Taking Stock of Canada’s Superclusters

Executive Summary

The concept of cluster development has been around for quite a few years. In the 1980s, many in Quebec (for example, Marcel Côté at SECOR) advocated a cluster approach to economic development. More recently, the concept was a focus of discussion in Canada as BlackBerry’s fortunes declined, impacting Waterloo, Ont., and the sustainability of its leading engineering and IT activities. Over the years, the cases of Silicon Valley, Boston, and Austin, Texas, became models of cluster development. In the European Union, cluster development has a long history, with a range of initiatives in different countries and a secretariat imbedded in the European Commission.

Countries around the world have upped their game on cluster development. Many states in the U.S. have pursued a Michael Porter–type approach to clusters, recognizing that the activities of Silicon Valley and the northeast corridor represent 25 percent of U.S. gross domestic product (GDP). In Norway, it has created national, regional, and local cluster initiatives. Other cluster examples include Eindhoven in the Netherlands, with Philips at its centre; investment banking in Manhattan; and winemaking in Napa Valley, Calif.

The case for Superclusters is all about finding new solutions to Canada’s continuously deteriorating innovation problems. This cannot be emphasized enough and explains why Superclusters were a signature initiative of a new Innovation and Skills Plan in 2015. Specifically, it was recognized that the long-standing way of promoting innovation in Canada—by using R&D tax incentives, maintaining a strong macroeconomic framework, and relying on supply-side supports for science and universities—was not working. Alarmingly, Canada was falling further behind in all measures of the global innovation and technology race—both in areas where it had traditionally been strong, as in government investment in science, and where it had always been a laggard among Organisation for Economic Co-operation and Development (OECD) countries, as in commercialization and business investment in R&D. Just doing the same old things would be very costly in terms of innovation and productivity performance.