community builders. I come away inspired after every interview.

To date, I have used those interviews to produce long-form community profiles, doing my best to capture something of the character of each place and its people. It’s my way of getting at what makes innovation ecosystems critical in a digitally transformed world. It’s a format I love and will continue to produce.

I am equally interested in other formats. This quick 12-question, 3-minute survey is designed to uncover what subscribers and readers would like to read, watch or hear.

Section 1 - Format

How likely are you to engage with the following content types on The Groundbreakers?

Section 2 - What interests you?

Which of the following elements would make you more likely to engage with TGB content?

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In this audio version of the original article, hear what Economic Development Lethbridge (EDL) is doing to create a distinct innovation ecosystem attractive to citizens, innovators, partners, and its regional network.

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Affordances: a Way to Think About Change

We wouldn’t be human if we didn’t have contradictory reactions to the same things. Our response to change is a perfect example. We’re tempted to wash it away with anodyne sayings like “change is the only constant.” Yet we’re uniquely adapted to change. We possess agency: when the game changes we intuitively know what to do.

The concept of affordances1 offers interesting insight into our psychological adaptation to change. Affordances refers to how we stand to gain or lose from interactions with our environment. This might sound like an unhelpful abstraction but consider: a house affords shelter. A lab affords research. A startup affords jobs. When affordances ‘collect’ in places, a productive niche in the ecosystem may form.

Smartphones provide awareness of how affordances vary regionally and globally. This leads to a form of socioeconomic arbitrage with transportation networks affording people the mobility to move where they can make the most of their skills, advantaging some areas while disadvantaging others. This situation creates an imperative: every region and every city must act decisively or risk increasing the mobility effect.

People who create affordances for others – including those who successfully innovate – strengthen the social structures of which they are part, often emerging as leaders. At the community level and beyond, skillfully combining affordances like research and commercialization infrastructure creates the conditions for a culture of innovation2 to take root and thrive. With the global information playing field level enough to reveal just how dramatically affordances vary, the fate of regions resides with decisions and actions leaders take today. What is the “right” set of affordances that convinces people to come, to stay, and to build?

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Necessity is the Mother of Invention

Knowing is one thing, doing is another. Of Canada, Alain Francq, the Director of Innovation for Conference Board of Canada, recently said, “We have a dire need for transformative intervention across multiple facets of the economy – technology, industry, culture, government – to improve our innovation performance.” His observation aligns with the viewpoint that, strategically, Canada hasn’t yet successfully implemented knowledge-based economy policies – evidenced by low IP ownership – and is thus losing ground internationally. When a structural mismatch of affordances occurs companies leave and potential knowledge-based startups fail to form. Other places pull ahead.

At the regional and local level, the story is very often much more hopeful, including places where the imperative to shift from an industrial to knowledge-economy footing is paramount. Hamilton, Ontario, known for decades as Steeltown, earned a labour intensive, heavy-manufacturing reputation centred around giants Stelco and Dofasco. The collapse of the steel era could have led to disaster, the disjuncture between what affordances the city possessed and what was needed so profound that recovery proved impossible.

But that isn’t what happened. Instead, Hamilton’s leadership sparked an economic reinvention, relying in large measure on their close relationship with McMaster University. A robust multi-sector innovation ecosystem now sits an hour west of Toronto including life sciences, advanced manufacturing, automotive, and ICT.

Fusion Pharmaceuticals is a prime example. A radiopharmaceutical company led by McMaster professor John Valliant, Fusion was acquired in March for $2.4 billion USD. Fusion’s targeting molecules emit alpha medical isotopes to “precisely and effectively induce cancer cell death.” Incubated and supported by McMaster, Fusion significantly elevates Hamilton’s reputation for biomedicine, pharmaceutical, and nuclear medicine excellence.

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Economic Transformation: Making Change a Good Thing

Compressing a city’s economic transformation into a few paragraphs runs the obvious risk of over-simplification. New infrastructure affording new economic pathways takes time. Change doesn’t happen overnight, nor does it satisfy everyone. Steelworkers don’t just become coders; people struggle when shifts of the magnitude Hamilton endured occur. That truth is an essential part of what makes the Hamilton-McMaster fulcrum worth understanding because the reality is that the menu of affordances Hamilton must provide its citizens has been radically rewritten. People with skills they can’t use will leave; people wrong-footed by a changed world need help. Innovation, both social and economic, is therefore a critical component of the city’s strategic economic development plan, harnessing change along with McMaster to found a knowledge-based, diversified, and resilient economy.

Redefining The Art of the Possible

Dr. Darren Lawless is Associate Vice-President, Research Innovation Partnerships at McMaster. His challenge is fascinating: demonstrate the art of the possible. “We all have to change, and McMaster can help. The way we change is by forming partnerships, and showing the art of the possible.”

When the city shared with McMaster its strategic goals and objectives, including expanding its emphasis on life sciences and advanced manufacturing, it logically built upon McMaster’s existing applied research strengths. “We can help in those areas,” says Darren. “We have an amazing ecosystem of researchers.” Other interests shared between the partners include information communication technology, transportation (air, marine, rail and road), and music.

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“Stacking” Affordances

Forward-looking government-university partnerships are crucial for economic reinvention, with innovation ecosystems forming the backbone. But the “stack" of affordances cities must accumulate in order for their economies to spark waves of successively more complex products – the hallmark of thriving innovation ecosystems – demands robust private sector participation. Bridging the academia-business gap is unquestionably a major challenge. But the Fusion acquisition and yesterday’s announcement that the Canadian Pandemic Preparedness Hub 3(CP₂H) will have access to funding of up to $169 million 4 suggests abundant expertise, scale and opportunity.

McMaster targets private sector partnerships, its research centres making clear their interest in solving research problems impeding industry growth, and driving innovation. The foundation of their private sector appeal lies in the promising intersection between applied research and commercialization; the university’s research infrastructure expanding and accelerating the frontier of discovery while reducing risk.

MMRI

McMaster Manufacturing Research Institute’s May 2nd, 2024 open house makes for a good example of a university-led event bringing together ecosystem players in pursuit of innovation, jobs, and regional competitive advantage. The open house featured technical solutions designed by McMaster researchers and students5, dozens of area manufacturers, and public sector ecosystem groups, including NGen, Ontario Centre of Innovation, and Southern Ontario Network for Advanced Manufacturing (SONAMI), of which MMRI is a member.

