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Home My WebLink AboutCommunitech - 2009 Operating Budget Reductions - Revised Submission - Jan.9-09COMMUNITECH Carl Zehr, Mayor, and Members of Council City of Kitchener PO Box 1118, 200 King St. West Kitchener, Ontario N2G 4G7 January 9, 2009 Dear Mayor Zehr and Members of Council: I'm writing to update you on the progress that Communitech has made over the course of 2008, thanks to the $30,000 investment of the City of Kitchener in building the local technology industry. As the Region's innovation organization, we support local economic development strategy by growing the economy through high growth, robust tech companies, and high value jobs. This complements the work of Canada's Technology Triangle Inc, which focuses on foreign investment attraction, and the work of the City's economic development team. A recent evaluation of the Waterloo Region technology sector attributes $175 million of value directly to the work Communitech does with more than 500 technology firms across Waterloo Region, including the more than 160 start-up companies we worked with in the past year. Based on the same methodology, the City of Kitchener's investment of $30,000 last year delivered $2.8 million in value to the Waterloo Region tech sector through new company and job creation, tech sector revenue, and private equity investment. Last year, I presented Council an overview of the needs of technology companies. To meet those needs, we asked the City of Kitchener and our other municipal partners to support our work in these ways: 1. Building Networks -keep connecting and improving the quality of relationships, and helping tech companies to attract talent 2. Industry education -facilitate mentorships and innovative learning opportunities on topics relevant to start-ups and SMEs 3. Government programs -evaluate what was available and help companies to decipher, secure access and maximize benefit from select government programs 4. Money - develop a lobby platform that speaks specifically to the needs of SMEs that need to grow now 5. Branding -fortify Waterloo Region's place on the map for talent and investment attraction 6. Cluster Building -support and strengthen the critical mass of the local digital media sector These activities share a strong focus with several of the City's economic development objectives, including diversifying the urban economy, supporting manufacturing competitiveness, attracting and retaining talent, and building a dynamic downtown. am pleased to share the attached highlights of our 2008 results with you, and to thank you for the investments of the City of Kitchener in this community's technology industry. Looking ahead to 2009, we ask that the City consider a renewed investment of $30,000 in Communitech to allow us to continue our work on behalf of the community. We further request that the City consider changing the nature of its support from aproject-by-project basis, to a partnership in shared economic development objectives. A singular area of focus in 2009 will be to deliver funding for the Digital Media Convergence Centre in downtown Kitchener. This is a key part of the City of Kitchener's economic development cluster strategy. Over the next five years, DMCC will deliver: • 100 start-up companies in the digital media industry • 8,000 new jobs • $50M venture capital fund targeted to digital media efforts in Southwestern Ontario that will be leveraged by a factor of 5:1 • $5M investment accelerator fund for very early stage companies Communitech has already raised $20 million in financial commitments toward establishing the Digital Media Convergence Centre in downtown Kitchener. We are seeking a further $16 million in provincial and federal public-sector support forthe DMCC, and continue to engage national leaders in the private sector -building relationships with the likes of IMAX, Side Effects Software, and Intel Canada. Kitchener's digital media cluster is critical to diversifying the urban economy, and to supporting manufacturing competitiveness through R&D, process innovation and visual prototyping. The DMCC will also be a key magnet for talent, strengthening existing Kitchener companies, and building new companies on the leading edge of Canada's information & communications technology sector. Digital media is an immense global market with a high projected rate of growth - it will be a $2.2 trillion global industry over next five years. Aside from our work on the digital media cluster, Communitech's talent recruitment initiatives will continue to attract knowledge workers to pursue careers at leading tech companies, and we will work with other area partners to brand this community as a strong technology cluster. We have plans to expand the reach of the Business & Education Partnership, with the goal of reaching more than 20,000 of our community's young people each year. And we will sharpen our focus on supporting SMEs, helping them to overcome barriers to growth in difficult economic times. Thank you for the opportunity to meet with Council on January 12, 2009; should you have any questions about Communitech's programs or activities, please don't hesitate to contact me. Sincerely, { _f rr. - _ ~r ~,.