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Cities and Communities that Work: Innovative Practices, Enabling Policies



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Cities and Communities
that Work: Innovative
Practices, Enabling Policies
Neil Bradford
Discussion Paper F|32
Family Network
June 2003
Canadian Policy Research Networks Inc. (CPRN)
600 – 250 Albert Street, Ottawa, Ontario K1P 6M1
Tel: (613) 567-7500 Fax: (613) 567-7640
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Cities and Communities that Work:
Innovative Practices, Enabling Policies
Neil Bradford
© 2003 Canadian Policy Research Networks Inc.
Foreword .................................................................................................................................... iii
Executive Summary .................................................................................................................. v
Boxes and Tables ....................................................................................................................... ii
Part 1. Community-Based Innovation in a Global Age ................................................... 1
1.1 Introduction: Innovative Practices and Local Places ...................................... 1
1.2 Community-Based Innovation: Towards a New Paradigm ............................ 5
1.3 The Building Blocks of Community-Based Innovation .................................. 9
1.4 Community-Based Innovation as a Social Learning Process .......................... 11
Part 2. Case Studies of Community-Based Innovation .................................................... 13
2.1 Revitalizing Rural and Remote Communities ................................................. 14
Growing the Silicon Vineyard: Kelowna, British Columbia .......................... 14
Broadband and Beyond: Meadville, Pennsylvania ......................................... 18
A Resilient Cluster: North Jutland, Denmark ................................................. 21
From Localized Production to a Technoregion: The Beauce, Quebec .......... 26
2.2 Renewing Industrial Cities ............................................................................... 30
Civic Alliances: Pittsburgh, Pennsylvania ..................................................... 30
Cultural Clustering: Bilbao, Spain ................................................................. 35
Economic Development Partnerships: Halifax, Nova Scotia ......................... 38
Institutionalizing Social Partnerships: Dublin, Ireland ................................. 43
2.3 Building Knowledge-Intensive Regions .......................................................... 47
Making Regional Connections: Kitchener-Waterloo, Ontario ....................... 47
Towards Inclusive Clusters: Saskatoon, Saskatchewan ................................. 52
Regional Planning and Community-Building: Portland, Oregon .................. 56
2.4 Conclusion ....................................................................................................... 60
Part 3. Community-Based Innovation: Lessons and Implications .................................. 64
3.1 Common Patterns ............................................................................................. 64
3.2 Variations on the Theme .................................................................................. 65
3.3 Putting in Place the Building Blocks ............................................................... 66
3.4 Lessons for Moving Ahead .............................................................................. 67
3.5 Conclusion ....................................................................................................... 69
Bibliography ........................................................................................................................... 71
Our Support ........................................................................................................................... 83
Boxes and Tables
Box 1. Defining Innovation: Different Perspectives ...................................................... 4
Table 1. Case Selection ...................................................................................................... 13
Table 2. Growing the Silicon Vineyard ............................................................................. 15
Table 3. Broadband and Beyond ........................................................................................ 19
Table 4. A Resilient Cluster ............................................................................................... 22
Table 5. From Localized Production to a Technoregion ................................................... 27
Table 6. Civic Alliances ..................................................................................................... 31
Table 7. Cultural Clustering ............................................................................................... 35
Table 8. Economic Development Partnerships .................................................................. 39
Table 9. Institutionalizing Social Partnerships .................................................................. 43
Table 10. Making Regional Connections ............................................................................. 48
Table 11. Towards Inclusive Clusters .................................................................................. 53
Table 12. Regional Planning and Community-Building ...................................................... 57
Table 13. Revitalizing Rural and Remote Communities ..................................................... 61
Table 14. Renewing Industrial Cities ................................................................................... 62
Table 15. Building Knowledge-Intensive Regions .............................................................. 63
Because the new political focus on urban policy in Canada has been primarily directed to the big
city regions (Toronto, Montreal, Vancouver and Calgary-Edmonton), smaller communities
sometimes fear they will be ignored. Yet they too are being challenged by the economic and
social forces unleashed by new technologies and globalization. They too have no choice but to
innovate in order to help local businesses, social agencies and governments begin to apply the
best ideas to address emerging problems.
This paper tells the stories of 11 small and medium cities in Canada, the United States and
Europe that have made dedicated and creative efforts to turn local assets into a community-wide
strategy for economic renewal and a better quality of life. Each one, in its own way, is trying to
overcome inadequate local problem-solving capacities to create what the author, Neil Bradford,
calls learning communities.
Bradford tells us that learning communities do not just “pop up anywhere.” They are carefully
constructed by the political will of local champions and institutional intermediaries, people who
can mobilize multiple actors locally and in senior governments.
Canada has much to learn from European and American case studies where local innovations
have been systematically pursued for some time. Federal and provincial governments in Canada
are still, by and large, “disjointed” in their response to urban issues. By adopting a more
flexible, multi-level governance they could do much to help local initiatives gain real
momentum. In doing so, they could also encourage more of Canada’s small- and medium-size
cities (as well as the biggest ones) to begin their own voyage of community-based innovation.
I want to thank Neil Bradford, who is a professor of Political Science at Huron University
College of the University of Western Ontario, and Jane Jenson, Director of the Family Network
at CPRN and her team, two independent reviewers, and those who participated in a roundtable to
discuss the first draft of this paper. I also want to acknowledge the role of Industry Canada in
funding this project. Together they have created an exercise in shared learning that will inform
innovation and urban policy from St. John’s to Prince George.
Judith Maxwell
June 2003
Executive Summary
Two decades of economic restructuring, the globalization of competition, and rapid
technological change have combined to create a world of great uncertainty and complexity. Not
surprisingly, governments and citizens now place a premium on generating new knowledge to
tackle unfamiliar problems. The need to replace inefficient, unsustainable practices with
intelligent, responsible ones crosses organizational boundaries. Simply put, innovation –
applying the best ideas in a timely fashion to emergent problems – is an urgent priority in the
private, public and voluntary sectors.
Most obviously, firms competing in the global marketplace seek ways to bring higher quality,
lower cost products to the marketplace before the competition. But today, the importance of
innovation extends well beyond the economy and the workplace. Many of society’s greatest
challenges – from achieving ecological balance to creating meaningful employment for all
citizens – equally demand new thinking, organizational creativity, and institutional adaptation.
Nonetheless, the notion of innovation itself is contested. This Discussion Paper takes a broad
view of what constitutes desirable innovation. It focuses on collaborative processes among
diverse actors that produce integrative or holistic understandings of challenges and potential
solutions. These processes can occur in fields other than the economic, and involve
breakthroughs beyond the introduction of new products to the marketplace by firms. Indeed,
progress resulting from such innovative practices may be monitored, over the longer term, along
a variety of dimensions including: enhanced planning capacities in communities that balance the
needs of the natural and built environments, greater participation in the knowledge-based
economy for all citizens, and more robust democratic engagement through citizen involvement in
electronic networks.
It comes as no surprise to find Canadian cities are “back on the policy agenda.” A host of recent
policy reports from academics, research institutes, political parties and even banks are making
new connections between seemingly intractable national problems – for example, declining
economic productivity, growing income inequality or environmental degradation – and the
absence of robust problem-solving capacities in our cities and communities. Many governments
are now searching for an “urban policy lens” whereby national and provincial frameworks are
informed by local knowledge and implemented in partnership with community-based
At the same time, growing attention is being paid to the need for local actors themselves to
develop their own strategies for success in the global era. Indeed, a growing body of Canadian
and international policy research finds that those cities, large and small, that demonstrate an
institutional capacity to engage diverse actors in collaborative planning processes are also the
most adaptive and innovative. Such places are today’s learning communities, so named because
they provide the right context – institutional, organizational, and attitudinal – for upgrading their
economy and for improving the quality of life and living standards of their residents.
Research also shows that learning communities do not just pop up anywhere. Geographic
proximity and spatial clustering only set the stage for an innovation milieu. Progress follows in
those cities and communities that build on the latent advantages of urbanization. Acquiring
better knowledge of how such communities position themselves for success is thus a pressing
concern for policy makers at all levels of government, from the local to the supra-national.
To that end, this Discussion Paper surveys the burgeoning cross-national case study literature
that now exists on community-based innovation. The goal is to take stock of these diverse
experiences about how local actors, in partnership with others, enhance their capacity for
working towards sustainable development, and to present the key findings about innovative cities
and regions in a more systematic fashion than is presently available.
To achieve this goal, the paper is organized into three parts. The first part clarifies the meaning of
community-based innovation and explores the larger historical and contemporary forces that are
driving the “local turn” in governance and public policy. While studies of community-based
innovation make clear that there exists no single model or cookie cutter approach to making
change, it is also the case that certain key ingredients can be identified. The literature stresses
seven building blocks in successful community-based innovation: (1) the emergence of local
champions, (2) the formation of institutional intermediaries, (3) a commitment to equitable
participation, (4) a civic culture of creativity, (5) the provision of financial and technical resources,
(6) robust accountability mechanisms, and (7) development of indicators to benchmark progress.
Finding these seven building blocks in any city or community that is attempting revitalization is
far from guaranteed, and the Discussion Paper argues that their presence reflects a dynamic local
interplay of three forms of social learning: civic, administrative, and policy.
The second and largest part of the Discussion Paper carries these conceptual matters to a
profiling of innovation dynamics in 11 cities in Canada, Europe and the United States. The focus
is on mid-sized cities and smaller communities that have already gained some recognition and
scholarly attention for their creative responses to today’s challenges. Rather than rehearsing the
by now rather familiar stories of the world’s “high technology hot spots” or “global cities,” our
concern is to draw policy lessons from various “second tier” local places, less well-studied but
representative nonetheless of much contemporary urban experience and community dynamics.
The cases are sorted into three general categories reflecting the type of challenges faced. In rural
or remote communities (Kelowna, British Columbia; Meadville, Pennsylvania; North Jutland,
Denmark; and Beauce, Quebec), innovation challenges focus on diversification of traditional
economic bases, while also reversing negative demographic flows to sustain a critical mass of
local knowledge workers and entrepreneurial talent. In the older industrial centers (Pittsburgh,
Pennsylvania; Bilbao, Spain; Halifax, Nova Scotia; and Dublin, Ireland), innovative practices
revitalize or even replace an ageing manufacturing base. Specific priorities include regenerating
central business districts, making new use of vacant or derelict lands, and forging a shared vision
across metropolitan spaces from inner cities to outer suburbs. In the geographically dispersed
regions seeking to build knowledge-intensive clusters (Kitchener-Waterloo, Ontario; Saskatoon,
Saskatchewan; and Portland, Oregon), innovation demands building institutional capacities for
rapid and full deployment of new information and communications technologies. Specific
priorities include networking between research institutes and small business, the coordination of
municipal resources at the regional scale, and “smart growth” land use planning.
The third and final part of the paper draws together the conceptual discussion in Part 1 and what
has been learned from the case studies in Part 2. We highlight both the basic commonalties or
shared characteristics of all the innovating places, and salient points of difference among them.
The most basic point of convergence is the effort to “build from within.” That is, in these places,
local actors were searching for, and experimenting with, development models that aimed to grow
local assets – ranging from global business clusters and leading edge workforce skills, to
inclusive neighbourhoods with well-preserved built and natural environments. The general
dynamics of innovation were the same, combining bottom-up strategies with top-down support
from higher levels of government. Further, the mechanism or vehicle for planning and
implementing change took a similar form: public-private partnerships that supplied an
infrastructure for collaboration, learning, and investment. Such partnerships were typically
anchored institutionally in dedicated agencies or bodies with the visibility and legitimacy to
coordinate input from the public, private and voluntary sectors.