MARC

McMaster Automotive Resource Centre (MARC) is a useful example of a hub and spoke partnership model that creates a productive 2-way street for multiple automotive companies. The Centre’s breadth of electrified vehicle research, scale of operations, and ability to push the boundaries of innovation via interdisciplinary work makes for a compelling package, explaining why competitors have come to build a shared R&D resource into their respective businesses. Working with MARC – relationships include GM, Stellantis and Honda – offers more than one form of strategic benefit. Resource sharing reduces R&D costs and shortens research timelines, and there are multiple technology acquisition paths for promising innovations. MARC’s startup program supports researchers and entrepreneurs entering the market with their own offerings.

Trust, Communicate, Experiment, Share Risk, and Act

But all of this doesn’t answer a fundamental question: how does it all work? Underpinning McMaster’s civic and corporate partnership strategy is an open and personal philosophy, reflecting the culture of a university intent on being of service. For Darren Lawless, this philosophy is enacted in five clear ways: trust, communicate, experiment, share risk, and act. This result is simultaneously practical – advancing known municipal, business, community and university interests – while setting the stage for the unexpected. 

By definition the unexpected defies prediction. But when we want to precipitate the unexpected — say a chance meeting of keen minds leading to a breakthrough — we are certainly capable of supplying the right mix of ingredients. “Serendipity is something that I think we can help create within the innovation ecosystem, which I'm passionate about,” says Darren. “We’re running a lot of networking events, which is a key role for McMaster. You should go talk to them! He's right over there, she's right over there. All of a sudden, the conditions for serendipity arise and new opportunities are created by meeting and talking with people.”

It seems slightly contradictory that part of dealing with the complexity of modern innovation includes intentional doses of randomness in search of serendipity. But less and less can great minds go it alone. They need the place, the infrastructure, the team, the support — and the ensuing collision of ideas where the magic of innovation so often now lies. “The world is very complex, so you have to have an open mind. You have to experiment, you have to pilot,” Darren says. “And you have to be honest: if something doesn't work you stop. But instead of looking at failure and success as a zero and a one, let's try and understand why it doesn't work, because maybe you're close. Maybe there's a better way.” 

Innovation ecosystems like Hamilton’s afford ideas, the currency of the knowledge economy. Partnered with McMaster, the city’s innovation infrastructure affords it the opportunity to pursue transformational economic leadership, powered by locally developed solutions to complex, global challenges.

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How do all the places on Earth that aren't Silicon Valley respond to global competition, digital transformation, and economic complexity?

How do those cities and towns compete? How do they collaborate? How do they move themselves forward in an increasingly competitive and time-compressed world?

Innovation ecosystems are what The Groundbreakers is all about: Modern innovation, worldwide, with all its variation, intensity, and complexity.

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Hear about Malawi’s plans to transition its economy over the coming decades, and MUST’s role within these plans, including its nascent innovation ecosystem.

This podcast is the audio version of a post you can read here.

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The next step, a potential game changer, is well underway: construction of the university’s much-anticipated laboratory complex and industrial park. The park’s manufacturing-research mix follows a familiar innovation ecosystem playbook, co-mingling scaling companies and startups with university researchers, students and entrepreneurs from across the region. The inclusion of resources like maker spaces and coaching improves everyone’s odds.

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But this industrial park is different.

It’s different because the stakes couldn’t be higher. Malawi’s economy remains over-reliant on agriculture: the structural transition away from farming toward manufacturing and industrialization remains a protracted work in progress. By GDP measures, the country ranks among the 10 lowest per-capita incomes in the world. Other concerning socioeconomic indicators are easy to find.

But this post is not about reciting alarming statistics. It’s about the vast potential standing to be unleashed if fundamental shifts in national policy take flight at the local level, where the course of the country’s prospects — and those of its 20 million citizens — stand to radically improve. That story hinges upon what happens at MUST where, like everywhere else in the world, science and technology promise to upend the status quo.

Tackling the status quo is deeply connected to strategy and the creativity successful implementation demands, topics with which James Mphande, MUST’s Communications Manager, is clearly well-versed. In conversation about the university’s importance to the country, he consistently emphasizes the importance of connecting Malawi 2063 (MW2063) and its three pillars — agricultural productivity and commercialization, industrialization, and urbanization — to MUST’s ability to reliably deliver innovative solutions. James, an adept innovator in his own right, is ideally situated to narrate the university’s journey.

A unique story matched by a unique location.

Telling MUST’s story is inextricably linked to its location, and Malawi’s remarkable geography. Land-locked over 600 kilometres from the nearest seaport, it is tucked away in Africa’s southeast, bordering Zambia (west) and Tanzania (north and east). To the south, Mozambique wraps the country on all sides. Narrow and long, Malawi’s contours are geographically derived from the Great Rift Valley and Lake Malawi1.

MUST is about as far south within the country as one can get, a five hour drive down from capital Lilongwe, 45 minutes southeast of the nation’s commercial center, Blantyre, and nestled amidst a sea of tea estates. Created by an Act of Parliament in 2012, the location of the country’s fourth public university establishes a national presence—important for national cohesion—and demonstrates governmental commitment to solve endemic Southern Region economic and agricultural issues.

Ambitious Plans Need Practical, Strategic Solutions

Malawi 2063 calls for the nation to be an “inclusively wealthy and self-reliant industrialized upper-middle-income country by 2063.” Realizing these plans is to place prosperity and hope into the hands of 20 million Malawians, while providing direction and leadership to nations facing similar conditions.

We are coming up with programs that promote the national vision. Malawi is aiming at substituting imports so that we produce locally and export. We want to create industries where people produce things locally and reduce the weight of imports.

James Mphande, Malawi University of Science and Technology

It’s invitingly ambitious. Getting there will take some doing: in national development terms, 2063 is right around the corner.

Among the economic challenges, three stand out. Each links MUST’s research and innovation initiatives into the larger national picture, while making Malawi itself a fascinating case study of a nation making a thoughtful, determined leap to a knowledge-based economy.