~ lain Klugman, President and CEO CC: Carla Ladd, Chief Administrative Officer Communitech 2 Communitech Results 2008 The local tech industry is now valued at $13 billion, with more than $300 million in dealflow raised over the last 14 months. There are more than 2,000 tech sector jobs available in local companies, and this trend continues, despite current economic uncertainties. The tech sector has enjoyed 7% employment growth over the last five years. More than 525 technology companies call the area home, and these companies conduct more than $300 million in private sector R&D annually. Programming in six key areas helps Communitech achieve multiple objectives on behalf of the technology industry and its local municipal partners. Below are highlights of the year's results, which were achieved by successfully leveraging the $30,000 investment of the City of Kitchener to bring in matching contributions from other municipal partners, other levels of government, and from the private sector, and creating $2.8 million in value in the local tech sector. City objectives Program area & Results delivered company needs Creating, Recruitment Leveraged investments from government and Attracting, Branding companies ($70,000} to launch initiatives worth Retaining & • Building more than $200,000. Developing Networks Talent • Advertising and media strategy throughout Ontario to attract tech professionals • Ex-pat Canadian recruitment events in Silicon Valley • Email invitations and information to various New Canadian programs, such as COSTI • Recruitment events in Toronto, Hamilton, Ottawa, Markham, Mississauga and Burlington, with attendance ranging from 75-140 people per event; also on-campus events at local universities and college • Developed ahigh-quality "relocation guide", designed to provide potential candidates an overview of Waterloo Region (cost of living, housing options, lifestyle information, the sense of diversity of industry, etc.) • 1,000 new profiles created on the waterlootechjobs website in 2008 • Close to 200 companies take part in recruitment events and initiatives Diversifying the Commercialization Coordinated $12M funding application to Urban Economy Building establish Digital Media Convergence Centre in Networks downtown Kitchener Supporting Money Hired 2 more Executives-in-Residence to Manufacturing Communitech 3 Competitiveness Government Programs • Cluster building provide free business coaching services to startups -more than 4,000 contact hours with companies in 2008 EIR team worked with more than 150 companies i n 2008 Participated in Michelin Development Corporation's efforts to fund new companies in the community Helped startups raise more than $11 M in angel financing Supported Conestoga College's application to the Manufacturing Centres of Excellence program of NSERC Support R&D efforts of advanced manufacturing and other tech companies Part of MaRS Business Mentorship & Entrepreneurship Program Home of the Ontario Investment Accelerator Fund agent in Waterloo Region Joined Microsoft Biz Spark program to help support early stage companies Orchestrated 30 one-on-one meetings for start- ups with RIM, Google, Yahoo!, Microsoft and Sun during strategic partnering day $1 K pitch contest during Entrepreneur Week Hosted first ever Founders and Funders Dinner in Kitchener Coordinating access to government grant programs for local tech firms Creating, Engagement 8,000 area professionals (tech and non-tech) Attracting, Industry took part in Communitech events last year - Retaining & Education CEOs, COOs, CIOs, HR professionals, Sales & Developing • Building Marketing professionals from multiple industries, Talent Networks entrepreneurs, and students • Learning series workshops targeted areas in need of development: business strategy, talent recruitment, marketing and sales • 3238 connections made at Entrepreneur Week • World-leading speakers at Communitech events, including Chris Anderson, editor of Wired and Jeff Taylor, founder of monster.com Creating, Peer2Peer Groups More than 20 monthly meetings for tech Attracting, Building professionals to learn from one another -largest Retaining & Networks peer learning network in North America Developing Industry Launched new groups for User Experience Talent Education Design, Agile/Lean, Sustainable Development, and Senior HR Communitech 4 Creating, Youth outreach Reached close to 20,000 elementary and Attracting, Industry secondary students and worked with all 21 area Retaining & Education high schools through co-programming with the Developing Business & Education Partnership of waterloo Talent Region • Successful "Science Superheroes" lecture series for teachers and guidance counselors demonstrated the value of careers in scienceltech/engineering/ math -featured Christie Digital, RIM and COM DEV • Put 170 volunteer speakers in local classrooms over last 12 months Building a Advocacy Coordinated $12M funding application to Dynamic Branding establish Digital Media Convergence Centre in Downtown Money downtown Kitchener -built financial support Government amongst local technology companies to establish Diversifying the programs DMCC in downtown Kitchener Urban Economy Cluster building ~ Raised $75,000 from Province to support entrepreneurship inwaterloo Region • Achieved national attention for local tech - Canadian Business, Globe & Mail, La Presse • Tech Directory identified 525 tech companies valued at $13B in revenue • Advocacy around government programs & support - CECR, SR&ED, co-op employer tax credit Communitech 5 Communitech Technology Association Inc. Statement of operations year ended June 30, 2008 coos 2007 ~ ~ Revenue Membership fees 473,511 504,044 Seminars, conferences and Special events 857,682 665,320 Business and Education partnership funding 165,000 189,D00 Municipal support 90,000 135,OOD Business Accelerator grant 173,453 166,133 Recruitment Strategy 50,676 95,3D0 Research funding 461,1$3 257,70D Interest income 16 691 5 233 2 X88,196 2 017 730 Expenses Salaries, wages and benefits 746,288 621,711 Seminars, conferences and special events 507,662 432,501 Business and Education partnership 167,591 179,014 Advertising and promotion 81,393 35,4D4 Rent 38,908 48,498 Travel 19,938 26,903 TelecvmmunicationS 14,035 15,821 Office supplies and support 111,296 98,191 Recruitment strategy 94,837 89,602 Research 222,602 165,467 Professional fees 60,660 43,641 Government relations ~ 27,092 Amortization 27,841 38,909 Other ex enses 2 518 2 095 569 1822 754 Excess o~ revenues aver ex enses 192 627 194 976 Page 3