Strategic Localization: The Power of Differentiation in Lethbridge's Economic Development
Southern Alberta's economic hub is building a distinct innovation ecosystem based on the region's unique characteristics and investment in social entrepreneurialism.
“The worst mistake in strategy … is to compete with your competitors on the same thing. You want to find a different kind of value that you can deliver to a different set of customers. Strategy is fundamentally about how you’re going to deliver unique value.”
Michael Porter, Harvard University
If there is a trap cities often fall into, it is failing to confront the sheer scale of change occurring all around them. The reasons are easy to understand: the scale is huge and the pace is slow. But while one day looks very much like the next, digital transformation and other major forces are subtly imposing change and eroding strategic control. Time passes; real change arrives. Responding isn’t optional, it’s mandatory.
While no place is spared, all places face opportunity, emerging from establishing excellence in areas of strength to gaining resilience through strategic investment in new areas of growth. For these reasons what’s happening in Lethbridge, Alberta is an example full of strategic and operational implications for innovation ecosystems and regional economic development.
Economic Development Lethbridge
A critical part of Lethbridge’s innovation ecosystem is contained within an understated building located in the city’s north-end industrial park. It’s the home of Economic Development Lethbridge (EDL) where the mandate is helping to secure the City of Lethbridge’s economic future and its ongoing evolution into an economically resilient municipality, offering a high quality of life and a warm, productive welcome to newcomers.
It’s not necessarily an easy proposition. Lethbridge is home to just over 100,000 people: far smaller than Calgary’s 1.3 million residents living a manageable two hours drive north. The innovation ecosystem dynamic is similar to that between Kamloops and Vancouver, with the larger city further along the development curve. It is simply easier, at this point in time, for Calgary to attract resources that accelerate the growth and development of its own innovation ecosystem.
While intercity relations are friendly and collaborative, it is up to Lethbridge to find its own way, carving out its own innovation path built from its own unique characteristics. Here, EDL breaks a stereotype and leads in important ways.
Social Entrepreneurship
We often think of entrepreneurship stereotypically: a couple of engineers working out of a garage, trying to solve a problem. The classic eureka moment in a lab. A nascent startup pitching investors. We envision relentless testing, prototyping, iterating and revising and, with good fortune and talent, a breakthrough. A new business is born.
It’s not always like that. Social good and public benefit are powerful outcomes of service-oriented entrepreneurship. These entrepreneurs aren’t building a product or a service. They’re building public infrastructure for the engineers, the lab team, and hopeful innovators from across a wide spectrum of backgrounds and interests. They’re targeting the social and economic future of a region, working to build infrastructure, attract talent, spark innovation, and spread a welcoming message. Like stereotypical entrepreneurs, they’re also testing, prototyping, iterating and revising in search of a more systemic breakthrough. Excelling at this form of entrepreneurship is a major competitive advantage.
Renae Barlow is the VP Entrepreneurship & Innovation at Economic Development Lethbridge. Her astute response to the realities of Lethbridge’s position and approach to innovation stand out; so does her entrepreneurial spirit.
Looking at the situation from Renae’s perspective is to see the innovation ecosystem as critical to the long term social and economic well-being of Lethbridge and southern Alberta. That mandates a civic culture of experimentation, further integration with the city’s ecosystem participants, and it also means being creative, looking outside the city to add more value and include more people. It means being part of a cohesive, measurable, differentiated strategy based on Lethbridge’s unique characteristics.
Connecting the Region to Strategy.
Geographically, Lethbridge has a lot to work with. It is a hub in its own right for the area’s smaller towns. It borders Blood Reserve, Canada’s largest, and is well-connected with the Piikani Nation. The city and the reserve lie within the Blackfoot Confederacy—territory traditionally spanning parts of southern Alberta and Saskatchewan, as well as northern Montana—with all that implies for partnership and economic development potential. It is not too far from Calgary but far enough to be distinct. It is only an hour north of the Canada/U.S.A. border and located on the CANAMEX corridor, the developing highway system upon which billions in goods travel between the three North American trading partners.
If strategy is fundamentally about how you’re going to deliver unique value then the challenge is straightforward for Renae and her Lethbridge and regional innovation ecosystem partners: identifying a different kind of value that they can deliver to a different set of customers.