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Challenge One: Farming and Agriculture

Entrenched social, technological, and environmental barriers mean farmers often can’t maximize yield, nor can they sell their products efficiently, leading to higher prices and fewer people being fed. Local milk production averages 5 litres per day per cow; 15 litres is achievable in the region. Tripling milk production—and successfully getting it to market—carries profound health and economic promise.

Malawi is replete with similar examples. James explains that consumer prices on domestic goods go up when “Every day we are rationing power. For producers, if you want to produce the better part of the day, you have to use alternative power.”2

The complexity of the solutions required — which extend beyond individual technical projects into national socioeconomic challenges — mandate that MUST staff, students and academics cultivate not only a wide spectrum of technical, technological, and research specializations, but robust economic skills in design, manufacturing and market development. The scale of the country’s needs creates urgency to integrate the university’s research and economic development infrastructure into a knowledge-generation platform of sorts; a place capable of supplying an ever-expanding pipeline of homegrown solutions to the country’s barriers.

Amongst the issues, agriculture is perhaps the most pressing, dominated by the sheer scale of Malawi’s reliance on manual labour. The consequences extends beyond the economic. Farms and families — women do most of the maize and groundnuts shelling — can become marooned inside the grind of manual agriculture, with generational knock-on effects.

MUST targets the problem at all levels, declaring on their site the aim to “promote development, adaptation, transfer and application of science, technology and innovation.” Researchers take this approach to the field3, assisting local innovators on micro-economic projects while tackling the larger macro-economic work demanded by MW2063.

The link between local and national, micro and macro, is unmistakable. At MUST, the Institute of Industrial Research and Innovation (MIIRI) and the Community Innovation Programme (CIP) are aimed squarely at societal issues. Amongst them: reducing dependence on manual labour, increasing productivity, and curbing spoilage. Examples include a groundnut and maize sheller,a poultry incubator monitoring app, and fortified maize flour production. Each is a potential difference maker to communities across the country.

What’s happening at MUST, however, is far from limited to product fixes for immediate problems, nor is it constrained to extending these solutions to the national scale. Including MIIRI, MUST is building an expansive, foundational agricultural research,4 technology, and commercialization base tailored to Malawi’s specific needs. This is apparent by examining an impressive range of projects, while considering the socioeconomic implications of building solutions domestically:

• Food systems transformation research;

• Irrigation: remote-control solar-powered system to detect soil and crop conditions and guide precise irrigation;

• Design of an agricultural spraying drone;

• E-commerce platform for agri-commodities;

• GPS Planter: A fully automated seed planter for cereal and legume seeds, controlled by Global Positioning System.

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What’s happening is that two inputs — an expanding range of solutions to local challenges and the university’s ever-growing collective scientific and technological expertise — are synthesizing into a wellspring of specialized knowhow. As more people are trained with this specialized knowhow, more projects can be tackled while also expanding the range and complexity of new projects.

MUST has been planning for this, as their vision makes clear:

Specialized knowhow is the essential ingredient needed to make more and more complex products; the secret sauce that transitions an economy from manual and agricultural to automated and knowledge-based.

But it stands to reason that while possessing specialized knowhow is one thing, designing spaces to make the most of it — to plan for ever-expanding, sustained growth of that specialized knowhow — is another.

Enter the industrial park, the place where researchers, entrepreneurs, students, and community members come together to put that specialized knowhow to work, using labs, maker spaces, coaching, and industrial capacity to found new businesses, attract new partners, and open new avenues of enquiry. What’s particularly exciting is seeing the strategy in action: vital research, talented people, and infrastructure are coalescing around a base of specialized knowhow, maximizing the chances of MUST emerging as an innovation engine of national importance.

Challenge Two: Make More Complex Products

Creating more knowhow is the fundamental ingredient of economic development. This much is obvious. The more knowhow and the more varied the knowhow, the more complex products a place can make.

How one creates more knowhow is immediately complicated. Every country’s ability to grow its economy depends on its ability to produce successively more complex products. Kazakhstan imports smartphones because it lacks the knowhow and infrastructure to build and sell its own; thinking about what it would take for the Kazakhs to found a smartphone industry is to confront the problem faced by every nation, no matter its stage of economic development.

Malawi intends to be a “wealthy and self-reliant industrialized upper-middle-income country by 2063.” This mandates focusing on expanding the range and complexity of its products, a path usually resulting in higher wages, economic growth and social stability: this is Malawi University of Science and Technology’s raison d’etre.

Slow and Steady Wins the Race?

Without getting too deep into the weeds there is a conservative, logical, incremental way for economies to produce more complex products: examine what you do well today and jump to close or adjacent industries where existing skills and infrastructure may be leveraged. Jumps of this nature are therefore governed by connectedness: the extent to which existing knowhow and resources can used as the basis for strategic moves into related, but more complex, sets of products.

Some of MUST’s work falls into this camp, working with existing community strengths and knowhow in agricultural equipment falls into this category.

Limiting investment to conservative, incremental gains in product complexity in a world increasingly governed by knowledge economy principles leads to a potential irony. As the pace and shape of Malawi’s economic development is heavily influenced by implacable global forces (anything from trade wars to digital transformation) demand for entire categories of products could simply dry up, or domestic production become uncompetitive. An entirely conservative approach may, ironically, increase economic risk.

Further, absent support, Malawians with emerging skills in ICT, for example, may seek opportunities abroad. An exodus of talent is the last thing the country needs.

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Challenge Three: Founding a Knowledge-Based Economy

Inarguably, automation is overwhelmingly important. Throughout the agriculture value chain, from crop science to irrigation, harvesting, food preservation and commercialization, added productivity offers life-changing benefits for farmers and consumers. Malawi’s ascension into an industrialized upper-middle-income country by 2063 is intrinsically linked to smart, strategic moves into more and more complex agricultural industry products.

MUST is laser focused on maximizing student potential, and propagating its specialized knowhow. James explains that, in addition to the academic curriculum, “What we are doing is promoting technology innovation. Our students are expected to put deliberate efforts into innovation. We have competitions; we encourage them to join innovation competitions, and so far we have won several awards. We are also making it mandatory in terms of entrepreneurship. Irrespective of one's program of study, there is always a module on entrepreneurship. Apart from that, no student graduates from MUST without undergoing industrial attachment related to the area of their study.”

Agtech. Made in Malawi.

