In BlackBerry’s hometown, coming layoffs hardly the economy killing tragedy many might have expected; the Kitchener-Waterloo region is now a fluid tech hub and appears to be capable of not only weathering the storm, but finding a silver lining to the clouds hovering over BlackBerry

In BlackBerry’s hometown, coming layoffs hardly the economy killing tragedy many might have expected

Matt Hartley | 28/09/13 | Last Updated: 27/09/13 6:34 PM ET

Since its inception, there has always existed an inextricable link between the legend of Research In Motion and the small Southern Ontario city that plays home to the now struggling Canadian technology company’s global headquarters: Waterloo, Ontario. RIM’s emergence as a powerful force in the mobile world, thanks to the success of its BlackBerry smartphones, not only mirrored, but helped accelerate the elevation of Waterloo’s status to that of an internationally recognized hub for technology and innovation. There’s no question that BlackBerry — formerly known as Research In Motion — helped put Waterloo on the map as a technology hub, and just a few years ago, the spectre of substantial layoffs at the smartphone company could have proved disastrous for the local tech industry.But in BlackBerry’s hometown today, the coming wave of layoffs and the uncertain future surrounding what was once Canada’s most powerful tech company is hardly the economy killing tragedy that many observers might have forecast a decade ago.

Thanks to a bustling startup ecosystem, the expansion of engineering offices for U.S. tech firms and the influx of new mid-size companies, the Kitchener-Waterloo region is now a fluid tech hub and appears to be capable of not only weathering the storm, but finding a silver lining to the clouds hovering over BlackBerry.

Over the past two weeks, a steady stream of announcements coming from the local tech industry seems to indicate that whatever happens to BlackBerry, Waterloo will survive.

First, Square Inc., the high-flying mobile payments company founded by Twitter Inc. wunderkind Jack Dorsey, announced plans to establish an engineering office in Waterloo to tap into the region’s local talent.

Earlier this week, Google Inc. announced that Waterloo’s Communitech startup incubator was one of seven North American hubs selected to join the Google for Entrepreneurs Tech Hub Network. Soon after, Google’s smartphone manufacturer Motorola Mobility revealed plans to establish a new engineering office in Waterloo, just a 10 minute drive from BlackBerry’s campus.

Finally, the University of Waterloo recently revealed plans for a new expansion to its VeloCity startup incubator that will focus on supporting technology hardware and science-focused companies. While the current VeloCity centre is home to many software-focused startups, the university is aiming to open the several-thousand-square-foot  VeloCity Foundry facility early next year to provide workspace for students and young entrepreneurs creating companies focused on hardware technologies, including nanotechnology, robotics and mechatronics.

“There’s a common thread right now that we’re experiencing the renaissance of hardware and there’s a variety of changes and shifts in the market that are causing that to occur,” said Mike Kirkup, a former RIM employee who now serves as director of VeloCity.

“That’s what’s driving a lot more focus back to hardware because the opportunities to build a very successful company are increasing rapidly right now similar to the kind of boom that we saw around software over the last 8-10 years.”

BlackBerry revealed last week that the company plans to cut as many as 4,500 employees as it seeks to trim costs and chart a new course after its smartphones were overwhelmed by competition from Apple Inc.’s iPhones and devices running on Google Inc.’s Android software.

While the new VeloCity centre will be focused on students, it seems there are plenty of companies in the Waterloo region that are hoping to find new jobs for 500 BlackBerry employees that may find themselves out of work.

One of the great things about this region . . . is that it’s extremely diverse and is not dependent on any one particular company

According to data compiled by Communitech, in 1997, there were roughly 50 technology companies in the Kitchener-Waterloo region, which employed more than 1,800 people creating about $100-million in revenue. Compare that to today, where more than 1,000 tech companies call  Kitchener-Waterloo home, employing 30,000 people and generating more than $30-billion in revenue.

“One of the great things about this region, and the University of Waterloo, is that it’s extremely diverse and is not dependent on any one particular company or any one particular technology” said Tim Jackson, vice president of university relations for the University of Waterloo.

“One of the things that happens when anyone in town downsizes is we get great talent into the community … the startup sector is growing rapidly, continues to grow, and so for the folks who will be displaced just generally with the local economy, going to a startup and getting involved with some entrepreneurs is a great career choice.”

In the cities of Kitchener and Waterloo, the reality of BlackBerry’s situation hits home. According to Catherine Fife, MPP for the riding of Kitchener-Waterloo, many people are either related to or know someone who worked for BlackBerry, and yet there remains a cautious sense of optimism among her constituents.

“There is an understanding that it isn’t all doom and gloom, because there are job vacancies and the skill sets of that people will be bringing into the new workforce, there’s a demand for those skills around innovation, technology and light manufacturing,” Ms. Fife said.

“It may sounds strange, but there is definitely a sense of hope. The community as a whole has has a reputation of coming together to support one another, and as soon as we heard the initial announcement from BlackBerry [about the most recent round of layoffs], the universities, Communitech, they all came together to start problems solving because that’s just the kind of community that it is.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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