The “different customers” are the researchers, innovators, and entrepreneurs who will help spearhead the next stages of Lethbridge’s social and economic development. They live in Lethbridge now; they will arrive from across southern Alberta including, hopefully, Confederacy members. While unicorn-chasing entrepreneurs might eventually head north, other entrepreneurs might head south. Others will come to Lethbridge from even further afield. These customers also include agricultural technology (AgTech), virtual and mixed reality, and gaming innovators from among the specialized fields taking root in the area. Innovators are their own community: what they find in terms of training, support and resources, how they interact with one another, the know-how they contribute, and the businesses they form are vital early-stage indicators of a community-led, robust, self-sustaining innovation ecosystem.
Strength in Numbers: a Growing Regional Network.
The Lethbridge and southern Alberta innovation ecosystem is rich with opportunity, containing important groups with a lot of value to contribute:
The City of Lethbridge: EDL is formed as an arm’s length non-profit representing the economic development needs of the city. This approach permits EDL strategic opportunities to benefit the city via partnerships and related strategies.
Alberta Innovates: The province’s largest research and innovation agency, Alberta Innovates services include funding, research and initiatives, expertise, networking and regional Technical Development Advisors.
RINSA: The Regional Innovation Network of Southern Alberta is headquartered at EDL; part of the Alberta Innovates innovation network.
Tecconnect: Owned and operated by EDL, it is the centre of entrepreneurship and innovation for Lethbridge and the southern Alberta region.
National Research Council - IRAP: Provides advice, connections, funding and Industrial Technical Advisors to help small and medium-sized businesses increase innovation capacity and take ideas to market.
University of Lethbridge: The University offers a donor-funded “comprehensive program, Agility, that supports students through course work & co-curricular activities, scholarships & fellowships.” The Science Commons offers open and flexible laboratories, maker-spaces and specialized outreach spaces.
Lethbridge College: Offers collaboration on projects that use new or existing knowledge to solve real-world challenges with immediate practical applications at the Centre for Applied Research, Innovation and Entrepreneurship (CARIE). Focus includes agribusiness and VR/mixed reality.
Lethbridge Chamber of Commerce: Champion for a strong community to enhance a healthy economic and social environment in the region.
Piikani Resource Development: Represents the development of economic opportunities for the Piikani Nation.
Blood Tribe Economic Development: Represents the development of economic opportunities for the Blood Tribe.
Blackfoot Confederacy: Committed to economic well-being via job creation, job retention, business development and quality of life.
Community Futures: Helps small, rural businesses get the help they need to thrive
Alberta SouthWest Regional Alliance Ltd: Regional Economic Development Alliance (REDA) of 15 communities working together to help each other succeed.
Southgrow Regional Economic Development: Accelerate and enhance quality of life, development and sustainability for the communities of the SouthGrow region.
Okotoks: Thriving trade zone encompassing businesses from around southern Alberta.
BIPOC Foundation: Economic empowerment, financial inclusion, and representation for all entrepreneurs in Western Canada.
When a growing community of innovators engages with the innovation ecosystem’s resources, the potential emerges for great things to happen. Accordingly, understanding the effectiveness of these interactions is crucial. A good way to get at this measure is a customer-centric view of innovation ecosystem performance. How researchers, innovators, and entrepreneurs respond to the environment Lethbridge provides goes an enormous way to predicting how well and how rapidly innovation sparks and develops. While it is fair–given the Lethbridge’s innovation ecosystem is still evolving and that later stage measures, e.g., patents issued, are future rather than present goals–there are important indicators of success to look for.
Indicators and Measures
These interaction-based indicators include program enrolments; events organized by ecosystem members followed by steady and increasing participation; company collaborations, staff movement between companies; and shared interest groups formed by ecosystem members. These interactions become stronger when ‘up-skilled’ community members and students participate; when awareness and promotion of ecosystem activities by community and business leaders increases; when trust forms that the ecosystem is sustainable; when mid to senior-level employees are attracted to the area; when partnerships form with other regions and larger innovation ecosystems; and government supports early stage innovation ecosystems with targeted programming.