The cases also pointed to another positive dynamic of the community-based approach. The very
process of convening multistakeholder networks at the local level, where different players have
an opportunity to learn from one another, generated its own synergies and momentum. Simply
put, there were a number of instances of positive spin-offs: success in solving one problem fed
into progress on another. In some cases, the synergies were evident over time as effective
mobilization in one era set the stage for progress in subsequent rounds. In other cases, the
effects were more immediate, as the same actors made “real time” connections across projects,
for example, between brownfields redevelopment and environmental renewal, or regional
technology business networks and employment outreach to distressed neighbourhoods.
Of course, the specific achievements of the community-based processes varied in accordance
with local priorities and conditions. Moreover, each of the national systems created its own
context for local initiatives. Community-based innovation is enabled or constrained, and
channeled down particular paths, in relation to policies and institutions at higher levels of
government. Here the Canadian cases sit somewhere between the European and American
“models.” Federal and provincial governments have been more engaged than their American
counterparts in all the cities and communities through a number of financial and regulatory
instruments. At the same time, this policy support, in comparison to the European experience,
lacks the focus and funding to really make a difference. The OECD’s recent “territorial review”
of Canadian policies and practices described a “disjointed approach” to community-based
innovation. The Canadian cases reviewed in our Discussion Paper are consistent with this
assessment. For the most part, federal and provincial governments have not fully appreciated the
interdependence of economic and social investments in building strong communities.
There are lessons for policy actors at all levels of government. Here it is important to underscore
that if the community-based paradigm is to generate sustainable innovations, the process must
not involve the “hollowing out” or dismantling of national state capacity. Rather the goal is
multi-level governance that allocates roles and responsibilities in relation to the comparative
advantage of each government in contributing to community-based innovation. Municipalities
are best able to convene the actors for partnerships, to undertake land use and development
planning for inclusive urban and metropolitan spaces, and to work with other local authorities –
school boards, band councils, social service agencies, and so on – to secure upper level policy
support and ensure its fit with local conditions.
For their part, provincial, federal and supranational governments are all variously equipped to
supply resources to local actors for building the infrastructure and relationships of the learning
community. They can also facilitate inter-local sharing of experiences by sponsoring the
“scaling-up” of community demonstration projects and by transferring best practice lessons from
one locale to another. And their financial and regulatory tools are indispensable for preventing
territorial disparities in social services or “beggar thy neighbour” investment competition
between localities. Linked directly to issues of local financing is accountability for monies
transferred to community-based partnerships. A balance must be maintained between local
responsiveness and autonomy, and sound reporting protocols for public funds transferred from
Community-based innovation remains everywhere a “work in progress.” Fortunately, Canadian
policy communities are now well positioned for just such work. There is much to be learned
from European and American experiences, where local innovations have been pursued more
systematically and for a longer period of time. These lessons, appropriately contextualized, can
inform recently launched Canadian initiatives. The three levels of government and their
community partners are currently collaborating in cities and regions across the country on
various initiatives, ranging from urban development agreements to municipal green funds and
strategies to combat homelessness. These are promising departures, worthy of careful study and
further policy support.
Key Words: cities, communities, innovation, local economic development, public-private
partnerships, urban governance, multi-level collaboration
Cities and Communities that Work: Innovative Practices, Enabling Policies 1
Part 1. Community-Based Innovation in a Global Age1
The combination of economic, demographic, technological, and political change is
cumulative, and will continue to impact the social order. No society encapsulates this
transformation more than urban society. Cities are crucibles through which radical
experiments become convention. They are concentrated environments in which
people adapt and their resilience is tested. They are the world’s incubators of
innovation – made possible by critical mass, diversity, and rich interaction.
– Savitch and Kantor (2002: 3)
The range of recent urban innovations is impressive, including a massive expansion
of education and research opportunities, a high concentration of “new economy”
firms, economic development strategies to exploit historic and cultural assets, the
regeneration of brownfields, long-term plans to improve urban infrastructures,
“smart growth” policies to limit greenfield development, and integrative approaches
to the problems of social distress. – OECD (2002a: 20)
1.1 Introduction: Innovative Practices and Local Places
Two decades of economic restructuring, the globalization of competition, and rapid
technological change have combined to create a world of great uncertainty and complexity. Not
surprisingly, governments and citizens now place a premium on generating new knowledge to
tackle unfamiliar problems. The need to replace inefficient, unsustainable practices with
intelligent, responsible ones crosses organizational boundaries. Simply put, innovation –
applying the best ideas in a timely fashion to emergent problems – is an urgent priority in the
private, public and voluntary sectors.
Most obviously, firms competing in the global marketplace seek ways to bring higher quality,
lower cost products to the marketplace before the competition. But today, the importance of
innovation extends well beyond the economy and the workplace. Many of society’s greatest
challenges – from achieving ecological balance to creating meaningful employment for all
citizens – equally demand new thinking, organizational creativity, and institutional adaptation.
Indeed, the concept of innovation itself remains contested (Bradford, 2002a; Torjman and
Leviten-Reid, 2003a). Widespread agreement across policy communities on the general
importance of change and adaptation is matched by the degree of controversy that emerges when
it comes to specifics (see Box 1). Innovations lauded from an economic perspective for their
contributions to growth are often rejected, or at least significantly qualified, by others who
observe how the new production processes render certain skills obsolete, make working
conditions more hazardous, or entail destruction of the physical environment.
1The author wishes to thank Caroline Beauvais for her research assistance and Jane Jenson, Fred Gault, Judith
Maxwell, and two CPRN reviewers for their helpful comments on an earlier draft. Any errors of fact and all
interpretations are the author’s responsibility alone.
2 June 2003 Canadian Policy Research Networks
It follows that today’s challenge is to innovate in ways that promote simultaneous progress on
economic, social, and environmental goals (Polèse and Stren, 2000). Innovating for sustainable
urban development bridges social and economic divides while maintaining healthy physical
environments. A recent study of the “urban renaissance” by the Organisation for Economic Co-
operation and Development (OECD) states: “These are not separate and independent objectives,
nor do they involve trade-offs, meaning that progress on one must be compromised in order to
make progress on the other. Rather, they call attention to the interdependencies among the
economic, social, and environmental aspects of cities” (OECD, 2002a: 17). As Canadian
Industry Minister Allan Rock observed recently: “Innovation is about creating, but creativity
cannot flourish in communities where we struggle to meet the basic needs of our citizens, like
affordable housing, modern infrastructure, and clean air. Communities, he concluded, “are at the
heart of the innovation agenda” (Rock, 2002: 3-4).
For these reasons, this Discussion Paper takes a broad view of what constitutes desirable
innovation. It focuses on collaborative processes among diverse actors that produce integrative
or holistic understandings of challenges and potential solutions. These processes can occur in
fields other than the economic, and involve breakthroughs beyond the introduction of new
products to the marketplace by firms. Indeed, progress resulting from such innovative practices
may be monitored, over the longer term, along a variety of dimensions including: enhanced
planning capacities in communities that balance the needs of the natural and built environments,
greater participation in the knowledge-based economy for all citizens, and more robust
democratic engagement through citizen involvement in electronic networks.
But what factors or processes make possible such integrated approaches to change? How are
capacities built for innovating in sustainable ways? In response to these important questions, a
growing body of Canadian and international policy research is now converging around four
fundamental observations (Donald, 2001; Bradford, 2002b).
1. Sustainable forms of innovation depend on collaboration that taps the ideas of many people
and engages the commitment of different organizations each with its own specialized
expertise and responsibilities.
2. This type of collaboration requires social learning processes that continuously circulate
ideas, share experiences, and transfer know-how. Through such networked relations all
actors learn more and faster about the possibilities for constructive change.
3. These learning processes take their most dynamic form in specific geographic settings.
Cities, with their population density, demographic diversity, organizational synergy and rich
interaction, constitute the ideal setting for social learning, and thus for innovating in
sustainable ways.
4. Innovative cities and regions are those places that organize themselves to make the most of
their local assets. They demonstrate an institutional capacity to engage civic, business,
social, and intellectual leaders in implementing strategies that enhance the quality of life for
all members of the community.
This renewed attention to cities and local places is in some measure unexpected. Only a few
years ago, conventional wisdom about globalization and the “new” economy predicted the death
Cities and Communities that Work: Innovative Practices, Enabling Policies 3
of distance through the “locationless” effects of virtual communications and instantaneous
transactions (O’Brien, 1992; Cairncross, 1997). However, even as the world becomes more
integrated economically and culturally, scholars and analysts continue to track an increasing flow
of people and commerce into cities and other communities that demonstrate some important
urban characteristics (Gertler, 2001).
Underpinning this local revival is the strategic importance of social learning to all manner of
innovation, from new technologies for business to new mechanisms for bridging cultural
differences. More than virtual relations in cyberspace, such breakthroughs depend on repeated
face-to-face contact as ongoing, in-person discussion builds trust and leads to a common
understanding of viable solutions. In a globalized and wired world where formal, codified
knowledge is readily available almost anywhere, it is the informal sharing of “tacit knowledge”
that makes the difference in tackling multi-faceted problems (Holbrook and Wolfe, 2002;
Storper, 1997). Personalized and repeated interactions among diverse knowledge holders, which
are possible only in specific locales, can produce insights that add unique value to standardized
processes or contractual relations (Sabel et al., 2000).
Thus, learning communities are today’s pivotal sites of innovation. They are the urban spaces,
both large and small, that provide the right institutional base and cultural context for upgrading
the economy and for improving quality of life and living standards for the population. Learning
communities find ways to mobilize the collective wisdom of their local resources: businesses;
educational and research institutes; trade unions; social movements; policy experts; government
officials; and engaged citizens from all walks of life.
But learning communities do not just pop up anywhere. Geographic proximity can only set the
stage for an innovation milieu. Progress follows in those cities and communities that build on
the latent advantages of urbanization (Saxenian, 1994; Florida, 2002). Acquiring better
knowledge of how such communities position themselves for success is thus a pressing concern
for policy makers at all levels of government, from the local to the supra-national.
To that end, this Discussion Paper surveys the burgeoning cross-national case study literature
that now exists on community-based innovation. The goal is to take stock of these diverse
experiences about how local actors, in partnership with others, enhance their capacity for
working towards broad-based sustainability, and to present the key findings about innovative
cities and regions in a more systematic fashion than is presently available.
To achieve this goal, the paper is organized into three parts. The remainder of this section
outlines the evolution of community-based innovation and explores the basic issues that are
driving the “local turn” in governance and public policy. Seven fundamental building blocks for
innovation are also identified. Finally, community-based innovation is explained in the context
of social learning processes.
4 June 2003 Canadian Policy Research Networks
Box 1
Defining Innovation: Different Perspectives
The concept of innovation has been variously defined by public policy communities. For some analysts,
innovation refers only to the technology activities of firms in developing new processes or bringing new
products to market. For others, innovation is a broader concept, involving a diversity of actors experimenting
with holistic approaches to change that integrate economic, social, and environmental challenges, and
expressing a civic culture of creativity.
A sampling from leading analysts and organizations conveys the range of approaches to innovation, from the
more narrowly technological to broader meanings:
The OECD and Eurostat (Oslo Manual): Technological product and process (TPP) innovations comprise
implemented technologically new products and processes and significant technological improvements in
products and processes. A TPP innovation has been implemented if it has been introduced on the market
(product innovation) or used within a production process (process innovation). TPP innovations involve a
series of scientific, technological, organisational, financial and commercial activities. The TPP innovating firm
is one that has implemented technologically new or significantly improved products or processes during the
period under review. The minimum entry is that the product or process should be new (or significantly
improved) to the firm (it does not have to be new to the world) (OECD/Eurostat, 1997: 47).
Canada’s Innovation Strategy: What does innovation mean? It means coming up with new ideas about how
to do things better or faster. It is about making a product or offering a service that no one had thought of
before. It is about putting new ideas to work in our businesses and industries and having a skilled work force
that can use those new ideas. And it is about aggressively pursuing new markets for Canada’s products and
services. Innovation is not just the job of government or the private sector. Innovation is everybody’s business
(Government of Canada, 2002b: 3).
