How important is innovation in the Sudbury cluster? – by Dick DeStefano (Sudbury Mining Solutions Journal – August 2013)

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA)  This column was originally published in the August 2013 issue of Sudbury Mining Solutions Journal.

Often underestimated by many small and medium sized mining companies, innovation is one of the most important engines of growth. The Sudbury mining and supply cluster members have not fully embraced the value proposition that Michael Porter has clearly described as essential for success.

I have become a disciple of Porter’s business model and have diligently looked for the appropriate ingredients including leaders to grow our important mining supply and service cluster in Northern Ontario during the past 10 years.

“Michael Porter claims that clusters have the potential to affect competition in three ways: by increasing the productivity of the companies in the cluster, by driving innovation in the field, and by stimulating new businesses.

According to Porter, in the modern global economy, comparative advantage—how certain locations have special endowments (i.e., harbour, cheap labour) to overcome heavy input costs—is less relevant. Now, competitive advantage—how companies make productive use of inputs, requiring continual innovation—is more important.”

Don Duval is the new chief executive officer of the Northern Centre for Advanced Technology (NORCAT) in Sudbury and brings a number of valuable assets to our mining cluster with his formidable background in innovation, entrepreneurship and commercialization.

In a recent interview, Don shared his insights and observations, further reinforcing my belief that continual innovation will drive sustained economic and social prosperity for our region.

Dick: As part of the Ontario Network of Entrepreneurs, NORCAT serves as Sudbury’s Regional Innovation Centre partnering with community stakeholders to help start and accelerate the growth of innovative companies. How does NORCAT do this?

Don: The services that we provide to our would-be entrepreneurs, small-to-medium size companies, or larger businesses, are developed and refined based on the continual feedback from our clients. Our core services include advice and mentorship, innovation and entrepreneurship education, market research, product design, prototyping and testing, software and web development, capital, and HR services.

In addition, we have two unique assets including our Underground Technology Testing, Training, and Innovation Centre which serves as an operating mine for companies to test, demonstrate, or showcase their products.
We also have a sector agnostic incubator which is a creative and dynamic place designed for entrepreneurs to work together and share ideas to accelerate the growth of their businesses.

Dick: Do you believe Porter’s hypothesis that continual innovation is the key to the Sudbury mining cluster?

Don: Absolutely. I typically define research as turning money into knowledge and innovation as turning knowledge back into money – or simply creating value. Given the growth in global competitiveness, the rise of emerging markets, the high value of the Canadian dollar, among other variables, it is clear that for Canadian businesses to thrive and compete we need to embrace and invest in innovation.

The concept of “continual” or “incremental” innovation is important as many companies often think they need to focus exclusively on a “disruptive, game-changing” innovation. Not only does this rarely work, but also it typically only focuses on product innovation, leaving behind other critically important considerations such as process or business model innovation.

Dick: What does a community like Sudbury need to do to be successful in creating and driving a culture of innovation, entrepreneurship and commercialization?

Don: One of the privileges I’ve had in my career is that I have worked with jurisdictions around the world to help create innovation centres, incubators, innovation policy, technology transfer strategies, among others. Three key things I have learned. First, every community is different and there is no “one size fits all” strategy that will work.
Second, nearly two-thirds of all new jobs created are by small, fast growing businesses, so we need to provide an ecosystem that enables them to grow and grow faster.

Lastly, the innovation and entrepreneurship community has to be led by entrepreneurs and small-to- medium size business champions. They are the leaders in the community and everyone else is a feeder, including academic institutions, government, venture capital, and enabling organizations like NORCAT.

Feeders are critically important, but feeders are not the leaders. If you want to really understand this concept and why it’s important I would highly recommend reading Brad Feld’s book, “Startup Communities.”

Dick: How do you measure innovation?

Don: Before I answer that, I want to emphasize that innovation is not easy and it’s not supposed to be. Many companies will fail multiple times in the chaotic quest to generate value from their knowledge… and that’s OK. At NORCAT, one of our guiding principles is “listen, learn, build, measure and repeat.” In that equation, we often discover that we missed a few things so we go back and listen to our customers and start the process over again…but this time we try to do it faster and don’t make the same mistake again! I often draw the analogy that innovation is a bit of a “shots on goal game” so get it through your head right at the beginning that some companies, some projects, some initiatives will fail and die. It’s hard.

As Edison said, “genius is 1per cent inspiration and 99 per cent perspiration. With that, it is important to recognize success when it happens and I often measure innovation success by the stakeholder value that is generated. This could be as simple as revenue, jobs, investment capital, or profitability.