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In Search of a Canadian Space Cluster Innovation Systems Research Network Sixth Annual Meeting May...
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In Search of In Search of a Canadian Space Clustera Canadian Space Cluster
In Search of In Search of a Canadian Space Clustera Canadian Space Cluster
Innovation Systems Research NetworkInnovation Systems Research Network
Sixth Annual MeetingSixth Annual Meeting
May 13-14, 2004May 13-14, 2004David ArthursDavid Arthurs
Tijs CreutzbergTijs Creutzberg
Christine HaveyChristine Havey
Innovation Systems Research NetworkInnovation Systems Research Network
Sixth Annual MeetingSixth Annual Meeting
May 13-14, 2004May 13-14, 2004David ArthursDavid Arthurs
Tijs CreutzbergTijs Creutzberg
Christine HaveyChristine Havey
OutlineOutline The Canadian Space SectorThe Canadian Space Sector The Six L’sThe Six L’s
• LocationLocation• LabourLabour• LegislationLegislation• LabsLabs• LearningLearning• LeadershipLeadership
ConclusionsConclusions Implications for Cluster TheoryImplications for Cluster Theory
Space Sector CharacteristicsSpace Sector Characteristics CSA statistics:CSA statistics:
• 200 organizations (122 in this study)200 organizations (122 in this study)• Revenues - $1.8BRevenues - $1.8B• Workforce 5,789 – 59% Ontario, 21% Quebec, 9% BCWorkforce 5,789 – 59% Ontario, 21% Quebec, 9% BC• The top 30 firms account for 98% of the revenuesThe top 30 firms account for 98% of the revenues• 40% exported40% exported• 63% Telecom, 13% EO63% Telecom, 13% EO
Many firms no longer are active in space.Many firms no longer are active in space. Several firms do no consider themselves a part of Several firms do no consider themselves a part of
the space industry.the space industry. Apart from earth observation, firms are usually Apart from earth observation, firms are usually
less than 25% space.less than 25% space.
ToolsTools ComponentsComponents& Services& Services IntegrationIntegration OperationOperation ApplicationApplication
SpaceSpaceSystemsSystems
TelecomTelecom
NavigationNavigation
EarthEarthObservationObservation
SpaceSpaceScienceScience
RoboticsRobotics
3
2
1
5
2
19
11
3
6
2
6
10
7
1
2
1
2
2
34
3
32
9
24
6
46
5
122413184713
Space Sector StructureSpace Sector StructureValue Chain
Sub
-Sec
tors
CityCity # # FirmsFirms
Anchor Anchor OrganizationOrganization
CityCity # # FirmsFirms
Anchor Anchor OrganizationOrganization
Toronto/WaterlooToronto/Waterloo 2828 XX SaskatoonSaskatoon 44 XX
Ottawa/KingstonOttawa/Kingston 2323 XX St. John’sSt. John’s 44
MontrealMontreal 2121 XX KelownaKelowna 22
Vancouver/VictoriaVancouver/Victoria 1212 X X EdmontonEdmonton 22
HalifaxHalifax 88 WinnipegWinnipeg 33 XX
Quebec CityQuebec City 77 XX MonctonMoncton 22
CalgaryCalgary 66 TotalTotal 122122
CSACSA
GeoidGeoid
CCRSCCRSCRCCRC
CresTechCresTech
LocationLocation““We don’t work for the region. People are here because they We don’t work for the region. People are here because they
want to live here.”want to live here.”
Location decisions are based on history and lifestyle Location decisions are based on history and lifestyle preferences. They are not business decisions.preferences. They are not business decisions.
Distance is not difficult to overcome.Distance is not difficult to overcome.• ““Really the only infrastructure that is important is communications – Really the only infrastructure that is important is communications –
especially the high speed Internet”especially the high speed Internet”
Proximity is somewhat an issue for customers: Proximity is somewhat an issue for customers: • ““Where we think it helps to be close, we put people there”Where we think it helps to be close, we put people there”
Proximity is not an issue for competitors, suppliers, Proximity is not an issue for competitors, suppliers, research.research.
There is no accounting for taste in location.There is no accounting for taste in location.
LabourLabour““The most important factor is probably the supply of The most important factor is probably the supply of
qualified people”qualified people”
Technical personnel are more likely to be sourced Technical personnel are more likely to be sourced locally. Management is more likely to be sourced locally. Management is more likely to be sourced nationally and internationally.nationally and internationally.
Turnover is very low.Turnover is very low.
LegislationLegislation““CSA placed itself in a geographically unlucky place”CSA placed itself in a geographically unlucky place”
Regional Benefits Policy.Regional Benefits Policy.• Cannot use ‘best of class’ suppliersCannot use ‘best of class’ suppliers• Playing field is not levelPlaying field is not level• Regional distribution disperses a critical massRegional distribution disperses a critical mass
Regional Agencies.Regional Agencies. Political location of the Canadian Space Agency.Political location of the Canadian Space Agency.
• Firms are not locating close-by.Firms are not locating close-by.
LabsLabs““The knowledge exchange, however, goes from us The knowledge exchange, however, goes from us
to them”to them”
Effective research is a dialogue, not technology Effective research is a dialogue, not technology transfer.transfer.
Innovation is global, not local.Innovation is global, not local.• ““Innovation has become distance insensitive”Innovation has become distance insensitive”
LearningLearning““Space is a strange market for adopting new Space is a strange market for adopting new
technologies. There is a heavy reliance on technologies. There is a heavy reliance on heritage products because of risk aversion.”heritage products because of risk aversion.”
Most learning results from interactions with Most learning results from interactions with customers.customers.
High degree of interaction with distant High degree of interaction with distant laboratories.laboratories.
Low levels of collaboration.Low levels of collaboration. Low labour mobility reduces inter-firm transfers of Low labour mobility reduces inter-firm transfers of
knowledge.knowledge. Significant training within the firm.Significant training within the firm.
LeadershipLeadership““We have a giant and lots of pimples. MDA’s We have a giant and lots of pimples. MDA’s historical approach to clustering is to stamp on historical approach to clustering is to stamp on
pimples”pimples”
Anchor organizations are not acting as cluster Anchor organizations are not acting as cluster leaders.leaders.
““We tend to complement on another more than We tend to complement on another more than compete, but we are not successful at coming compete, but we are not successful at coming together”together”
““Yes we do consider ourselves a part of a network Yes we do consider ourselves a part of a network or related firms, but not with firms in the region”or related firms, but not with firms in the region”
ConclusionsConclusions Is there a Canadian Space Is there a Canadian Space
Cluster?Cluster?
Has public policy worked Has public policy worked against the emergence of against the emergence of a cluster?a cluster?
Has the lack of a cluster Has the lack of a cluster hurt the industry?hurt the industry?
Emphatically NO –Emphatically NO –• No spatial agglomerationNo spatial agglomeration• Poor functional inter-linkagePoor functional inter-linkage
There is a national There is a national innovation systeminnovation system
Probably YESProbably YES
That is the questionThat is the question
Implications for Cluster TheoryImplications for Cluster Theory““This is a fad; it only makes sense in Ontario”This is a fad; it only makes sense in Ontario”
The space sector provides a counter-example for The space sector provides a counter-example for cluster theory.cluster theory.
Firms rationalize their decisions.Firms rationalize their decisions.
Cluster theorists find what they are looking for. Cluster theorists find what they are looking for. Correlation versus Causation.Correlation versus Causation.