This document discusses research on the impact of an anchor firm disruption on innovation clusters and regional labor markets. Specifically, it examines what happened in Waterloo, Canada's technology cluster after BlackBerry, the region's largest employer, struggled and downsized. The research uses novel data from professional social media platforms to track the career paths and mobility of former BlackBerry employees. It finds that while some became entrepreneurs in the local startup ecosystem, many talent remained in the region and were redeployed elsewhere in the regional economy, demonstrating the cluster's resilience. The document concludes with implications for policymakers regarding supporting institutions that enhance cluster dynamism and resilience during economic shocks.

1. Anchor firm disrupted: Clusters,
resilience and regional labour markets
Dr. Tara Vinodrai Dr. Ben Spigel
Associate Professor Chancellor’s Fellow & Senior Lecturer
University of Waterloo University of Edinburgh Business School
tara.vinodrai@uwaterloo.ca | @TaraVinodrai Ben.Spigel@ed.ac.uk | @ben_spigel
Presentation to the 3rd Annual Conference of the Global Forum on Productivity
Firms, Workers and Disruptive Technologies: Ensuring Sustainable and Inclusive Growth
Ottawa, Canada, June 27-29, 2018

2. AGENDA
▪ Context: Creating digital opportunity – Waterloo’s ICT cluster
▪ Studying cluster and innovation ecosystem dynamics
▪ Anchor firms, cluster resilience and regional labour markets
▪ Novel data sources
▪ Innovation ecosystems, resilience and regional labour markets?
▪ Entrepreneurship
▪ Talent mobility
▪ Conclusions and policy implications
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 2

3. CONTEXT / BACKGROUND
▪ Productivity and the geography of innovation
▪ Innovation and entrepreneurship are highy concentrated in dynamic innovation ecosystems
▪ Creating digital opportunity - SSHRC Partnership Grant led by David Wolfe
(Innovation Policy Lab, University of Toronto)
▪ Themes: Canada’s position in global production networks, Local context for global production
networks, Diffusion of IT across the economy, Digital inclusion and smart cities
▪ Our study: What happens when a cluster’s anchor firms are disrupted?
▪ Entrepreneurial start-ups and talent mobility within clusters and regional economy
▪ Novel data sources for measuring and studying cluster dynamics
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 3

4. WATERLOO
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 4
“I’m getting to know Waterloo [Region] very well, and it is clear to me
that this place is special.
It’s special for many reasons, including its collaborative culture, its
research excellence, its philanthropic visionaries and its leadership in
post-secondary education”
Stephen Hawking, Distinguished Research Chair at
the Perimeter Institute of Theoretical Physics,
Waterloo,, Canada

5. WATERLOO
Anchor firm disrupted: Clusters, resilience and regional
labour markets
PG. 5
“Recently, a New York Times reporter asked
the president of Y Combinator, a major Silicon
Valley startup funder, if any one school stood
out as a source of graduates with sparkling new
ideas … There’s one: It’s the University of
Waterloo. Canada’s University of Waterloo.”
Prime Minister Justin Trudeau,
World Economic Forum, Davos,
January 2016

6. DYNAMIC GLOBAL CLUSTERS & REGIONS: WATERLOO
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 6
Startups 2010-2016
2,699 $356.9 M
Private Investment in Tech Sector
2010-2016
Waterloo Region startups led
the last 5 cohorts at Y Combinator
RAISED
have a 5-year
survival rate83%

7. DYNAMIC GLOBAL CLUSTERS & REGIONS: WATERLOO
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 7

8. DYNAMIC GLOBAL CLUSTERS & REGIONS: WATERLOO
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 8
enterprise
wireless
software
digital display
high performance
digital imaging
satellite
communications
EdTech & learning
logistics
technology
network policy
$15,384,688,000
8 of Canada’s largest tech companies
started, grew and are headquartered
in Waterloo Region
175
Disclosed combined revenues 2013
CountriesOperating in

9. DYNAMIC CLUSTERS & REGIONS: WATERLOO
▪ Strong local leadership and civic capital
(Wolfe 2010; Nelles 2014)
▪ University role - IP policy, co-op
program (Bramwell & Wolfe 2008)
▪ Regionally-specific entrepreneurial
culture (Spigel 2016)
▪ Local industrial structure and agile firms
(Vinodrai 2015)
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 9

10. WATERLOO: BLACKBERRY AS AN ANCHOR FIRM
▪ Research In Motion (RIM) founded in
1984
▪ Wireless data technologies, focused
on hardware
▪ Introduced its first handheld mobile
smart phones in early 2000s, entry
into consumer market segment
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 10