The Canada25 Network: [Canada needs] to think broadly about innovation across all sectors of society;
social innovation to build a fair and equitable society; economic innovation to foster investment; policy
innovation to solve the challenges of our demographic profile; and cultural innovation to strengthen our national
pride.… If innovation is only conceived and communicated as science and technology policy, we will lose the
interest and commitment of the many Canadians who undertake leading-edge work in other industries and
sectors.… [Canada needs] “a culture of innovation”: A culture where all Canadians feel empowered to
constantly find new methods of addressing and improving upon the challenges they face in their particular
sphere of life, whether that be scientific research, business, politics, community affairs of any other realm. It
also means that Canadians must feel confident that their communities will respect, support and promote
ingenuity in its many facets. In short we believe that Canada must strive to be a community of creative
thinkers, one where new ideas and approaches are held in the highest regard (Canada25, 2003: 2-3).
Collaborative Economics and US Economic Development Administration: Technological innovation is a
primary driver of economic development, regionally and nationally. However, success in business and in
economic development requires innovation in areas beyond technology. This process represents the act of
making purposeful, strategic changes that lead to greater value added and productivity, whether in business,
education or government. Innovation includes (but is not limited to): technology, the creative application of new
technologies developed elsewhere, more effective approaches to workforce development, new ways of relating
within and across organizations, and thoughtful shaping of industrial infrastructure. It can lead to a series of
incremental improvements that add up over time, and it can also result in rapid, radical change. It may involve the
creation of a whole new way of doing things, or the creative adaptation of a model used elsewhere. Successful
innovation brings together and integrates creative ideas from various realms of technology, workforce, and
organizational development, from within and across organizations. Thus, a focus on technology alone is
insufficient for competitiveness (Montana et al., 2001: 7).
Judith Maxwell, President, Canadian Policy Research Networks Inc.: It is not a question of either the
economic model or the social model of innovation. It is a question of both economic and social.… Innovation
is, fundamentally, a social process that supports good science, strong productivity growth, and a more inclusive
society (Maxwell, 2003: 16).
Cities and Communities that Work: Innovative Practices, Enabling Policies 5
Given this backdrop, the second and largest part of the paper carries these conceptual matters to
a profiling of the innovation process in 11 cities in Canada, Europe and the United States. Our
focus is on mid-sized cities and smaller communities that have gained some recognition or
attention for their creative responses to today’s challenges. Rather than rehearsing the by now
rather familiar stories of the world’s “high technology hot spots” or “global cities,” our concern
is to draw policy lessons from various “second tier” local places, less well studied but
representative nonetheless of much contemporary urban experience and community dynamics.
As the American-based Collaborative Economics research team explains:
The capacity to innovate is not just for technology hot spots like Boston, Austin and
Silicon Valley. It is relevant to any region that sees the importance of building the
capacity for continuous reinvention, which is needed to keep pace in today’s rapidly
changing world. Since no community – rural or urban – is immune from the forces of
the global economy, it is important to explore the different ways to build this capacity
(Montana et al., 2001: 9).
We have sorted the cases into three general categories reflecting the type of challenges they face
– as rural or remote communities in need of revitalization, as industrial cities in need of renewal,
or as geographically dispersed regions seeking to build a cohesive knowledge cluster.
The third and final part of the paper draws together the conceptual discussion in Part 1 and what
has been learned from the case studies in Part 2. The analysis points to similarities and
differences across space, and brings into focus the factors contributing to successful innovation
in different types of places. The paper concludes by identifying the key policy lessons to help
chart the way forward.
1.2 Community-Based Innovation: Towards a New Paradigm
All the attention now being paid to local places and learning communities reflects a growing
recognition of the significant limits to “urban visions” embedded in the postwar era’s dominant
policy paradigms of first Keynesian welfarism and then neo-liberalism (Bradford, 2002b). As
numerous studies have shown, governments adopting these paradigms in Canada, and more
generally across the OECD, failed to appreciate fully either the potential for local actors to
innovate, or their own policy role in facilitating such community-based action (Sabel, 2001;
Jenson, 2001; Magnusson, 1996). Both Keynesianism and neo-liberalism, for all their other
substantive differences, converged in a preference for centralized policy development and top-
down policy implementation. Federal and provincial governments in Canada have generally
combined rigid programming in departmental silos with reliance on unilateral policy shifts that
more often than not left municipal officials scrambling to meet new mandates, or take up entirely
new responsibilities (Lidstone, 2001; Seigel 2002).
Indeed, one close observer of relations between upper level governments and Canadian
municipalities recently encapsulated decades of interaction in terms of the “shame” in “ignoring
the cities” (Andrew, 2001: 100). For its part, the Federation of Canadian Municipalities
continues to lament “the culture of non-recognition and neglect” city representatives encounter in
their many dealings with federal and provincial officials (Federation of Canadian Municipalities,
6 June 2003 Canadian Policy Research Networks
2001a). Charles Sabel and Rory O’Donnell usefully captured the essential dynamic prevailing
across the Keynesian and neo-liberal eras in the OECD: “Viewed from the local problem-
solving units, the central government seems indispensable as an ally in the consolidation of
nascent innovations, but capriciously unreliable as an ally in its ignorance of local circumstance
and its own potential to foster development” (Sabel and O’Donnell, 2001: 67)
Yet, there is now mounting evidence in Canada that these attitudes and practices are beginning to
change. A host of policy actors, ranging from banks to research institutes and political parties,
are drawing new connections between seemingly intractable national problems – for example,
declining economic productivity or growing income inequality – and the absence of problem
solving capacity in our cities (Prime Minister’s Caucus Task Force on Urban Issues, 2002; TD
Economics, 2002; Vander Ploeg, 2002). As the TD Economics study A Choice Between
Investing in Canada’s Cities or Disinvesting in Canada’s Future concluded: “it is becoming
overwhelmingly apparent that the long-term performance of the Canadian economy and
Canadian living standards will hinge on the fortunes of our cities … however, Canada’s cities
face certain threats that, if left untended, could choke off economic expansion and gains in living
standards down the road” (TD Economics, 2002: 4, 9, emphasis in original).
The connecting of persistent macro-level problems to the absence of micro-level resources
reflects, in turn, growing awareness of what the public policy literature describes as wicked
problems (Paquet, 1999). With their inherent complexity, these problems are resistant to
traditional monosectoral interventions designed and delivered from above by insulated federal or
even provincial bureaucracies. As Gilles Paquet and others emphasize, wicked problems are
characterized by critical information gaps about what precisely is required to help, and large
coordination failures in terms of channeling the appropriate resources to the right target (Sabel,
2001). As such, they demand “place sensitive” modes of policy intervention and programming:
that is, strategies constructed with local knowledge informed by the particular circumstances on
the ground, and delivered through multisectoral, horizontal networks crossing functional
boundaries or program silos (Clutterbuck and Novick, 2002; Jenson and Mahon, 2002).
Significantly, more and more policy problems seem to be characterized by just such wicked
features. For example, federal labour market training programs that fail to take into account the
potential barriers to participation when communities cannot supply adequate child care or public
transit are likely to produce sub-optimal results, as they exclude some of the most important
potential users (Dreier, Mollenkopf, and Swanstrom, 2001: 60-61). By a similar logic, provincial
policy for environmental protection can be undermined by municipal development plans that
sprawl into farmlands and greenspace and increase the need for private automobile commuting
(Slack, 2002). And national immigration policy, cut off from full understanding of the
settlement and adjustment challenges for newcomers in their local communities, is a recipe for
trouble (Papillon, 2002).
In each of these matters, the overarching message is clear: it is often in cities that today’s
increasingly wicked problems are most visible and, further, it is only by engaging local actors
themselves that durable and legitimate solutions can be found. Sustainable innovations flow
from networked relations that include a broad cross-section of state and societal actors in
learning what works in a particular place and how to make it happen. Moreover, creative policy
Cities and Communities that Work: Innovative Practices, Enabling Policies 7
synergies in problem solving emerge locally: a more compact urban form not only facilitates the
frequent face-to-face interactions that drive economic innovation, but it also helps reduce the
“spatial mismatch” between people and training or jobs, while simultaneously helping to
preserve greenspace and air quality.
These new understandings provide the foundations for an emerging policy paradigm of
community-based innovation. In capturing problem interdependence and local policy
intelligence, this paradigm transcends the key “urban blindspots” of Keynesian welfarism and
neo-liberalism. A double shift is envisioned in relation to the established policy architecture:
(1) a decentralization or devolution of policy capacity downward from the central state, and
(2) an outward flow of authority at the local level from government to private and third sector
actors (Cooke and Morgan, 1998: 23). New networks of “associative governance” are
constructed where representatives learn the skills of social partnership and collaborative problem
solving (Bradford, 1998). Planning theorist Patsy Healey outlines the case:
Collaborative efforts in defining and developing policy agendas and strategic
approaches to collective concerns about shared spaces among the members of
political communities serve to build up social, intellectual, and political capital
which becomes a new institutional resource. It generates a cultural community of its
own, which enables future issues to be discussed more effectively, and provides
channels through which all kinds of other issues such as recognition of the adverse
social consequences of new economic tendencies, or knowledge about economic
opportunities, or ways to reduce behaviours which are harming biospheric
sustainability, may be more rapidly understood and acted upon. In this way, such a
collaborative cultural community focused on the governance of local environments
should also help to recreate a public realm (Healey, 1997: 311, emphasis in original).
It is critically important to underscore that if the community-based paradigm is to generate
sustainable innovations, or to recreate the public realm as Healey envisions, the process must not
involve the “hollowing out” or dismantling of national state capacity (Jessop, 1997;
Swyngedouw, 1997). The community-based paradigm involves much more than a simple
recycling of older forms of “municipal boosterism” that celebrated narrow business-government
alliances in the single-minded pursuit of the fastest possible property development (Magnusson
and Sancton, 1983). Equally, it is different from the popular form of public-private partnership
known as “3Ps,” that often amount to little more than the sale or transfer of public services and
infrastructure to the private sector in the service of government downsizing or cost reduction
(Bradford, 2003).
Unlike either of these decentralizing and localizing forms, the community-based innovation
paradigm stresses that upper level governments remain active and engaged in joint problem
solving, albeit in new ways that better balance their “nationwide aspatial policies” with
interventions strategically targeted to local places (Séguin and Divay, 2002; Sancton, 2002). The
process is one of vertical collaboration across levels of government. In the words of the OECD:
“National policies are increasingly important, not only to provide better framework conditions
for local initiatives, but also and especially to take better account of the many sectoral and
macroeconomic policies and instruments which have a territorial impact” (OECD, 2002a: 21).
8 June 2003 Canadian Policy Research Networks
Such multi-level governance allocates roles and responsibilities in relation to the comparative
advantage of each government in contributing to community-based innovation. Municipalities
are best able to convene the actors for partnerships, to undertake land use and development
planning for inclusive urban and metropolitan spaces, and to work with other local authorities –
school boards, band councils, social service agencies, and so on – to secure upper level policy
support and ensure its fit with local conditions (Torjman and Leviten-Reid, 2003b). In contrast,
provincial, federal and supranational governments are all variously equipped to supply resources
to local actors for building the infrastructure and relationships of the learning community (Jenson
and Mahon, 2002). Their financial and regulatory tools are indispensable for preventing
territorial disparities in social services or “beggar thy neighbour” investment competition
between localities. They can also facilitate inter-local sharing of experiences by sponsoring the
“scaling-up” of community demonstration projects and by transferring best practice lessons from
one locale to another.
Of course, this community-based approach, with its emphasis on local capacity building and
collaborative relations across governments, is still some distance from actual policy practice in
Canada (Clutterbuck and Novick, 2002). Indeed, the same policy analysts who now routinely
connect the persistence of macro-level problems to the absence of micro-level capacities also
lament a decade of fiscal offloading, program downloading, and heavy-handed amalgamations.