Kamloops: At The Confluence of Small Cities, Technology, and Opportunity
EDL and RINSA measure everything. Customer-centric measures from initial steps like workshop attendees and how many workshops individuals attended, how ‘sectors’ of clients assess a program’s effectiveness, through to utilization of network resources. They are working to expand the growing pipeline of early stage innovators hitting Lethbridge’s innovation ecosystem, supported by funding through various provincial and federal government agencies. Tecconnect and RINSA work to expand the growing pipeline, fed by programs like RWEIT (Rural Women Entrepreneurs in Technology), early stage innovators from Lethbridge College and University of Lethbridge, and the network of regional partners.
Even for venture capitalists, building pipelines is a tough business. It is accepted that most of a VC’s portfolio companies will fail to generate a return in excess of their cost of capital, so VCs “optimize for slugging percentage.” That is, they seek home runs, aiming to link a fund’s high risk to high reward. It’s a solution to the selection problem: determining winners is exceptionally difficult. The same is true across the investment spectrum, from angels to governments: who will succeed and how do we find them? It follows that a degree of public investment targeted at uncovering more ideas and encouraging people into the innovation pipeline is a smart move. The upside includes more profitable businesses, a strengthened economy and a better quality of life. The downside includes an upside: the overall up-skilling of the population, with more people becoming valuable members of other local businesses and startups.
Expanding the Innovation Ecosystem Pipeline.
The Rural Women Entrepreneurs in Technology (RWEIT) program is an excellent example. For Renae, it’s both a personal passion to “stand up for the underdog” and good social entrepreneurship practice.

RWEIT is one example of promoting innovation ecosystem participation, a smart way to bring more people into the world where the fusion of ideas and skill matters tremendously to Lethbridge’s social and economic future, while opening the door for everyone. Other sources of innovation ecosystem participants include the partner network, the wider Lethbridge community, the college and the university.
Ushering more innovators into the pipeline is a vital part of the overall objective: a productive, self-sustaining, differentiated innovation ecosystem. So too are factors like diversifying the skill and technology foundation of the innovation ecosystem, developing processes that identify innovative ideas early, building trust, increasing the rate of ‘customer’ progression through stages of development, and creating the longer term infrastructure needed to attract talent and encourage them to stay.

Examples and Outcomes
Lethbridge, EDL, RINSA and Alberta Innovates can point to some great examples:
AdvancedAg: Develops innovative biology to improve soil and water health
Veras Technologies: Creating trusted connections across the internet between people, governments, and corporations
Daniola: The mining industry’s digital exchange platform
Sunterra Greenhouse: Decision-making tools in partnership w/ Lethbridge College
Per an Alberta Innovates analysis, a 10-year retrospective analysis determined that:
RINSA’s activities generated a GDP impact of $3.09 per dollar invested and supported 22 FTEs per million dollars invested, with an overall regional GDP impact estimated at $204.85 million.
RINSA expenditures and commercialization support are estimated to have contributed 1,480 FTEs to the economy during the 10-year period 2011/2012 to 2020/2021.
Each FTE supported is estimated to have contributed $138,000 to southern Alberta’s GDP.
The report also found that:
Relationship and trust building are central to the development of a robust entrepreneurial ecosystem
It is important not to ‘over-manage’ the ecosystem, giving entrepreneurs time and space to develop whilst providing support and guidance where needed
Meaningful measurement is difficult and should not stifle innovation
Key needs include filling skills gaps ranging from sales to executive management.
Deliver Unique Value.
If there’s one lesson both stereotypical and social entrepreneurs learn it is to invalidate your hypothesis, that is, discard what’s not working, refining the focus on what passes real life requirements, and understanding why. It is the concept of embracing the smaller failures in pursuit of the bigger wins. Constantly asking what makes us different and better, how we can bring in more people, how can we increase and improve our services, who we can partner with, how we get the word out, how we wrap useful services around a broader cross-section of society, how we increase graduation rates through our services from inception to commercialization—these are the foundational building blocks that ramp a developing innovation ecosystem to the white hot activity level where the system itself explodes into life, producing a diversifying, endless stream of new ideas, businesses and social good. The Lethbridge example is ideal for municipalities everywhere: look for those points of meaningful differentiation and build innovation ecosystems that harness and direct global transformative change into local, social and economic well-being.