11. BLACKBERRY: EMPLOYMENT & SHARE PRICE
0
4,500
9,000
13,500
18,000
22,500
$0
$25
$50
$75
$100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
TotalEmployment
AverageSharePrice($)
Total Employment
Average Blackberry Share Price

12. BLACKBERRY: ANCHOR FIRM DISRUPTED
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 12

13. BLACKBERRY: ANCHOR FIRM DISRUPTED
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 13
• “BlackBerry cast a huge shadow, … When
that started to shrink, it opened things
up for everyone.”
- Michael Litt, Vidyard1
• “You literally can’t walk around here
without finding some RIM or BlackBerry
experience in a company, … The struggles
are over. It’s a very resilient city.”
– Mayor Dave Jaworsky1
1 http://fusion.net/the-life-death-and-rebirth-of-blackberrys-hometown-1793845127

14. IMPACT OF ANCHOR FIRMS ON CLUSTER & REGIONAL DYNAMICS
▪ Potential impacts of anchor firm disruption
▪ New firm formation and entrepreneurship (Dynamic, entrepreneurial start-ups vs. low value
consulting?)
▪ Mobility of talent? (Enables the cluster/ecosystem or absorbed into the broader regional
economy vs. Exits the region)
▪ Limited evidence regarding economic shocks created by collapse of anchor firms
▪ Focus on loss of major manufacturing firms, less so on knowledge-based firms in dynamic
clusters
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 14

15. STUDYING CLUSTER DYNAMICS: RESEARCH APPROACHES
▪ Case studies of clusters and regional economies that emphasize the role of local
institutions and governance arrangements
▪ Large-scale, quantitative studies that examine clusters and regional dynamics
▪ Innovation surveys, Census data
▪ Limitations: Lack of longitudinal data, detailed data at the local/regional level, data quality and
availability (e.g. survey vs. Census)
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 15

16. STUDYING CLUSTER DYNAMICS: NOVEL DATA SET
▪ Social media job/career platforms offer a unique and potentially rich source of
data
▪ Individual-level data with high geographic/sectoral resolution (information on location,
employer, job titles and histories, educational attainment)
▪ Individuals incentivized to keep data accurate and up to date, especially in occupations /
industries with high labour mobility
▪ Challenges (bias, data cleaning, completeness, etc.)
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 16

17. STUDYING CLUSTER DYNAMICS: NOVEL DATA SET
▪ Few existing studies exploit similar data:
▪ Feldman and Lowe 2015 (founder career history and education)
▪ Jiang et al 2014 (career paths of credit analysts)
▪ State et al 2014 (migration of highly skilled workers)
▪ Ng and Stuart 2016 (career paths of tech entrepreneurs)
▪ Mendel 2014 (regional ‘connectedness’ and growth)
▪ Emphasis on labour markets, less attention paid to cluster performance and
regional resilience
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 17

18. DATA COLLECTION: UNIQUE DATASET
▪ Full data set:
▪ Individuals employed by Blackberry / Research in Motion (n = 5,292)
▪ Regional data set:
▪ Individuals who worked at Blackberry in Waterloo (n=1,166)
▪ Exited pre-2008 (137)
▪ Exited post-2008 (759)
▪ Still at Blackberry (182)
▪ Missing/unknown (37)
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 18

19. DATA COLLECTION: KEY VARIABLES
▪ Key analytical variables – derived through a mix of semi-automated/machine
learning and hand coding processes
▪ Employer (current) – firm size, location, industry/sector, length of tenure, part of Waterloo
tech start-up ecosystem
▪ Previous employers (5) – firm size, location, industry sector, length of tenure
▪ Experience - # of months at Blackberry
▪ Education - University of Waterloo (Y/N)
▪ Entrepreneur – based on job titles (e.g. CEO, President, (Co)Founder, Owner) (Y/N)
▪ Ecosystem – based on presence of firm in Crunchbase, founded post-2006 in Waterloo region
(Y/N)
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 19

20. CURRENT EMPLOYER - SECTOR
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 20
Sector # %
Financial services 41 5.4
Healthcare/medical services 16 2.1
Technology 594 78.3
Other 83 10.9
Unknown/not specified 25 3.3
Total 759 100.0

21. CURRENT EMPLOYER – FIRM SIZE
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 21
Firm size # %
Micro 28 3.7
Small 118 15.5
Medium 163 21.5
Large 424 55.9
Unknown/not specified 26 3.5
Total 759 100.0