The game-changer could prove to be agricultural technology (agtech). In many ways, it is the ideal complement to conservative, incremental gains in product complexity; a strategic bet in an area of vital need, where the seeds of specialized knowhow have already been planted.

Hardware and software agtech applications are needed throughout the entire agricultural value chain. It is as true in Malawi as anywhere that tech-enabled automation kicks off invaluable data, crucial for next-generation irrigation, planting, harvesting, food preservation, and commercialization inventions.

At MUST, specialized farming and agriculture knowhow is already present. Presaged by the individual projects already mentioned, a strategic move into agtech is entirely plausible. Advanced automation, Internet of Things sensors, and analytics powered by (increasingly) AI-enabled software could form the backbone and connective tissue of a powerful Made In Malawi agtech sector. Competitive advantages for the sector include solving the unique challenges of Malawian agriculture, the odds of which MUST is increasing by clustering in the industrial park.

It really is an inviting future. Getting there won’t be easy. But it is deeply exciting to contemplate a realistic future in which MUST scientists and engineers — gathered with founders, students, and community members — gaze out from industrial park building windows to see the fruits of their labour: fields, farms and tech extending from the university to the Mulanjie.

Part 2: With a clear strategy in place and supporting infrastructure under construction, Malawi University of Science and Technology is on course. Establishing domestic industries and thus reducing the reliance on imports requires cultivating markets for products, creating trust, and extending partner networks. These are among the challenges and opportunities ahead, discussed in the next MUST article.

Innovation Ecosystem Survey

Leaders obsess over making things better. Better jobs, and more of them. Better products, better services. Better quality of life.

Easy to say, hard to do.

Doing depends on making decisions. Via bold strategic manoeuvres or "great things are done by a series of small deeds,” decisions in pursuit of making organizations better depend on finding meaning from the data: information is currency.

This is so true in a digitally transformed world—given the sheer scale and complexity of even the things we take for granted—that every institution, every company, and every place must become obsessed with how to produce more information, particularly new information. No individual organization—no single place—produces enough new information to independently survive.

If you believe that’s an overstatement, if you think OpenAI, for example, independently produces enough new information to thrive indefinitely, think again. From where does it hire new engineers? Where does it get venture funding? Even its earliest hires were recommended by outside advisors. These inputs are external to OpenAI; they all come from the surrounding innovation ecosystem. OpenAI’s dependence upon the surrounding ecosystem is instructive: if it’s true for them, it’s true for you.

City, university, startup, established firm: there isn’t an organization or jurisdiction on earth unaffected by the reality of its dependence upon the surrounding innovation ecosystem. Your fortunes are inextricably linked to the health of your ecosystem and your ability to contribute to it and rely upon it.

But this raises a problem.

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A List of Ingredients Is Not a Recipe

Today, we don’t fully know how or why innovation ecosystems work. Not with so many actors, so many components, so many inputs and interdependencies.

This places us at a crossroads: Which critical components are needed to future proof the economy? Which relationships matter? If new information is vital for the long term health and viability of a place and its actors, how do we attract and retain the talent that produces this information? Given innovation ecosystems are all different and our roles within them differ, what does that mean in decision-making terms?

What should leaders prioritize?

Houston, We Have a Gap

We need the know-how to keep up.

We need to create the conditions for know-how to emerge.

How to do this is less clear: we have an information gap.

Innovation Ecosystem Survey

Who Is the Survey For?

The Groundbreakers survey is intended to fill that gap with useful guidance for the following groups:

• Higher Education

• Government: Municipal, Regional and National

• Economic Development Organizations and Chambers of Commerce

• Innovation and Development Organizations, e.g. Startup Communities, Public Sector Organizations, Research Parks.

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What’s In It For You?

Leaders from any of the sectors mentioned should find actionable takeaways in the following areas:

1. Strategic Planning and Policy Making

   Informed Decisions: The survey's findings should provide data-driven insights that inform the strategic planning and policy-making processes. Understanding the effectiveness of various ecosystem components allows for targeted organizational improvements and investments.

   Benchmarking: Comparing your ecosystem's performance against broader trends can help identify where your region stands in terms of innovation support, infrastructure, and outcomes. This can guide policy adjustments or highlight areas for strategic focus.

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2. Resource Allocation

   Efficient Use of Resources: Insights into which areas of your innovation ecosystem participation are underperforming or where gaps exist can help direct funding and resources more efficiently, ensuring that efforts are concentrated where they can have the most impact.

3. Collaboration and Partnership Opportunities

   Identifying Partners: The survey can highlight areas within the ecosystem where collaboration between academia, government, and the private sector is particularly effective, suggesting models for partnership that could be replicated or adapted in your region.

   Networking: Understanding the roles and perceived effectiveness of different actor groups within the ecosystem can facilitate more strategic networking and collaboration efforts, aligning stakeholders with complementary objectives and resources.

4. Talent Attraction and Retention

   Skilled Workforce: Insights into the availability of mentorship, funding, and support for entrepreneurs can help in developing programs that attract and retain talented individuals and startups in your region, contributing to a vibrant, innovative community.

5. Economic Growth and Competitiveness

   Global Integration: For those in college towns or involved in economic development, understanding how well local ecosystems are integrated into global trade and markets can inform initiatives to enhance global competitiveness and attract foreign investment.

   Innovation-led Growth: The survey can provide evidence of the correlation between a robust innovation ecosystem and overall economic health, underscoring the importance of fostering innovation for long-term economic resilience and growth.

6. Advocacy and Funding

   Evidence for Support: Aggregated survey data can serve as evidence to advocate for more support and funding from higher levels of government or private investors, showcasing the needs and potential of your organization within the local innovation ecosystem.

7. Personal and Professional Growth

   Knowledge Expansion: Engaging with the survey findings allows professionals to stay informed about the latest trends and best practices in innovation ecosystem development, enhancing their expertise and value to their organizations.

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About the Survey

• The survey will take approximately 15 minutes to complete. Your responses will be kept confidential and analyzed only in aggregate form.

• After some basic demographic questions, there are 5 questions asking you to:

  • Assess the actors within your innovation ecosystem

  • Rate the importance of innovation ecosystem components

  • Make recommendations

Key Takeaways

• Nebraskan startups have attracted well over a billion dollars in venture capital in the decade since 2011, a year where no venture capital was raised.