They recognize that these measures, whatever their other merits, have effectively stretched local
resources to the breaking point, and left municipalities in no position to invest in the social
learning processes that drive innovation.
Yet, the status quo is being questioned: a search is underway for a public policy framework
beyond the established top-down monosectoral paradigms. As the federal government’s
Innovation Strategy declares:
Communities and regions across Canada use their knowledge resources to create
economic value, and it is in communities that the elements of the national innovation
system come together.… Communities can become magnets for investment and
growth by creating a critical mass of entrepreneurship and innovative capabilities. By
coordinating efforts, federal, provincial/territorial and municipal governments can
work with the private, academic and voluntary sectors to build local capacity and
unleash the full potential of communities across the country (Government of Canada,
Here, Canadian policy communities join an already vibrant international policy discussion and
evolving set of practices. As a recent cross-national review summarized: “Overall local
development is a very dynamic field and a very large stock of experience and knowledge has
been built up at the local level in recent years” (OECD, 1999: 45). Based on this experience we
can ask, what general lessons have been learned about moving forward with community-based
innovation? The following section begins to answer this question by describing the fundamental
building blocks that are needed for successful community-based innovation.
Cities and Communities that Work: Innovative Practices, Enabling Policies 9
1.3 The Building Blocks of Community-Based Innovation
The overarching message from the literature on community-based innovation is that there exists
no single model or cookie cutter approach to making change (Clarke and Gaile, 1998). While all
local places are subject to the same broad global pressures, the precise mix of constraints and
opportunities varies greatly (Savitch and Kantor, 2002; Sellars, 2002).
Economic structures, demographic patterns, the previous history of development efforts, the
strength of community leadership, and the nature of intergovernmental relations all contribute to
significant variation. Large cities, for example, face particular challenges of rapid population
growth, geographic sprawl, and cultural integration. Conversely, many medium- and smaller-
sized cities experience a net out migration of population. They must retain and attract talent to
strengthen and diversify the local knowledge base. In remote communities, the opportunities are
different still. Residents can develop ideas for diversifying traditional economies by taking full
advantage of the associative bonds and trust relations that often characterize such isolated places.
Drawing from the work of a number of researchers, seven key building blocks seem to be central
to the successful incubation of community-based innovation processes. These are: (1) local
champions, (2) institutional intermediaries, (3) equitable participation, (4) a civic culture of
creativity, (5) adequate financial and technical resources, (6) accountability, and (7) indicators to
benchmark progress. Each of these is described in more detail below.
First, there is the recruitment of local champions who initiate the process and drive it forward.
Such champions are characterized by their detailed familiarity with local conditions and their
ability to cross different networks to forge links where none may previously have existed. In
studies of local partnerships, these actors have been termed “strategic brokers” who work at the
“borderlands” between organizations and sectors to find ways to construct new narratives to
make sense of evolving conditions and possibilities for change (Larner and Craig, 2002: 21;
Harrison and Weiss, 1998: 7).
Second, there is the formation of institutional intermediaries who help manage and sustain the
local partnerships in two principal ways. On the one hand, they provide a base for internal
integration, overseeing planning, resource allocation, technical guidance and evaluation of
projects. On the other hand, they provide a channel for external representation of the local
networks, by operating in extra-local networks that supply vital resources. Effective institutional
intermediation draws down sufficient resources for local projects to succeed while ensuring that
they do not become mere pipelines for priorities set elsewhere (Geddes, 2000).
Third, is the need for equitable participation within local partnerships and with associative
governance. This issue cuts in two directions, asking about the scope of interests represented,
and about the capacity of the various constituencies to make their voices heard. The legitimacy
of the partnership projects can be directly affected by how such questions are handled. The
literature points to a particular risk in the form of business dominance in local partnerships and a
corresponding marginalization of community voices (Moss Kanter, 2000: 179). The result may
be innovation processes revolving around an economic competitiveness agenda delinked from
broader considerations of equity or ecology (Forrant et al., 2001)
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Fourth, a civic culture of creativity is a crucial backdrop for all manner of innovation. A culture
of creativity not only stimulates new thinking, but facilitates sharing of ideas and experiences
among people who work in different sectors, whether they be business, education, scientific
research, social services, or ecology. Emphasis is placed on risk-taking and experimentation.
A culture supportive of innovation treats failure as a learning opportunity not a lost endpoint.
Local places nurturing such creative cultures welcome change and are not “trapped by their past”
(Florida, 2002: 303). As Richard Florida has found, those communities that are most tolerant,
that is, open to diversity of all kinds, are also today’s growth poles of talent and technology.
Fifth, adequate financial and technical resources are required to support and sustain local
partnerships. Beyond the obvious need to adequately fund the implementation (and evaluation)
of projects, investments must be made in the partnership process itself; institutions and networks
require some degree of professional administration and some partners will require capacity-
building assistance if they are to fully participate. Notably, this assistance applies to civil
servants as well, who may be in need of some form of training to operate effectively in an
unfamiliar context (Paquet, 1999).
Sixth, there is the fundamental issue of accountability for public expenditures and policy
outcomes in local partnerships. Certainly, the intricacies of power sharing between public and
private sectors and across scales of government make accountability more challenging than
conventional line department financial reporting inside watertight jurisdictions or even
traditional parliamentary accountability through ministerial reporting to the legislature and the
people. Depending on their particular structure and financing, local partnerships may be
accountable to the constituencies of represented groups, to multiple project funders crossing
public and private sectors, to different governments, and of course to citizens and taxpayers more
generally. Traditional notions of the public interest and the government’s ultimate responsibility
need to be integrated fully into the new power sharing frameworks (Pal, 2001: 261-264).
Finally, there is the question of assessing progress in community-based innovation. The existing
literature acknowledges the difficulty of generating quantifiable measures of success. A recent report
on “innovative local economic development” cases prepared for the US Department of Commerce
noted that the long time horizon of innovation processes and the relative absence of community-level
data meant that “any attempt to ‘tally’ the final cases and to make numeric comparisons among
different types of experiences would be highly misleading” (Youtie et al., 1999: 7). As such, their
goal was to “describe a variety of cutting-edge and innovative practices”. Similarly, research
reported by the Caledon Institute of Social Policy concluded that success could in part be
“determined by whether the effort has been able to create networks and structures that can be
sustained over time to tackle complex problems” (Torjman and Leviten-Reid, 2003a: 25). And the
Canadian government’s Innovation Strategy recommends that communities can “live up to their
innovative potential” by engaging processes of “community network building, capacity building, and
the provision of tools and resources for community-based strategic planning” (Government of
Canada, 2002b). In these terms, benchmarking tools have been developed by a few communities for
assessing their progress. For example, in British Columbia, the City of Nelson’s “Economic and
Social Progress Indicators” tracks progress in a holistic fashion, monitoring four key dimensions:
economic indicators; social indicators; community strength indicators; and stress in the community
indicators (City of Nelson, 2001). But more still needs to be done.
Cities and Communities that Work: Innovative Practices, Enabling Policies 11
Finding these seven building blocks in any city or community that is attempting renewal or
revitalization is far from guaranteed. Yet creating and maintaining local partnerships that
employ multi-level governance is essential to the horizontal and vertical collaboration needed to
support social learning, and upon which innovation depends. The next section of this paper
describes three social learning dynamics that are most relevant to community-based innovation.
1.4 Community-Based Innovation as a Social Learning Process
With its mix of challenges and opportunities, community-based innovation can usefully be
understood as an ambitious and extended social learning process. For purposes of this analysis,
there are three discrete but interrelated learning dynamics to consider in community-based
innovation: civic learning, administrative learning, and policy learning.
Civic Learning applies to the societal actors and their capacity for, and commitment to,
collaborative processes. To what extent will organizations in civil society at the community
level define common goals and discover the terms for mutually beneficial action? Civic learning
is evident when organizations come to value equity, diversity and interdependence. As Frank
Gaffikin and Mike Morrissey have elaborated: equity refers to the fair distribution of resources;
diversity to the acceptance that “difference can contribute as much to social relationships as
commonality”; and interdependence to the recognition that “although people are different, they
still rely on one another to deal with common problems” and that, without such collaboration, all
will be worse off (Gaffikin and Morrissey, 2000: 197).
Administrative Learning is equally important since the emphasis on a reinvigorated civil society
and strategic local spaces does not entail less engaged government. Governments need to find
the right incentives and supports to animate learning processes. Their contributions are vital:
ensuring balanced representation of societal interests, addressing systemic differences in the
capacity to participate, convening and organizing meetings, establishing protocols for monitoring
progress, and maintaining the focus and commitment of social partners especially through the
hard times when the temptation to exit the collaborative process is strongest. Like their civil
society partners, administrators must learn new skills for building relationships, seeking
consensus, assessing risk, and measuring performance. Hierarchical approaches that presume an
in-house monopoly on policy expertise must be rethought. Command and control interventions,
for the most part, must be set aside, or at least flanked by facilitative tools appropriate to a public
sector now repositioned as a partner in a collective order of associative governance. “Street-
level bureaucrats” must be empowered to work creatively with community-based partners.
Policy Learning is the culmination of successful civic and administrative learning. Feedback
between planning and action in associative governance drives the policy agenda. New goals
respond to diverse inputs, including the practical wisdom of engaged citizens, the experience of
representative organizations, and the insights reported by street-level bureaucrats.
12 June 2003 Canadian Policy Research Networks
There are several important additional points to make about the social learning perspective on
community-based innovation. First, as many governance scholars note, this approach
conceptualizes power in a particular way (Stone, 1989; Pierre and Peters, 2000). Aware of the
great imbalance in the resources commanded by different actors recognized as social partners
(allowing the unilateral exercise of power by some over others), this approach still sees in
relational networks the possibility for positive-sum outcomes. By bringing business, labour,
educational, political, and community representatives to the same table, the social learning
perspective conveys the idea of the power to reach consensus through deliberation (Piore,
1995). Mutual recognition is possible, and mutual respect across sectoral divides can grow,
given a degree of trust and a commitment to ongoing dialogue. Conflict and dispute are endemic
to the process but, from the social learning perspective, they are viewed as creative or
developmental – turning points in relationships that trigger the search for more and better
understanding of difference. Indeed, crises are part of social learning. Properly handled, they
bring new parties to the table or, indeed, establish a table where none formerly existed.
The second summary point to be made about the social learning perspective is its attention to the
role of Information and Communications Technologies (ICTs) in enabling communities to
innovate (Horrigan, 2001). As we have seen, research now demonstrates that face-to-face
interactions are the essential foundation for effective learning and innovative activity in the
knowledge-intensive age. But the Internet and World Wide Web can complement or supplement
these personalized relations in a variety of contexts by strengthening multi-stakeholder networks
through better information sharing, more inclusive participation, and efficient project
management (Gurstein, 2000: 14-18). Realizing the full potential of on-line services to enhance
social learning in cities and regions, of course, requires the widest possible “connectivity.”
Appropriate investments in ICT hardware (bandwidth, public access centers, etc.) and software
(training, mentoring, etc.) prevent “digital divides” that exclude some citizens or places (OECD,
Third, the social learning perspective places great emphasis on paying attention to what’s
happening elsewhere. Monitoring external developments, both best practice pace-setters and
more ambiguous experiments or even failures, are integral to the learning process in each of its
civic, administrative, and policy dimensions (Policy Link, 2000). The process is twofold,
beginning with an understanding of the essential dynamics of change in other places, and
followed by careful assessment about which aspects could be transposed to the local setting, and
with what manner of adaptation.