22. CURRENT EMPLOYER – FIRM OWNERSHIP
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 22
Ownership # %
Waterloo 240 31.6
Elsewhere in Canada 133 17.5
International 361 47.6
Unknown / not specified 25 3.3
Total 759 100.0

23. LOCAL EMBEDDEDNESS & ENTREPRENEURIALISM
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 23
Variable %
Attended local university? 39.1
Local start-up eco-system? 25.4
Identified as a founder? 6.9

24. BECOMING ENTREPRENEURS
0
5
10
15
20
25
2009 2010 2011 2012 2013 2014 2015 2016
#ofFounders
Year Left Blackberry

25. BECOMING ENTREPRENEURS
0
5
10
15
20
25
2009 2010 2011 2012 2013 2014 2015 2016
#ofFounders
Year left Blackberry
Other parts of the economy
Local start-up ecosystem

26. BECOMING ENTREPRENEURS
0
5
10
15
20
25
2009 2010 2011 2012 2013 2014 2015 2016
#ofFounders
Other locations
Silicon Valley
Toronto
Elsewhere in Waterloo
Local start-up ecosystem

27. BECOMING ENTREPRENEURS
0
5
10
15
20
25
2009 2010 2011 2012 2013 2014 2015 2016
#ofFounders
Other locations
Silicon Valley
Toronto
Elsewhere in Waterloo
Local start-up ecosystem

28. WHERE DID THE TALENT GO?
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 28
Current location # %
Waterloo 419 55.2
Toronto 105 13.8
Rest of Canada 111 14.6
Silicon Valley 62 8.2
Seattle 9 1.2
Rest of United States 49 6.5
Rest of World 4 0.5
Total 759 100.0

29. WHERE DID THE TALENT GO?
0
20
40
60
80
100
120
140
160
2009 2010 2011 2012 2013 2014 2015 2016
#ofindivduals
Others
Silicon Valley
Toronto
Waterloo

30. WHERE DID THE TALENT GO?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014 2015 2016
Others
Silicon Valley
Toronto
Waterloo

31. WATERLOO – PARTICIPATION IN LOCAL START-UP ECOSYSTEM?
0
10
20
30
40
50
60
70
80
90
100
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Elsewhere in
regional economy
Local start-up
ecosystem

32. WATERLOO – PARTICIPATION IN LOCAL START-UP ECOSYSTEM?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Elsewhere in regional
economy
Local start-up
ecosystem

33. CLUSTER DYNAMICS & REGIONAL RESILIENCE REVISITED
▪ New firm formation and entrepreneurship?
▪ Some local firm formation, but firms no longer exist
▪ But, subsequent deployment to local start-up ecosystem
▪ Highly mobile talent recycled/redeployed into the regional economy or exits the
region?
▪ More talent remaining in the region over time >> strong role of local institutions and actors
▪ Evidence of local institution building, developing local capacity of ecosystem to absorb talent

34. LESSONS FOR POLICYMAKERS
▪ Importance of local institutions and actors that facilitate collaboration and
enhance dynamism and resilience of clusters, innovation ecosystems and regional
economies
▪ Opportunity to explore alternative data sources to measure cluster and regional
dynamics
▪ Impacts of disruptive technologies on clusters, innovation ecosystems and regional economies
▪ Potential to understand dimensions of inclusive growth and innovation
▪ Need for high quality, detailed data at the city and regional level
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 34

35. ACKNOWLEDGEMENTS
▪ Pierre Therrien, Director, Innovation Economics and Market Analysis, Strategy,
Results and Research Branch, Innovation, Science and Economic Development
(ISED), Government of Canada
▪ Social Sciences and Humanities Research Council (SSHRC) and the partners and
researchers in the Creating Digital Opportunity (CDO) partnership
▪ David Wolfe and the Innovation Policy Lab, Munk School of Global Affairs,
University of Toronto
▪ Research assistance: John Barber (UWaterloo) and Ondrej Bohdal (Edinburgh)
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 35

36. THANK YOU

37. YEARS OF EXPERIENCE @ BLACKBERRY
Anchor firm disrupted: Clusters, resilience and regional labour markets PG. 37
Years of experience # %
Co-op term 138 18.9
New to firm (<2 years) 241 33.1
Some firm experience (2-5 years) 124 17.0
Established in firm (5-10 years) 173 23.7
Embedded in firm (>10 years) 53 7.3
Total 759 100.0