• State buy-in for research, innovation, entrepreneurship and infrastructure accelerated with the Business Innovation Act, with investments stewarded by leadership from all corners of the innovation ecosystem.

• Innovation ecosystem leaders and members have created the conditions for future success, including significant investments in the support infrastructure researchers, innovators and entrepreneurs require to succeed.

• Investments in existing areas of intellectual and economic strengths are complemented by strategic investments in growth industries, from advanced manufacturing to health and life sciences.

• Read this article to learn about the process they followed, what makes their innovation ecosystem unique, and strategies that can be applied anywhere.

• Note TGB innovation ecosystem pillars: Local Uniqueness and Strategic Differentiation; Collaboration and Synergy; and Resilience and Adaptability.

• Recommended reading: Part 1 and Part 2 of this three-part series.

Traction Required

Nebraskans are fiercely loyal to their state. There’s a palpable sense of state and civic pride which neatly intersects with personal independence, a builder’s mentality, and willingness to do more with less. Lincoln, the capital, embodies Nebraska's deep commitment to community and civic engagement. University of Nebraska-Lincoln’s women’s volleyball team is so beloved that fans set an attendance world record. Cornhuskers football has sold out the The Sea of Red 60 years running. This feeling of pride and connection is the reason why many who’ve left return: Nebraska feels most like home. If there is a place where innovation and entrepreneurialism are as natural as breathing, Nebraska fits the description.

And yet.

Worldwide in 2011, 3051 companies attracted over $30 billion in venture capital. Not one of those dollars went to in-state deals in Nebraska. In a year when X, then Twitter, closed two separate nine-figure deals, Nebraska’s startups gained no VC traction.

Every intellectual and cultural ingredient was present, but the capital wasn’t. With jurisdictions across the globe supporting research commercialization, creating innovation infrastructure, and offering seed funding to high-potential, early-stage companies, Nebraska stood out for the wrong reasons. Absent sufficient support, all too often innovation and entrepreneurship fell by the wayside. With too few startups surviving proof of concept, venture capital went elsewhere.

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Problem, Meet Solution

It was a watershed moment, confirming among state officials, the business community, and academia the need to fundamentally rewire Nebraska’s approach to innovation. Global competition is too intense, today’s technologies too complex, that without a high-performing innovation ecosystem it is extremely difficult for an individual region to compete effectively. Innovation ecosystems are now perhaps the single most important modern determinant of long-term municipal and regional economic success.

Nebraska’s subsequent passage of the Business Innovation Act (BIA), including “access to capital in early stages of product development,” recognized that innovation is a large scale, collaborative enterprise requiring infrastructure and close integration between government, business, academia and innovators.

Key Milestone: A Fully Functioning Innovation Ecosystem

In a single year, 2021, Nebraskan startups successfully captured $334 million worth of venture capital attention. The product of a sustained, decade-long run, this achievement can’t be overstated. With technology-based innovation integral to the state’s strong GDP growth, ranked 19th nationally by the BEA, infusions of in-state technology represent a double win.

But the real story is this: Nebraska’s innovation leadership successfully directed the state’s existing strengths and unique culture into an innovation ecosystem capable of producing—year after year—new technologies, jobs, and companies.

Real Success Requires Real Work

The success is real and sustained: over the past decade in-state startups have attracted over a billion dollars of venture capital. Explaining zero to a billion requires more than a single post, so at the risk of oversimplification the rapid emergence of Nebraska’s innovation ecosystem appears based upon four factors:

• Research advantages in food and agriculture, health and life sciences, robotics and advanced manufacturing

• Industry strengths in food and agriculture, insurance, and manufacturing

• Cost of living advantages attractive to talent, and cost of production advantages attractive to investors

• Culture. Nebraska is known for its do more with less, self-reliant culture and for banding together to help one another, traits noticeable among its innovation leaders.

We're used to doing things ourselves, building things ourselves, and used to doing more with less. Our acumen in building things is strong.

• Dan Hoffman, CEO, Invest Nebraska

Signal Received

As they develop, innovation ecosystems signal what makes them unique: their own characteristic blend of local culture and mix of infrastructure, methods, and technologies.

Stewardship might be the most apt term to describe Nebraska’s approach to its innovation ecosystem, reflecting an ethos of hard work, dedication, community focus, long term commitment, and emphasis on real world applicability.

One of the hallmarks of our ecosystem is its collaborative nature. The overall willingness to help others is so amazing to me. From C-levels in startups and existing businesses to new founders who are just getting their feet wet. It's such a collaborative and collegial environment. It's fantastic.

• Brad Roth, President and Executive Director of NUtech Ventures

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Building the Structures That Change the Game

Dan Hoffman is the CEO of Invest Nebraska, which supports in-state startups in partnership with the Nebraska Department of Economic Development, among others. He sees both the complexity and opportunity of aligning entrepreneurs, infrastructure, and capital with the state’s areas of strength and future growth. “It's not only about money, it's the infrastructure that needs to be built up around those entrepreneurs.”

Invest Nebraska launched The Combine in 2019: leadership in food and agtech is not only lucrative, but strategically vital for an economy leading in those fields. The Combine’s space at Nebraska Innovation Campus, itself part of University of Nebraska-Lincoln, showcases capital, government, and academia collaborating effectively to develop useful infrastructure and practical startup support.

Strengthening Existing Industries; Establishing New Ones

Spurred by the invigorated investment climate and support infrastructure, Nebraska’s homegrown IP and technologies are finding their way into the economy in mutually reinforcing ways. Infusing the industries anchoring the state’s economy— agriculture, manufacturing and insurance—with in-state technologies like Sentinel Fertigation’s real-time, imagery-based nutrient recommendation software, turns digital transformation into a job-creating strength.

Economic diversification is the flip side of the economic development coin. When Nebraskan startups in advanced manufacturing, healthcare, bioscience, and robotics receive investment—now aided significantly by in-state access to specialized research and innovation infrastructure—the importance of close integration between government, business, academia and innovators becomes impossible to miss.

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The product of that integration includes some impressively innovative firms. Monolith’s methane pyrolysis process produces low-emission carbon blacks found in products like tires, plastics and inks. Virtual Incision “is on a mission to miniaturize robotic surgery” and is actively collaborating with NASA.