This Discussion Paper inventories a range of projects in cities from Canada, the United States
and Europe. Certainly, the cases are not all models of international best practice or unqualified
success stories. The profiles reveal a range of learning dynamics, all of them, in some measure,
driven from below by civic actors and enabled from above by national, regional, and
supranational public policy. Taken as a whole, they point to an emerging policy and governance
paradigm in which central coordination and community action join together to support local
experiments and to refine national economic, social, and environmental policies in light of local
Cities and Communities that Work: Innovative Practices, Enabling Policies 13
Part 2. Case Studies of Community-Based Innovation
This part of the Discussion Paper presents 11 examples of innovation, which have been drawn
from the experiences of cities in Canada, the United States, and Europe. The cases have been
clustered according to the type of challenge these communities face: (1) as rural or remote
communities in need of revitalization, (2) as industrial cities in need of renewal, or (3) as more
geographically dispersed regions seeking to build a cohesive knowledge cluster (See Table 1).
Within each of the three sections, individual cases are presented in the following way:
background information is provided and the city’s main achievements are introduced; next, the
key actors are briefly profiled; and the innovation process is then described in detail, after which
the role of government is highlighted. This second part of the Discussion Paper concludes with a
summary table encapsulating the key dynamics of development and innovation in the different
cities and regions.
Table 1.
Case Selection
Innovation Challenge City/Region Major Initiative
Kelowna Expanding fruit and wine cluster
Meadville Brownfields redevelopment and broadband
North Jutland Telecommunications cluster adaptation
Revitalizing Rural and
Remote Communities
Beauce Linking traditional industries to proximate
metropolitan cluster
Bilbao Reinventing city through global cultural cluster
Halifax Integrated economic development planning for
amalgamated municipalities
Dublin Local social partnerships to tackle spatially
concentrated poverty
Renewing Industrial Cities
Pittsburgh Civic alliances to lead transformation from steel
to software economy
Waterloo Regional governance for high technology
clusters and poverty reduction
Saskatoon Agri-science clusters and accessible housing
and labour markets
Building Knowledge-
Intensive Regions
Portland Sustainable urban and regional development
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2.1 Revitalizing Rural and Remote Communities
This section profiles innovation processes in smaller cities and communities, often
geographically distant from metropolitan centres and isolated from the economic mainstream. In
such places, innovation challenges typically feature the need to diversify traditional economic
bases, while also reversing negative demographic flows to sustain a critical mass of local
knowledge workers and entrepreneurial talent. The cases examined are: Kelowna, British
Columbia; Meadville, Pennsylvania; North Jutland, Demark; and the Beauce, Quebec.
Growing the Silicon Vineyard: Kelowna, British Columbia
Background and Main Achievements
Kelowna is located in the Okanagan Valley, a distinct economic sub-region of British Columbia
about 400 km from Vancouver, with a population of 147,739. Kelowna is the largest city in the
Okanagan Valley and its economic hub. It is also one of the fastest growing cities in Canada.
The population has increased 50 percent over the last 10 years and the population is expected to
increase by at least 30 percent over the next decade. The Okanagan Valley’s main economic
activities are agricultural (fruit and wine), wood products, and tourism. The last 20 years have
brought rapid growth in tourism, high technology, and business services. Most businesses in the
region are classified as small with nearly 90 percent having less than 20 employees and only
19 firms having more than 200 employees.
Actors and organizations in Kelowna in the last decade have mobilized around the goal of
transforming a traditional, resource-based economy to a knowledge-based one featuring a cluster
strategy focused on wineries and tourism, branded as the “Silicon Vineyard.” Making innovative
use of the region’s rich natural resources and physical attractiveness, community-based
networks, anchored in regional business associations and the education sector, have forged
partnerships with government agencies beyond the locality, especially in regards to meeting the
research and development and skills training needs of the firms participating in the cluster.
Kelowna’s success in making the most of the assets available to a smaller somewhat remote city
has recently been recognized in two international surveys. In a KPMG study comparing business
costs in North America, Europe and Japan, Kelowna ranked as the lowest-cost city in which to
do business in North America. In terms of most affordable places to live, Kelowna was ranked
fifth out of 302 North American cities by the American Chamber of Commerce.
Cities and Communities that Work: Innovative Practices, Enabling Policies 15
Table 2.
Growing the Silicon Vineyard
Key Actors Description
Okanagan University College (OUC)
This institution is a degree-granting education institution with five
campuses throughout the region and over 7,000 students. The
OUC’s Technology Access Center provides support for technology
entrepreneurs and promotes the transfer to industry of the college’s
technological innovations. The OUC also partners with federal,
provincial and municipal governments on various initiatives related to
technology innovation and training, and research in the agriculture
and life sciences.
National Research Council of Canada
This agency maintains an active presence in the region via its
Industrial Research Assistance Program (IRAP) focused on helping
small- and medium-sized high technology companies, its research
facilities, including the Dominion Radio Astrophysical Observatory
(DRAO) and Pacific Agri-Food Research Centre (PARC), and most
recently, its agreement with the OUC to establish the Okanagan
Innovation Forum.
Economic Development Commission
of the Central Okanagan
This local business association and network defines its mission as
that of a catalyst and enabler of growth; it aims to strike a balance
between business and community concerns, and between attracting
outside investment and growing business from within. It also sees
itself as a unifying voice for business across the region, performing a
representational function in relations with all levels of government.
Okanagan High Technology Council
The council is an offshoot of the Economic Development
Commission. It is a regional forum wherein business and community
leaders from industry, government, academia and other agencies
focus on common strategies for promoting high technology in the
Silicon Vineyard
A virtual network that connects the region’s estimated 307 high
technology establishments, and a regional brand invented for
global marketing of the rapidly growing wine cluster that now has
80 wineries producing 22 million litres of wine every year.
Science Council of BC-Okanagan
This provincial government agency was formed in 1993 to address
economic development, employment, and science and technology
concerns, and to improve the region’s awareness of, and access to,
provincial programs and services.
Okanagan Venture Capital Fund
This $5 million provincial Venture Capital Corporation was
established in 2002. It is the first venture capital fund targeted to
high growth, export-oriented technology firms in the Okanagan
region. The fund’s governance structure includes local participation
and community input through a Community Advisory Board.
16 June 2003 Canadian Policy Research Networks
The Innovation Process
There are two underlying factors frequently mentioned as key to the innovation process in
Kelowna and the Okanagan region. Fundamental is a sense of isolation from the economic and
political centres of the province and the country. Related to this isolation, has been the view
generally held by the region’s leadership that the traditional public policy measures of federal
and provincial governments have not been particularly helpful, or relevant, to the region’s
development aspirations (Holbrook, Hughes, and Finch, 1999).
With perceptions of geographic isolation and ill-suited public policy looming large, local
mobilizations have been the critical drivers of change. As one study put it: “Networks formed a
significantly higher source of innovative ideas in the Okanagan, possibly reflecting the relative
isolation of the region” (Holbrook, Hughes, and Finch, 1999: 9).
Here, the Economic Development Commission of the Central Okanagan has played a leadership
role, coordinating initiatives and strategies. It has developed a Strategic Plan for the region,
setting a five-year growth target of 20 percent (Economic Development Commission of the
Central Okanagan, 2002). The plan seeks balanced economic development combining outside
investment attraction and local business retention, evident, for example, when a major
manufacturing enterprise left Kelowna and the commission worked closely with local supplier
firms to assess core competencies and help them adjust.
In regard to outside investors, the commission’s focus is on expanding the high technology
cluster of the Silicon Vineyard, marketing the region’s natural assets, quality of life amenities,
growing research infrastructure for innovative firms, and its own menu of business services that
offer ongoing support to resident firms. In implementing the plan, the commission also plays an
important role through its data generation, information dissemination, and networking capacity.
It supplies comprehensive region-wide information on economic sectors, the labour force, the
labour market, and on population flows, as well as disaggregated profiles of the individual cities
and towns. The commission has also been active in many of the region’s development projects,
including formation of the Silicon Vineyard, implementation of a broadband strategy, gaining
full university status for Okanagan University College (OUC), and formalizing the research
partnership between the OUC and the National Research Council. It also serves as an
information clearinghouse for government programs and private investment funds.
A second key local catalyst for innovation in the Kelowna area in the last decade or so has been
the Okanagan office of the Science Council of BC. It offers networking opportunities to connect
firms and researchers in emerging regional sectors such as information technology, wine
production, and grape growing (Science Council of BC-Okanagan, 1999). Through the council,
a local winemaker received nearly $80,000 in funding for a two-year collaborative applied
research project for increasing grape flavour, aroma and colour. The council assisted in the
creation of a local research team based at the Pacific Agriculture and Agri-Food Research
Centre. The findings from the project generated significant new data for producing high quality
grapes, knowledge directly relevant to the cluster, but also judged to be of wider relevance to the
global industry, thus enhancing the reputation of the Silicon Vineyard as a world-class wine-
producing region.
Cities and Communities that Work: Innovative Practices, Enabling Policies 17
Beyond the wine cluster, the council has been active in the high technology sector. It organized
a “Software CEOs’ Roundtable” composed of leaders from 22 companies. In 1999, the
roundtable addressed emerging labour market needs, determining that the sector would need a 40
percent growth in their labour force. The roundtable became a mechanism for establishing
priorities in relation to the skills shortage, and for joint recruitment and training. The Science
Council was the catalyst for the Okanagan Venture Network Association, a regular forum for
both new and established companies to share experiences and obtain information that can help
them grow. This association provided a local base of expertise and contacts when the $5 million
Okanagan Venture Capital Fund was launched in 2002 by the provincial government to meet the
regional industry’s financing needs in a more sustained and systematic fashion.
The Science Council also partnered with the Economic Development Commission of the Central
Okanagan in two projects. First, they jointly sponsored a 1997 research report, “A Vision for
Growth: High Technology Industries in the Central Okanagan.” One outcome of the report was
to approach the federal government for funding a full-time high technology coordinator, based at
the Economic Development Commission, to oversee implementation. In 1998, this position was
created. Second, they collaborated on production and electronic distribution of the Okanagan
High Tech News, another vehicle for information sharing and networking.
One of the strengths of the local process in Kelowna and the Okanagan has been awareness among
key actors of the need for coordination across the many new initiatives underway. As the high
technology coordinator hired in 1998 at the Economic Development Commission put it: “When I
saw what the Science Council of BC-Okanagan, NRC-IRAP and the Technology Access Centre at
Okanagan University College were already doing in this regard, I realized that we had common
goals and should work together. The other three agreed” (Science Council of BC-Okanagan,
1999). Playing an integrative role has been the Okanagan High Technology Council (OHTC), an
industry association with external ties to the Vancouver-based BC Technology Industries
Association. The OHTC has a number of “top level” working groups on large-scale, region-wide
projects such as expanding computer science facilities and training, and, in partnership with the
OUC’s Technology Access Centre, surveying existing research and development and
telecommunications facilities in the region to determine gaps and ways to fill them. The OHTC
also has a working group responsible for representing the interests and needs of the industry to
governments. Local actors described a constructive division of labour between the OHTC and the
other bodies: the OHTC focused on external representation of local industry need and government
advocacy, whereas the Economic Development Commission and the Science Council concentrated
more on the role of catalysts and facilitators of specific innovation enhancing projects.
Most recently, these local actors have formally tapped into innovation enhancing resources at the
national level and established a focal point for local, regional, and national initiatives (OUC
Journal, 2001). The 2001 agreement between the Okanagan University College and the National
Research Council of Canada established the Okanagan Innovation Forum, co-chaired by two
prominent high technology leaders. The forum is mandated to follow up on the February 2001
Okanagan Innovation Roundtable in Kelowna that drew more than 200 people from industry,
technology, education, and government throughout the region. Much of the activity will be
centered on the Technology Action Centre at Okanagan University College. This centre already
houses a network of knowledge generators that includes the College’s Research Services and
18 June 2003 Canadian Policy Research Networks
Technology Transfer offices, the Science Council of BC-Okanagan, the National Research
Council’s Industrial Research Assistance Program (NRC-IRAP) and several companies involved
with the college in collaborative and research-based projects.
