Companies needed here that can scale jobs, particularly in digital sphere
It used to be that municipal managers who are responsible for local economic growth focused on attracting businesses such as outsourced call centres, back when the number of jobs created was what managers were judged on, instead of the quality of jobs.
Startup incubators have certainly proven to help take great ideas to market and create jobs. As such, the extension of the Peterborough Innovation Cluster to Kawartha Lakes was a welcome sight. Yet the lack of further supporting factors will lead to middling results.
- Encourage companies that can create jobs
There is a big difference in supporting lifestyle businesses (businesses that might only one or two people) versus businesses that can scale. Jobs created by lifestyle businesses are important but to facilitate a long-lasting job growth engine, we need to continually support ideas with potential for growth from local entrepreneurs.
- Provide the right type of capital at the right time
Getting a new business started is a risky period for investors. Investors expect to be rewarded in a way that aligns their future gains to the present risk they are taking. This is the right spot for equity funding — such as angel or seed capital. And while this funding is not going to come from the municipal government, it’s important that municipalities help to grow local angel networks. However, when a startup is ready for real growth, there is a place for municipal-level funding through venture debt. It’s really a win-win. The startup founders are not diluted further from ownership of their business and the investment risk profile fits with municipal strategies.
- Boost locally based technology skills
The world changed so fast for local businesses during the pandemic. A physical storefront without a functioning online store is not sufficient anymore. All businesses, big or small, are now enabled by key technologies such as app software and the cloud. And it’s not just about the tech skills of putting up a website. It’s about the skills to build core systems for app development and for emerging tech such as machine learning and artificial intelligence. However, the Kawartha region has virtually a complete absence of local software development talent — talent that stays in the region and would enable new local companies to grow and scale.
- Keep successful companies local
How do we keep successful companies in the region? There is little point in spending local money on companies that start up, succeed, but then leave the region, usually prior to the payoff of many new local jobs. Addressing point three above will certainly help. But there needs to be a support framework for potential local bright stars that goes beyond early incubation. That awareness needs to get to the political level early on, so these companies are identified and support programs are put in place.
Enabled by key technologies, building and operating a global business can happen anywhere, whether Lindsay, Peterborough or Fenelon Falls. Supporting factors must be in place though to see more companies start up, grow, prosper and remain local to our region.
–Brett Proud is a Kinmount-area based angel investor who also enjoys advising and mentoring local start-up companies.