Enter the Misfits

Brian Ardinger, now Director of Innovation at Nelnet, founded NMotion, Nebraska’s first startup accelerator, during his stint as an Entrepreneur In Residence at NUtech. His pioneering efforts are evident today in Lincoln’s startup and entrepreneurial ecosystem. He saw a clear need for networking and mentorship—community, essentially—and access to seed capital.

The entrepreneurial ecosystem has come to fill many needs: a training ground to prepare entrepreneurs for the rigours of startup life, a vital node representing entrepreneurs’ interests within the innovation ecosystem, an organized way for startups and capital providers to engage, and a community and platform for unconventional thinkers to come together. As Brian warmly puts it, “misfits” in traditional work environments often thrive as founders or “employee number five” types at high risk startups.

The city itself has embraced the startup community. Lincoln Partnership for Economic Development (LPED), offers seed funding and programming.

The density of collisions is one of the reasons why Lincoln has shown out. It's literally a 5 minute walk to the University and the downtown Haymarket area, where Hudl and other startups have convened. You run into your accountant, or lawyer, or marketing person in the street when you're grabbing coffee—it's just easier to make those interactions and collisions happen

• Brian Ardinger, Director of Innovation, Nelnet

Nebraska’s Success Formula: Stewardship, Practicality…

There’s a famous line in True Grit, “If you want anything done right you will have to see to it yourself every time.” Conversations with Brad Roth, President and Executive Director of NUtech Ventures, typically followed this path. Each person or organization he mentioned was doing something proactive and above the call of duty, clearly aware of their pivotal role in the development of UNL-Lincoln-Nebraska innovation ecosystem.

This philosophy is evident within NUtech itself. The nonprofit technology commercialization affiliate of the University of Nebraska, their mission emphasizes improving quality of life alongside economic development. In addition to managing UNL’s tech commercialization process they support innovators and entrepreneurs with programming and support, including community members outside the UNL ecosystem. Within the past year, over 50 startups benefited from NUtech support, ranging from entrepreneurial training to IP management.

…And Giving Back

But if there’s an example that truly encapsulates the care, cohesiveness and community orientation of Nebraska’s innovation ecosystem it’s the RISE program founded by Jeremy Bouman. RISE prepares and trains incarcerated people for community re-entry through habilitative programming including “intensive character development, employment readiness, job creation through entrepreneurship, family programming and case management.”

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The role of startup ecosystem members is a clear point of pride for Brad, “The entrepreneurial community has stepped up the past several years. I can't tell you the number of founders and others in the the ecosystem who have participated. It's just moving. People want to help. Finding a job for the formerly incarcerated is still a really big deal; it's really a tough go.” Over the course of visits and interactions, volunteers help change lives by evaluating cover letters, mission statements, resumes, and discussing entrepreneurship with inmate cohorts.

Conclusion

Marc Andreessen said “capital is abundant, but opportunity is scarce,” referencing over $6 trillion in bonds (at the time) returning negative yields. His point was that vast amounts of capital could be poured into forming more Facebooks and Googles—if those nascent opportunities existed. For Nebraska, the first steps have been taken: creating the conditions for success. They’ve solved the biggest challenge: starting from zero in 2011, where do the initial successes come from, those that stand a chance of drawing interest when competing with the global next big thing?

There’s abundant infrastructure focused on existing strengths like agtech and life sciences. The interconnections between academia, economic development, government, business and capital are robust. “Extra mile” type leaders are present throughout the innovation ecosystem network.

Investment in growth areas is both focused and significant: of the past billion venture capital dollars invested in Nebraska, over 20% has gone to health and life sciences, and a further 33% into hardware, robotics and advanced manufacturing.

There is also a thoughtful response to the scale challenge smaller innovation ecosystems face. Invest Nebraska notes 126 VC firms outside the state have invested in Nebraskan ventures. Partnerships and alliances are forming to facilitate greater access to information and resources, and efforts are being made to incorporate rural areas and small communities into innovation efforts. Through NUtech, UNL is part of the Great Lakes Region I-Corps Hub. Exploratory discussions have been held with university colleagues in Missouri, Iowa, and Kansas, looking for strategic growth, knowledge sharing, and partnership opportunities beneficial to the Heartland states.

Success is mercurial. But zero to a billion, dedicated innovation leadership, and state-of-the-art infrastructure suggests it’s here to stay.

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Key Takeaways

• The Kingston-Syracuse Pathway is a cross-border, collaborative economic corridor designed to drive regional economic development and innovation.

• The Pathway makes sense because of the:

  • Development of physical and economic infrastructure essential for supporting new initiatives and collaborations.

  • Implementation of a comprehensive plan focused on economic development and innovation.

  • Relationships and networks built among key stakeholders, including academic institutions, government entities, and economic development organizations.

  • Identification and nurturing key sectors such as life sciences and sustainable manufacturing, which are integral to the Pathway.

  • Environment conducive to innovation, research, and development.

• Universal takeaways include collaboration as a key driver, adaptability linked to strategic planning, and leveraging unique strengths.

Lift-Off: The Kingston-Syracuse Pathway.

In one example of the future-is-now concept, specialized medical drones quickly and safely fly between Kingston and Syracuse, delivering life science supplies and samples to key cross-border research institutions. The short flight times and simplified logistics connect researchers more closely, leading to greater collaboration where previously it was impractical. Led by economic development and academic teams on both sides of the Canada-U.S.A. border, next-generation health innovations are arriving on the tailwinds of forward-thinking economic policy.

Once the pilot phase is complete and pragmatic challenges like compliance with FAA and Transport Canada air transit regulations are resolved, "The drone delivery service could be utilized by companies or customers from both sides of the border, from science and technology applications to the products and services emerging from our partnership," says Ben McIlquham, Investment Manager, Health Innovation, Kingston Economic Development. "It not only aids in practical logistics but also significantly strengthens our relationship with the U.S., our largest trading partner."

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From drone flights to soft landings, the Kingston-Syracuse Pathway (KSP) — the burgeoning economic collaboration between two cities sharing similar challenges — is emerging as a fully-fledged economic corridor. In the bigger picture, the Pathway promises to unlock a broad-based wave of Kingston and Syracuse-based innovations, which also includes sustainable manufacturing and an array of technology sectors.