The Okanagan Innovation Forum presents a good example of organizational learning across
communities, facilitated by a national institution (Okanagan University College, 2001). In this
case, the NRC is bringing to the Okanagan an approach to nurturing and sustaining local clusters
that has proven successful in other areas such as Ottawa, Saskatoon and Montreal.
Role of Government
Research from the Centre for Policy Research on Science and Technology into innovation
dynamics in Kelowna and the Okanagan have pointed to the generally unfavourable view of
government and its policies. As the authors of a report surveying attitudes in the mid 1990s
summarized: “The simple fact that government programs are much more negatively regarded in
the hinterland suggests an immediate need to improve existing program delivery and a need to
develop new programs specifically designed to benefit firms that do not have adequate access to
the complete knowledge economy infrastructure available in metropolitan areas” (Holbrook,
Hughes, and Finch, 1999: 13). However, it may be reasonable to conclude that the role of
government is evolving along a more productive and responsive path in relation to the needs of
this region. The initiatives catalogued above, for example the federal NRC agreement and the
provincial Science Council’s highly localized relationship building in the community, suggest
governments are learning. They are pursuing more customized programming and locally
embedded services that build on, and work with, community assets.
Broadband and Beyond: Meadville, Pennsylvania
Background and Main Achievements
Meadville is a small, rural city with a population of 13,685, located in Crawford County in
northwestern Pennsylvania. Only 30 years ago the City of Meadville and surrounding region had
a total labour force of 35,000 and several large scale employers. However, a downward
economic spiral in the 1970s and 1980s, brought widespread plant closings and empty
commercial and retail storefronts. Most traumatic for the community was the closure of
Meadville’s largest employer, Avtex Fibers, that at its peak employed 3,500 workers. By 1986,
this giant acetate yarn manufacturing facility on the city’s outskirts lay vacant and unusable due
to contaminants.
Despite these travails, in the 1990s Meadville witnessed the mobilization of a wide cross-section
of community actors and resources to turn around the declining economic base. Galvanized by
crisis, local champions emerged to build a knowledge infrastructure for the city and region
appropriate to the changing economic times. Central elements were an ICT strategy for
community Internet access, as well as formation of a business park and training centre on the site
of the abandoned Avtex Fibers factory. The city has gained statewide recognition as a pioneer in
brownfield redevelopment. Meadville also demonstrates the synergies of community-based
innovation as further partnerships were forged around the new business park with the local
Cities and Communities that Work: Innovative Practices, Enabling Policies 19
university to incorporate ecological considerations into the economic restructuring. This
initiative also earned outside recognition for its focus on holistic redevelopment.
Table 3.
Broadband and Beyond
Key Actors Description
Joseph D. Furno
A Meadville lawyer and public official who emerged as a local
champion, coalescing a variety of community players behind a
strategic plan to supply broadband access to bring Meadville into
the information age and knowledge economy.
Crawford County Development
Corporation (CCDC)
An agency owning or controlling much of the industrial land and
commercial space in the Greater Meadville area, it became the
anchor institution in a network of public agencies and non-profit
corporations working to reverse the region’s economic slide.
Crawford County Regional Alliance
An alliance spun-off from the CCDC to oversee further
development of the region’s telecommunications infrastructure.
The alliance’s Mission Statement emphasizes the fostering of
public-private partnerships to determine community and business
needs, and find the resources for implementation of projects that
address the “digital divide.” These projects involve upgrading the
technology skills of workers and the aspirations of local business
to use e-commerce to reach the global marketplace.
Local governments
These bodies, principally the City of Meadville, two surrounding
townships, and Crawford County, were instrumental in the
implementation of the technology strategy.
Federal and state governments
Extra-local economic development programming provided
financial, organizational, and technical resources for industrial
conversion and technology infrastructure, and state recognition
helped sustain local efforts.
Allegheny College
The college’s Center for Economic and Environmental
Development undertook community outreach with local authorities
to include sustainability in the economic development and
industrial reconversion plans.
The Innovation Process
Meadville’s innovations emerged through the alliance of two initially unrelated local
mobilizations in the 1990s (Thriving Hometown Network, 2002; Kavanaugh, 1995). Both
responded to the problems facing the community in the wake of the closure of its long-standing
major industry and employer, the Avtex fibre plant. Each project aimed to reposition the small
city for opportunity in the knowledge-based economy. Local champion Joseph A. Furno, whose
vision was to build an interactive local area network for Meadville, spearheaded the first
initiative. Furno put together a coalition of supporters including three local governments (each
of which contributed $10,000), the local cable and telephone companies (which assisted with
financing and design issues), and a task force of volunteers overseeing implementation of a
community electronic bulletin board. The bulletin board began by providing a single window on
a host of locally-based institutions and services, including those from local government, the local
20 June 2003 Canadian Policy Research Networks
health centre, the library, and other services available in the city and region. Local businesses
also expressed interest in potential e-commerce applications. Operational in 1991, Meadville
was one of the pacesetters in providing local dial-up Internet for residents in less populated
At the same time that the broadband initiative was coming on stream, the Crawford County
Development Corporation purchased the abandoned 100-acre Avtex site and announced a plan to
regenerate it as the Crawford County Industrial Park (Regional Conference & Training Center,
2002). In partnership with the Redevelopment Authority of the City of Meadville and with funds
from the state government, steps were taken to address contamination problems, renovate the
buildings, and convert them for multi-tenant occupancy by small- and medium-sized businesses.
As this site preparation work progressed, officials realized that the physical overhaul of the site
was only one part of a larger innovation that could help secure the region’s economic future. A
critical ingredient was to ensure that the industrial park’s infrastructure was at the cutting edge
for meeting the needs of firms and their workers. At a minimum, the Park would have to be fully
wired and networked, and it would also be desirable to have knowledge-intensive, high
technology firms among its tenants. To this end, the CCDC decided to place a multi-media
technology facility in a three-story building at the centre of the industrial park to serve as a hub
for virtual and face-to-face interaction.
To realize this ambition, the CCDC, in 1997, launched a non-profit entity, the Crawford County
Regional Alliance (CCRA), with a mandate to plan the development and implementation of the
Industrial Park’s technology capacity. As one of its first priorities, the CCRA arranged with
Joseph Furno and the managers of the local area network to transfer the system to the Crawford
County Industrial Park, where its speed, reliability, and security were substantially upgraded.
With the network capacity in place, the CCRA developed a Regional Conference and Training
Center to be the major tenant in the industrial park’s multi-media technology facility (Crawford
County Regional Alliance, 2002). The conference and training centre has focused its initial
services on distance learning and video conferencing, priorities for small- and medium-sized
enterprises in outlying areas such as Meadville. The centre has built partnerships with area
accounting firms and universities to help design and deliver customized training to local
businesses and workers. One of the strengths of the centre has been its outreach to the area’s
many traditional firms (mom and pop shops, agricultural producers) to gently introduce them to
the world of e-commerce. A longer range priority for the centre is to look beyond the business
sector to enable non-profit organizations to use the training facilities. This is, for example,
presently occurring as the Meadville Medical Center uses the facility to provide hands-on
computer training for people with disabilities. As of 2002, the Crawford County Industrial Park
contained 24 small- and medium-sized businesses, and employed about 1,100 people.
Another aspect of the innovation process in Meadville is the linkage to environmental concerns
(Nagy, 2001). The connection occurred in two contexts, both related to the conversion of the
Avtex Fibers site to a state of the art industrial park. First, the local county and city authorities
responsible for the land use, clean-up, and financing decisions have been recognized by the state
government as the model to be followed in brownfield redevelopment and business incubation.
The steps followed in the Meadville “turnaround” were incorporated into statewide legislation
subsequently enacted to support further local community-based industrial site recycling. Second,
Cities and Communities that Work: Innovative Practices, Enabling Policies 21
the innovative participation of the local Allegheny College and its “close working relationships
with off-campus partners” distinguishes the Meadville brownfield conversion. The college’s
Center for Economic and Environmental Development worked with local development
authorities and the industrial park’s new tenants to make it an aesthetically pleasing and
authentic place that celebrates environmentally sound industrial renewal.
Here again, the Meadville reconversion was recognized, with the Department of the
Environmental Protection reporting that the industrial park’s “Green Room” represented the first
coming together of art, the environment, and industry among the state’s 800 land recycling sites.
The chair of the state’s Council on Arts observed: “The accomplishments in Meadville should
and can be replicated, in … singular ways, at all those inadvertent disaster sites about our
Commonwealth and our country” (Nagy, 2001). The Allegheny College community outreach
extends to other matters, including the possible development of a bicycle path linking the
industrial park with downtown Meadville, perceived as an environmental and social justice issue
since third shift workers have no bus access to get to and from work. In 2002, another Allegheny
project won a Governor’s Award for Environmental Excellence in the Education and Outreach
category for the “Partnership for Energy Performance” that develops a local measure for rating
energy efficiency in the Meadville rental property market. With state backing, the local
partnership supplied landlords with tools and incentives to improve their efficiency, and a pilot
program is now underway to test the program’s relevance to homeowners (Governor’s Awards
for Environmental Excellence, 2002).
Role of Government
Meadville is a good example of how local collaborations can merge different forms of
community-based innovation, in this case, primarily economic, environmental, and to some
degree, social. Confronted with significant restructuring challenges, the three municipal
authorities cooperated in support of a local champion with an early vision of a wired community;
and they also enabled their local redevelopment agencies to work strategically on a complex
brownfield reconversion to an industrial technology park. At the same time, state-level programs
were necessary, providing funding and expertise for the brownfield clean-up, and recognition
programs that simultaneously motivated the local actors while lending substance to the “place
marketing” campaigns that are inevitably part of local development processes in remote cities
such as Meadville.
A Resilient Cluster: North Jutland, Denmark
Background and Main Achievements
The region of North Jutland has a total population of 494,833. Its largest and central city is
Aalborg. The area has consistently endured some of the highest unemployment rates in Denmark.
The economic structure has been long dominated by traditional industries such as fisheries,
agriculture, textiles, shipbuilding and food processing. In the last three decades, the region has
seen the emergence of a high technology cluster of electronics and telecommunications firms,
branded as NorCOM, and spatially concentrated in a science park close to Aalborg University.
The cluster contains about 35 firms employing nearly 4,000 knowledge workers. This constitutes
22 June 2003 Canadian Policy Research Networks
more than 40 percent of high technology employment in the entire region, although only about 1.6
percent of total employment.
North Jutland has received international attention from policy analysts and researchers seeking to
better understand the capacity of smaller places in remote regions to develop, and especially
sustain, world class technology clusters. Most striking in the North Jutland case has been the
resilience of the cluster in the face of profound disruptions in the core technologies and related
shifts in industrial organization favouring large scale transnational corporations that threaten the
viability of medium-sized firms in the local cluster. Thus, North Jutland is an example of a
community-based innovation system that has built a capacity to minimize the risks of becoming
locked into outdated ideas and practices. This achievement rests on local leadership in enabling
knowledge flows between the university and firms, on technology and research support from the
national government and the European Union, and in the case of the latter, additional resources
to manage broader restructuring challenges following the shutdown of the region’s shipbuilding
industry. With these resources from above, the community has made progress in managing
complex transitions in the electronics industry while also seeking ways to extend opportunity for
citizens outside the knowledge-intensive cluster which, for all its dynamism, remains a very
small part of the region’s overall economic and employment structure.
Table 4.
A Resilient Cluster
Key Actors Description
Aalborg University
This university, established in 1974, has played an integral role in
the development of the electronics cluster, contributing basic
research, supplying engineering talent, and participating in
knowledge transfer partnerships.