I'm interested in looking at long term economic sustainability; we need to make sure we have the workforce of the future. - Donna Gillespie, CEO, Kingston Economic Development

Today, Kingston and Syracuse are obvious and natural partners. But it’s obvious and natural only because key actors in both cities built enough physical and economic infrastructure to peer over the strategic horizon, seeing not only the potential payoff of the drone program but a place where, together, entire marketplaces open up. The 31 million people comprising the New York City, Toronto, Ottawa and Montreal markets are awfully attractive to the 320,000 people resident between Kingston and Syracuse.

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Soft Landings and Open Doors.

The Pathway, which had its start in 2018, has evolved into an essential part of securing Kingston’s economic future and is now fully embedded within the city’s integrated economic plan. Companies using the soft landing dimension of the program are shepherded into cross-border opportunities. On the Syracuse side, Upstate Medical University, CenterState Corporation for Economic Opportunity , Central New York Biotech Accelerator, and The Tech Garden are among the program’s supporters.

Bilateral opportunities exist for Kingston’s life sciences researchers, including Queen’s and the Centre for Health Innovation, as well as Kingston General Health Research Institute (KGHRI). The Pathway is their channel to research, develop, and validate solutions for the U.S. market, including collaborations with their Syracusan counterparts who themselves find similar soft landings north of the border.

Economic Logic Drives Good Strategy.

Cities compete relentlessly to attract companies, talent and funding. Kingston's proximity to major cities like Toronto, Montreal and Ottawa brings with it challenges and opportunities for carving out its own economic identity. Toronto, only a few hours drive west, is linked with Waterloo via the world-ranked Toronto-Waterloo startup corridor. Factors like population and language arguably make Ottawa and Montreal natural ‘corridor’ partners. But Kingston’s built environment, says Donna Gillespie, “gives us the infrastructure that a large city would have, but on a very human scale." enabling the city to punch far above its weight. Now, with its integrated economic plan and tight linkages between the city, economic development and academia, the city’s assets are coordinated into a focused and practical strategy. Within this, the Pathway becomes a logical extension incorporating Kingston’s built-in competitive advantages.

The city itself is beautiful, particularly along the waterfront. Queen’s University is renowned; Royal Military College is the largest military educational institution in Canada. The Canada-U.S.A. border is a short drive away. While upstate New York isn’t as populous or advantaged as the southeast, it is focused on economic renewal and dotted with high-end universities and colleges, Syracuse University and Upstate Medical University among them. This is the context within which Donna Gillespie frames economic development, “How are we looking at this whole region? Where are the assets? Formalizing an economic corridor with Syracuse is amazing. There are so many linkages with what they’re doing.”

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Strategic Takeaways.

Every place, large or small, requires a unique selling proposition (USP). Why live there? Locate one’s business there? Why stay? Leaders from Kingston and Syracuse understand this; part of their solution lies in building an economic partnership founded upon shared and complementary strengths. They’ve opened a flight path in which — should the pilot program achieve its objectives — world-class research institutions overcome distance to become tightly interlinked, drones speeding back and forth exchanging samples potentially leading to future breakthroughs.

But the flight path is also a metaphor of the bigger picture: Kingston’s integrated economic plan in action. The innovation ecosystem and the coordinated, strategic support it receives is a key reason the city is an attractive place to live. Extending the city’s reach and influence via the Pathway strengthens the existing ecosystem and economy. It is also an innovative investment aimed at economic resilience and growth, part of a sequence of logical, forward-looking moves engineered to draw upon and enhance the city’s physical, economic and social infrastructure.

Every city and town needs to engage with the complex matters of understanding their strategic landscape, designing an integrated economic plan, and injecting life into their own innovation ecosystem. But as no community’s strengths and position are the same, the flight paths differ and there isn’t a single blueprint.

Solving Challenges.

As places like Kingston strive to carve out competitive positions in sectors like life sciences, challenges crop up routinely. One of these is straightforward but hard to solve: matching infrastructure to demand.

For years life sciences researchers have relied on offshore wet labs, in China for example, to analyze their samples. Today, huge political and technological shifts make on-shoring—the return of manufacturing to domestic locations—an extremely attractive option. But this has revealed a concerning infrastructure gap: it can take years to build wet lab facilities, with all of the knock-on effects of turning away business and the risk of losing meaningful new research and technology to other locations.

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In Kingston’s case, its life sciences hub employs over 11,000 people from Queen’s, St. Lawrence College, KGHRI, and dozens of companies like Octane Biotech. Health Innovation Kingston, a multi-million dollar federal government program designed to inject capital into the ecosystem, spurred jobs and growth. Says Ben McIlquham, “We hit our jobs and growth mark halfway through the funding. We've blown everything through the water.”

Given life sciences are core to the economic plan and foundational to The Pathway, wet lab space is a vital strategic requirement. If additional planned for space isn’t added, it is possible the sector’s growth could slow unnecessarily.

Making the Complicated Simple Attracts Talent.

A quick review of the agencies, research groups, institutions and projects formed to support research, innovation and commercialization emphasizes the transition from innovation to innovation ecosystem. The challenges are more complex; the obstacles are bigger. The innovators tackling today’s research and business challenges need help. Life sciences research, for example, is capital intensive and requires specialized equipment, including wet lab facilities. Commercialization activities—concept validation, funding, market access—rival the research side in difficulty.

Most researchers aren’t good at building businesses. Most business people aren’t comfortable in the lab. Few people know, for example, flying lab samples between research locations by drone is an emerging option. No one fully grasps the implications of this single logistical breakthrough on the scale and pace of life sciences research and commercialization, let alone the unending stream of disruptive breakthroughs continuously changing the rules of the game.

The inspiration residing within the minds of one or two people with specialized know-how is still the big game-changer. Genius is rewarded today more than ever. But now it takes a literal city to get their big ideas to the start line. The Kingston example shows it takes committed professionals coming together from economic development, business, academia, and government backgrounds to manufacture the infrastructure, market access, and political commitment that attracts and retains world-class research and entrepreneurial talent, and thus the opportunities they create.

Infrastructure, from labs to economic corridors, attracts talent. Talent collaborates to crack complex problems. New solutions are born, new markets emerge — some now only a short drone flight away.

How Kingston Built Their Innovation Ecosystem.

The New Paradigm of Economic Complexity, Balland, P.-A., Broekel, T., Diodato, D., Giuliani, E., Hausmann, R., O’Clery, N., & Rigby, D. (2022). The new paradigm of economic complexity. Research Policy, 51(104450). https://doi.org/10.1016/j.respol.2021.104450

Key Takeaways

• Economic complexity measures the diversity and sophistication of an economy's productive capabilities and knowledge networks.

• The New Paradigm of Economic Complexity explains why economic complexity is important. Anyone in local government, economic development or higher education should be aware of these concepts.

• The objective is a modern, resilient, future-proofed economy and improved quality of life for citizens.

• “Specialization and diversification are, in fact, two aspects of the same phenomenon seen from two different scales. If individuals specialize, firms, cities, and countries diversify.”

• “The whole knows more because individuals know different, which is to say that the growth of know-how happens thanks to specialization.”

• Includes practical, accomplishable steps for municipalities.

A Shorthand Definition of Economic Complexity

Economic complexity measures the diversity and sophistication of an economy's productive capabilities and knowledge networks.

The greater the level of diversity and sophistication of an economy's productive capabilities and knowledge networks, the stronger, more resilient, more future-proofed and more attractive to talent it becomes.

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The Paper’s Main Argument

Economic complexity is a way of understanding interactions influencing growth, development, technological change, income inequality, spatial disparities, and resilience.

It’s useful for policy and investment decisions regarding the accumulation and utilization of productive knowledge. Productive knowledge is the main input of complex economies.

How Are Economic Complexity and Knowledge Connected?

Creating economic complexity requires the right ingredients. The most important ingredient is productive knowledge.

• Knowledge Forms: Productive knowledge can be categorized into three parts: embodied (tools and materials), codified (books and manuals), and know-how (tacit knowledge we carry with us). Specialized individuals possess productive knowledge based on these three ingredients.

• Division of Knowledge: Modern technological progress is too big and too complicated for any one person. Progress therefore relies on the division and coordination of knowledge among specialized individuals. Specialized individuals working together on complex problems lead to economic diversification.

• Specialization and Diversification: Individual specialization leads to city, region and national economic diversification.

  Specialization and diversification are, in fact, two aspects of the same phenomenon seen from two different scales. If individuals specialize, firms, cities, and countries diversify.

  — The New Paradigm of Economic Complexity

• Dynamic Effects: Specialization and diversification enable societies to accumulate and create new productive knowledge, leading to economic complexity.

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The Challenge For Smaller Cities

• Complex activities require a deep division of knowledge, which in turn creates high coordination costs that big cities and technology clusters help solve by providing infrastructure and opportunities for talent and ideas to collide. This has a systematic, reinforcing effect: a virtuous cycle of specialization and diversification leading to greater degrees of economic complexity.

• This can trigger the movement of people, who are critical for the transfer of know-how and technology diffusion. Migration might be a key strategy for knowledge sharing but can also lead to talent draining from less built-up areas.

Responding to the Challenge

Fostering a diverse set of specialized knowledge and skills can lead to greater collective know-how and innovation. In turn, this creates opportunities for a modern, resilient, future-proofed economy and improved quality of life for citizens.

• Core Principles:

  • Leverage local capabilities and existing industries to build complexity.

  • Encourage related diversification to create more complex activities.

  • Utilize decentralization to empower local decision-making and foster dynamic capabilities. Less command control, and more creating the conditions to accumulate more productive knowledge.

• Managing Complexity and Specialization:

  • Develop place-based policies that consider the unique attributes and strengths of the local area.

  • Support the movement of skilled individuals and the co-location of complementary businesses to enhance knowledge transfer.

• Mechanisms for Local Knowledge Creation and Economic Complexity:

  • Invest in local education and training to build a modern, skilled workforce.

  • Create networks and partnerships among local businesses, educational institutions, and government to facilitate collaboration.

  • Invest in creating networking events, innovation meetups, and collaborative spaces where individuals from different sectors can come together to exchange ideas, knowledge, and experiences.

  • Implement smart diversification strategies that align with local strengths and global market opportunities.

  • Avoid over-specializing at the municipal level too quickly. Leave the door open to greater diversification down the road.

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• Transfer of Knowledge Types:

  • Promote local learning and the development of worker know-how. Learning to validate concepts is an important skill to partner with subject matter expertise.

  • Foster innovation hubs or clusters that concentrate related industries to facilitate knowledge spillovers.

  • Encourage the use of digital platforms and technology to bridge the physical distance and connect local actors with wider networks.

• Leveraging Local Strengths:

  • Identify and build upon niche areas where the local region has existing or potential competitive advantages.

  • Encourage local entrepreneurship and the development of small and medium-sized enterprises (SMEs) that contribute to economic diversification.

  • Facilitate connections with larger urban centers and global markets to enable knowledge exchange and economic opportunities.

Conclusion

The whole knows more because individuals know different, which is to say that the growth of know-how happens thanks to specialization.

— The New Paradigm of Economic Complexity

Economic complexity might be best thought of as a continuum along which every nation, region and municipality progresses. That process can be fast or slow, with consequences for employment and quality of life.

Given the tendency of complex activities to cluster in existing centers and hubs, non-centers must respond in order to maintain and improve quality of life for their citizens. National and regional policy and investment are crucial. Likewise, independent, practical, accomplishable steps are immediately available to municipalities.

Observations

Not every population center is Silicon Valley or global tech hub. Nor should they necessarily want to be. Most places don’t want to abandon what makes them unique in favour of pursuing different goals. However, when people are looking for attractive places to live, rewarding work is critically important. For this reason every city, town and region should build economic complexity into their planning.

Almost by definition economic complexity is hard to spark, manage and grow. Innovation ecosystems have emerged as a solution, unifying the key actors within municipalities: government, economic development, chamber of commerce, business community, entrepreneurs and, in many places, higher education institutions.

Virtually every municipality possesses these economic complexity building blocks, but there is great variance in infrastructure, coordination, scale, intensity, location, investment, and existing technological expertise. Information sharing and partnerships aid in levelling the playing field.

If the objective is a modern, resilient, future-proofed economy and improved quality of life for citizens, then fostering a diverse set of specialized knowledge and skills is of fundamental importance. Start with an accurate assessment of your current position; begin the levelling-up process by leveraging existing local capabilities and industries.