NOVI, a science park created in 1980, is the product of
collaboration among the university, regional county council, a local
bank and other institutional investors. The park is home to the
electronics cluster, joining 35 domestic and foreign companies
engaged in various research and development projects. NOVI was
recently designated as an Innovation Environment by the Danish
government, allocating funds for feasibility studies for innovation
Center for Personal Communications
This centre, based at Aalborg University, was created in 1992
through a grant from the Danish Technical Council. It has a strong
research capacity in radiocommunications, wireless technologies,
and speech recognition.
SP Radio, Dancall, Cetelco These are three domestic “anchor firms” in the electronics cluster,
playing leading roles in knowledge generation at critical points in
the cluster’s history.
European Union
The European Union provided significant support to the North
Jutland region, responding with different programs targeted to the
technology development challenges of the electronics cluster and to
broader labour market and social needs of a depressed, remote
economic region.
Cities and Communities that Work: Innovative Practices, Enabling Policies 23
The Innovation Process
The roots of economic innovation in North Jutland reside in the 1940s when a local entrepreneur,
Simon Peterson, founded the consumer electronics firm, SP Radio (Dalum, 1995). Motivated to
find new applications relevant to the large local commercial fishing fleet, SP Radio achieved
world leadership by the 1960s in professional marine communications equipment for small ships
and yachts. Supporting this shifting focus and technology was a decision by the Danish
government to build a university in North Jutland. In the 1970s, Aalborg University emerged as
a pivotal player in the evolution of the electronics cluster.
Indeed, close observers of the North Jutland cluster have emphasized the university’s
contribution along a number of dimensions (Dalum et al., 1999). Most obviously, it developed a
strong basic research capacity in the relevant discipline, electronic engineering. Further, its
graduates supplied local firms with a steady stream of knowledge workers. As these engineers
moved into the local labour market taking up research and development positions in firms, their
relationships from student days facilitated the sharing of insights and experience, and testing new
ideas – that is, the tacit knowledge that is widely understood as a driver of science-based
technological innovation. Danish researchers investigating the dynamics of the North Jutland
cluster have emphasized the informal circulation of ideas among electronic engineers, and even
assembly workers, who regularly meet socially and often change firms in the small, concentrated
labour market (Dahl and Pedersen, 2002).
Further, the university embraced a project-based style of learning that approximated the co-op
model where close consultation with industry embedded real-world problem solving and product
development challenges in the curriculum. As well, the university administration did not look
askance at entrepreneurial behaviour in its researchers, instead encouraging researchers to find
commercial application for their discoveries with the assistance of an in-house technology
licensing office where researchers could interact with industry, venture capital firms, and
patenting experts. While this approach undoubtedly raises some hard questions about balancing
pure and applied research, the engineering faculty’s close and multi-faceted links with local
industry supplied the cluster with knowledge and talent, and also acted as a magnet for attracting
outside electronics firms to a remote region on the European periphery (Lorenzen and Mahnke,
It was in the 1980s that the strength of the university-industry relationship became especially
visible, as the local cluster faced “disruptive” technological breakthroughs in the global industry
leading to a new generation of processes and products (Dalum et al., 2002). In the first round,
mobile communications emerged and firms spun-off from SP Radio sought to establish position
in the new field. To create a milieu for this creative process, a science park, NOVI, was
established in close proximity to the university, and the cluster maintained its competitive edge
in shifting from radio and marine communications to mobile communications.
By the end of the decade, however, a new generation of wireless electronics technology posed a
major challenge to the North Jutland cluster, based as it was in small- and medium-sized
enterprises. In this case, collaboration to develop the basic technology for the industry’s new
applications took place at the NOVI facilities. The partners were Aalborg University and two
24 June 2003 Canadian Policy Research Networks
Danish firms spun-off from SP Radio – Dancall and Cetelco. The joint venture was known as
DC Development and it exemplified the balance between firm cooperation and competition
distinguishing dynamic clusters. The two firms pooled resources for pre-competitive basic
research but planned to go their separate ways to compete on the best applications and design
features, closing the joint venture when the research mission was accomplished. However, the
outcome was different than planned or hoped for: mobilizing the knowledge resources of the
two firms and the university, the collaboration proved a technological success, but the scale of
the project financially drained both companies. They were taken over by foreign companies in
1992 (Dalum et al., 1999: 12-15).
The outcome of the DC Development joint venture has set the stage for the critical debate about
the future prospects of the North Jutland electronics cluster. Given the cluster’s limited capacity
to generate major breakthroughs in the latest wireless technology, the so-called “UTMS and 3G”
generation, how can it renew or sustain itself? If increasing transnational investment by world-
scale industry giants like Nokia, Siemens, and Ericsson is pretty much inevitable due to the vast
resources required for bringing new ideas to market, does this inevitably weaken the cluster as
decision-making control shifts beyond its boundaries? Foreign capital might lead either to
branch plant shut down or, less dramatically, the gradual loss of local networking capacity as the
transnationals centralize research and development in their home base and resist sharing
knowledge among branch plants (Lorenzen and Mahnke, 2002). Alternatively, cluster actors
might invent new ways to work with the transnational investors to augment the local knowledge
base and fill gaps in the financing of high-risk research. A new and different niche emerges for
the cluster in the global innovation chain. Such a niche would reposition local assets as a
“development hub” for the large transnationals still attracted by North Jutland’s combination of
engineering talent, applied university research, and the NOVI infrastructure (NorCom IKE
Group, 2000).
Thus far, evidence suggests some movement along the second track, as companies such as Nokia
and Ericsson recently moved into North Jutland. Moreover, NOVI has undertaken a future-
oriented strategic planning process that will seek input and commitment from the cluster’s
transnational members.
Role of Government
The North Jutland case speaks to the ongoing challenges facing a small, remote region seeking to
maintain a long standing global presence in a knowledge-based industry subject to “disruptive
technologies.” In the electronics industry, the North Jutland cluster has sustained itself across
three generations of communications technology (radio, marine and mobile), and now grapples
with new wireless systems requiring research and development resources on an even larger scale.
At each of these critical junctures, local actors and the national government have mobilized their
resources and worked in partnership to strengthen the cluster’s adaptive capacity. According to
close observers of the process:
The North Jutland mobile communications case shows that publicly financed local
knowledge institutions as well as public risk capital for major development projects
on a pay return basis if commercially successful – have been decisive for the
development process towards a technology district during the 1980s. That could not
Cities and Communities that Work: Innovative Practices, Enabling Policies 25
have been reached by pure market forces alone. Although the cluster of industries as
such is not the result of a deliberate planning process, the establishment of the
knowledge institutions that form a central part of the decisive assets of the system is
the result of very deliberate efforts in the local community (Dalum, 1995: 22).
The Danish government has made significant investments in the cluster, dating back to the
founding of the university, continuing with support for NOVI, and by further dedicating funding
for research centres in electronics and communications technology. In 1999, North Jutland was
designated by the government as one of two Information Technology Lighthouses. This program
combines the resources of national and local governments and the private firms to support field
experiments related to the newest wireless communications technology. By 2002, nearly 90 such
projects were underway. Additionally, Danish officials are investigating the possibilities for
diversification through a health technology cluster in North Jutland, trying to learn from the
mobile communications experience (Dalum et al., 1999). As one official put it, “having noted
that a preemptive strike in Aalborg region bore fruit in the wireless telephony area previously,
we have high hopes for the same achievement in the medical device area.”
Some of the elements for such a strike are already in place. The university has a Department of
Health Science and Technology, and already encourages strong interdisciplinary collaboration –
this time between hospitals and electronic engineers. It is also the first university in Scandinavia
to offer an engineering master’s degree in Health Technology. NOVI has committed seed
funding to house the emerging networks, and there has been support from the local government
and business council. But one missing ingredient is the anchor firm that could drive the process
and generate the spin-offs, as SP Radio did for the electronics and communications cluster. As
such, any medical device cluster will depend on foreign capital and public investments for its
growth (Dalum et al., 1999: 19).
In closing, it needs to be stated that North Jutland faces equally important and daunting
challenges with respect to social and economic conditions beyond its knowledge-intensive
sectors. Indeed, the cluster may be an island of innovation in a sea of decline. As one analyst
put it, in North Jutland “high technology sectors are isolated clusters” (Naes Gjerding, 2001).
The wider economic profile of the region remains dominated by older, declining industries, with
productivity and education levels far below the national average. Issues of long-term
unemployment and social exclusion are urgent. Here, the European Union has made its presence
felt in the region, with programs targeted at responding to the crisis of the shipyards through
worker retraining and developing the tourism sector (Commission to the European Parliament,
26 June 2003 Canadian Policy Research Networks
From Localized Production to a Technoregion: The Beauce, Quebec
Background and Main Achievements
Situated in the southeast of Quebec, between Quebec City and Maine, the Beauce encompasses
three regional municipalities – La Nouvelle-Beauce, Robert-Cliché, and Beauce-Sartigan. The
region has been described as “one of the most remote areas in Quebec,” and it includes a number
of smaller urban centers and towns, with a total population of 88,475 (Doloreux, 2002: 11). The
Beauce is the manufacturing core of the surrounding Chaudière-Appalaches administrative
region. Its industrial structure features mostly small- and medium-sized enterprises in traditional
industries, with more than 75 percent of the manufacturing industries concentrated in low
technology and medium technology sectors, reflecting the dominance of wood, textiles, clothing,
and metal fabrication.
Over time, this region has used various internal and external community-based strategies to
maintain its economic base. For many decades, the Beauce’s prosperity relied on an internal,
highly localized system of production that drew on the trust relations among local firms and
workers rooted in a shared experience of isolation (Doloreux, 2002: 11). The production profile
itself was stable, yet confined to traditional activities and demonstrating little evidence of
innovation in processes or products. More recently, researchers have tracked an external
reorientation in the Beauce production system emphasizing external linkages and relationships in
the wider innovation system of metropolitan Quebec City. At this regional scale, a small number
of firms in the Beauce are participating in knowledge-based networks that help supply key inputs
in technology, skills, and know-how. This partial rescaling of the Beauce system of production
has been facilitated by a range of policy interventions as both federal and provincial governments
are increasingly preoccupied with supporting innovative activity in less favoured regions. There
are indicators of success: the number of small- and medium-sized businesses is growing, the
unemployment rate has recently been the lowest in the province, and there is strong demand for
skilled workers.
The Innovation Process
The Beauce region in Quebec has inspired considerable research interest as an example of a
localized industrial system helping rural and remote communities achieve reasonably strong
economic performance over time (Landry, 2001). Much of this research has looked historically
at the Beauce case trying to identify the persistent factors enabling success. In these terms, a
number of analysts have drawn parallels between the Beauce social production structure and
some of the well-known geographically localized industrial districts in Europe, particularly Italy
(Klein et al., 1998). At issue is the way in which strong yet informal ties among firms, workers,
and community institutions can supply a powerful cultural framework for co-ordinating
productive actors, thereby enhancing the local economy (Guillaume, 2001).
Cities and Communities that Work: Innovative Practices, Enabling Policies 27
Table 5.
From Localized Production to a Technoregion
Key Actors Description
Conseil économique de Beauce
An umbrella organization for local business, with a membership of
about 200 enterprises; it plays an important role in business
development, coordinating implementation of a broad range of
advisory services for small business networking, start-up
assistance, and business plan development.
Pépinière d’entreprises innovantes de
Beauce and Action PME Beauce Inc.
These two organizations focus on support, such as business
incubators and entrepreneurial mentoring, for small- and medium-
sized innovative firms. They are part of a “Building the
Technoregion” strategy that supports business innovation on a
regional scale extending to Quebec City.
A centre providing low-rent, fully serviced rental space to new
businesses and an incubator for high technology start-up firms.
Groupe d’action pour l’avancement
technologique et industriel (GATIQ)
A private sector based network for building the research base and
innovative capacity of firms.
Fonds régional de solidarité
Chaudière-Appalaches and Société
Innovatech Québec et Chaudière-
These are two locally-based venture capital firms with links to Le
Fonds de Solidarité des Travailleurs du Quebec.
Centre intégré de mécanique
industrielle de la Chaudière
This centre supports firms with technical support in developing and
commercializing new technology.
Federal and provincial governments
Both upper level Canadian governments are active in economic
development in the Beauce region. The Canadian Economic
Development Corporation (CEDC) has a number of innovation
programs in place, funding business organizations such as the
Conseil and networking activities through the Regional Strategic
Initiative and Community Futures Development Corporation. The
Quebec government has also established organizations with a
specific mandate to assist in the economic and community
development of the Beauce region. There are also instances of
federal-provincial collaboration. The Canada-Quebec Infrastructure
Works Program provided joint funding to the Moisson Beauce, a
community kitchen and food service, enabling it to expand and
improve its service to the region’s less advantaged citizens.
28 June 2003 Canadian Policy Research Networks
In the case of the Beauce, the different elements of this framework have been specified, and
while not all represent models of desirable community-based innovation, they constitute a rich
local system of trust relations contributing to the economic success of a remote region. To begin,
the region’s firms historically have benefited from low wage rates paid to local workers, in part
resting on the fact that their workers are less likely to be unionized than in other parts of Quebec.
At the same time, the close knit local community facilitates trust-based relations of mutual
respect between workers and managers. This has allowed for much upward mobility by workers
within enterprises. In addition, local firms cooperate in mutually supportive ways, avoiding, for
example, competing over, or poaching, one another’s workers. Firms also have participated in
various forms of mutual aid and assistance to companies in difficulty or near bankruptcy (Klein
et al., 1998). This tradition of collaboration was institutionalized in the 1970s with the formation
of the Conseil économique de Beauce, which cultivates a territorial identity or local economic
culture based on combining growth opportunity with collective responsibility.
Some research examining the local production system region has concentrated on relationships,
networks and strong ties internal to the region. Other analysts have begun to look equally at the
extra-local dynamics conditioning the Beauce’s development, and specifically its future
prospects. Here studies have tracked two key periods of external relationship building. In the
1960s and 1970s, many of the region’s firms benefited from the decentralization of industry from
the Montreal area, with subcontracting arrangements established in the textile and clothing
sector. Most recently, for the 1990s, David Doloreux (2002) has mapped a second wave of
networking that connects firms in the Beauce to a larger economic community. In this case, the
focus is on small- and medium-sized enterprises in more knowledge-based activities than the
traditional industrial profile of Beauce firms.
Such firms, it seems, are not able to meet the full array of innovation needs within the older
localized production system. Indeed, the region ranks well down the list among Quebec’s
regions in per capita spending on research and development. Doloreux describes a certain
institutional thinness in relation to high technology and knowledge flows, suggesting that the
region risks becoming locked into a production system and culture well-suited to an earlier
economic era but not to emerging challenges (Doloreux, 2002: 13). In particular, the region
needs to develop advanced business and information technology services, and to find strategies
to attract highly skilled employees. Faced with these challenges, the most innovative firms are
combining the benefits of the local system with resources, contacts, and knowledge available
only at larger spatial scales, principally at the regional level of metropolitan Quebec City.
Doloreux’s recent survey of small- and medium-sized Beauce firms reported a number of
advantages in networking at the larger geographic scale, including the quality of
telecommunications infrastructure, the availability of skilled labour, and the opportunity to
interact with and learn from different economic actors. In the Beauce today, Doloreux concludes
that the critical learning dynamic crosses scales and networks:
The regional patterns of co-operative relationships confirm the importance of the
geographical and technological proximity of the metropolitan area of Quebec. The
cohesiveness of the system of innovation in the Beauce appears to evolve and rely upon
a Quebec CMA [census metropolitan area] ‘home base’ as hub supporting firms’ needs
in terms of networks and knowledge provision. Furthermore, interaction with the
national and global system of innovation is of importance, since different forms of
Cities and Communities that Work: Innovative Practices, Enabling Policies 29
knowledge are acquired by firms in pursuit of innovation. Essentially, only basic
support and supply services are procured within the Beauce (Doloreux, 2002: 28-29).
Role of Government
The Beauce’s historic social structure of production, rooted in localized relations and networks,
is undergoing a geographic re-scaling to enable the region’s most innovative firms to access
specialized inputs and contacts. In managing this transition, various public and private sector
institutions are making contributions. First, the federal government’s Canada Economic
Development for Quebec Regions has initiated a Regional Strategic Initiative, a five-year project
ending in 2004. Its purpose is to support economic diversification in the Beauce. Resources
have been allocated to upgrade the innovation infrastructure, such as the Conseil économique de
Beauce. More ambitious has been the support for funding innovative enterprises in a designated
Technoregion spanning the Beauce and Quebec City’s metropolitan area.
The Quebec government has also been active in assisting with regional transformation. A
provincial regionally-organized council for economic development has formulated a strategic
plan to coordinate policy interventions and programming for the area. Key priorities include
more customized labour market training and investment in human capital to respond to the
evolving skill requirements of firms and workers. Educational services are also a focal point for
provincial action, given concerns about the outward flow of young people from the region.
Emphasis is now placed on improving the links between schooling and the local labour market.
Clearly, governments are seeking to assist the Beauce in upgrading its economic base,
principally through measures that would update its historically successful local social structure of
production. Here two challenges are evident. The first is the need for coordination among the
levels of government, especially federal and provincial, in designing a coherent framework for
local and regional innovation. Second, these governments need to tailor their interventions to
local conditions, and adapt them in response to evolving circumstances and feedback from
communities. One promising example of this kind of administrative learning occurred with the
federal Canadian Economic Development agency (Simard and Fortin, 2002). Responding to
recommendations from an economic summit organized by the Quebec City Chamber of
Commerce in 1995, the agency supported development of the Québec-Chaudière-Appalaches
Technorégion by creating a $10 million fund for start-up firms using advanced technologies, and
for cross-fertilization between research centres and such firms.
At its inception the Technoregion fund filled a virtually unoccupied niche in the region’s
business infrastructure and many funding requests came forward in the initial years of operation.
However, the level of interest soon slowed and, by the time the fund was due for renewal, much
of its budget was unspent. Fund managers at the community level, in collaboration with the
federal agency, assessed the situation, finding a host of new entities had subsequently moved into
the start-up financing niche such as venture capital corporations, union funds, Investissement
Québec and the Bureau de la Capitale nationale. At the same time, the assessment uncovered a
related gap in meeting the financing needs of young technology entrepreneurs in a timely
fashion. In response, the remaining budget was refocused to target a relevant client group and
renewed for a three-year period. In all, the fund contributed $5.2 million for projects requiring a
30 June 2003 Canadian Policy Research Networks
total investment of $33 million and, between 1996 and 2001, an estimated 100 new jobs resulted
from the fund (Simard and Fortin, 2002).
2.2 Renewing Industrial Cities
This section profiles innovation processes in older industrial centers. In these places, innovation
challenges typically focus on the need to revitalize or even replace an aging manufacturing base.
Specific priorities can include regenerating central business districts, making new use of vacant
or derelict lands, and forging a shared vision across metropolitan spaces from inner cities to outer
suburbs. The cases examined are: Pittsburgh, Pennsylvania; Bilbao, Spain; Halifax, Nova
Scotia; and Dublin, Ireland.
Civic Alliances: Pittsburgh, Pennsylvania
Background and Main Achievements
Pittsburgh is a medium-sized city (population 334,563) that since the end of the Second World
War has faced a series of economic restructuring and urban regeneration challenges. The broad
trajectory has been one of transforming an aging industrial structure dominated by steel and
metal fabrication toward restructuring centered on engineering, medicine, education, and
software services. The transformation involved a loss of an estimated 150,000 manufacturing
jobs in the Pittsburgh region and very high unemployment in the 1980s, especially in the steel
factory communities on the city’s outer edges.
Researchers analyzing Pittsburgh’s decades long restructuring processes frequently identify the
city as an exemplar of public-private partnerships directing development in the context of a
highly-fragmented local political administration with weak capacity for strategic planning. The
Pittsburgh experience is especially notable in three aspects.
1. The sustained commitment of the civic alliance over time and its responsiveness to the
evolving challenges facing the city.
2. The relatively inclusive nature of the partnerships which have sought to bridge business,
labour and neighbourhood concerns in innovation projects.
3. Civic alliances have mobilized at the regional scale, encompassing the city and its
surrounding suburbs and towns.
Despite Pittsburgh’s widely recognized achievements in civic governance, some observers have
challenged the representativeness of the urban regime, particularly in relation to racial minorities
and the poor. Others point out that even with the local governance innovations, the city
continues to struggle just to maintain its population and employment base.
Cities and Communities that Work: Innovative Practices, Enabling Policies 31
Table 6.
Civic Alliances
Key Actors Description
Allegheny Conference on Community
Development (ACCD)
A civic organization comprised of local business elites and non-
profit institutions, created in 1944 by the city’s prominent Mellon
family; it has a small professional staff for partnership
management and project implementation. The ACCD has been at
the centre of the three major thrusts in post-war Pittsburgh’s
regeneration efforts: (1) 1940s revitalization of the central
business district; (2) 1960s renewal of distressed neighbourhoods;
and (3) 1990s region-wide economic restructuring.
Pittsburgh Partnership for Neighborhood
Development (PPND)
An umbrella association for the city’s community development
corporations, governed by a multi-stakeholder board composed of
representatives from the ACCD, academia, the city planning
department, and national foundations. It serves an internal
integration function for community developers assisting in
planning, staffing, and implementation, and an external
representational function connecting local projects to funding
networks and public policy debates.
Philanthropic foundations
National organizations such as the Ford Foundation and the
locally-based Heinz Endowment have supplied a variety of
resources for the implementation of public-private partnership
Federal and state governments
Upper level American governments have contributed to the local
partnership processes through funding and regulations. In
particular, the federal government’s various community
empowerment initiatives, dating back to the 1960s, have helped
neighbourhood groups find a place at the partnership table
consistently “set” by the ACCD.
Steel Valley Authority (SVA)
An organization that emerged in the 1980s to respond to the deep
economic and social distress experienced by outlying steel
industry communities. SVA brought a clear regional focus to
Pittsburgh’s restructuring and mobilized a coalition of labour and
social activists to press for radical innovations such as community
or worker ownership of factories.
Pittsburgh Urban Redevelopment
A government-based catalyst and coordinator for economic and
land use development in the downtown core and inner city
neighbourhoods, providing professional services in site selection
and preparation.
32 June 2003 Canadian Policy Research Networks
The Innovation Process
Analysts of collaborative approaches to local economic development in the United States have
frequently been drawn to the Pittsburgh story. In her comparative analysis of urban “growth
machines,” Barbara Ferman describes Pittsburgh as “the unparalleled model of public-private
partnerships” (Ferman, 1996: ix). Louise Jezierski traces the transformation over five decades of
Pittsburgh from the “Steel City” to the “Software City,” concluding that the “political economic
history of Pittsburgh illustrates that ‘economies are actively constructed, not passively evolved’”
(Jezierski, 1996: 177). These two scholars, and others, have demonstrated that Pittsburgh’s
course has been mapped and organized by a civic alliance dominated by corporate leaders but
also including representatives from other sectors, community non-profit, educational, and labour
interests (Weir, 1999). Local, state, and federal governments have been involved in various
projects, although rarely in leadership roles. Indeed, the high degree of institutional
fragmentation, what some have termed “balkanization” of government in the Pittsburgh city
region has motivated private and third sector actors to assert strategic leadership in the absence
of coordinated political direction and planning.
A striking feature of Pittsburgh’s civic alliance has been its ability to adapt over time: to
reconceive the city’s challenges, to build organizational capacity, and to mobilize resources
(Jezierski, 1996: 177). Three fairly distinct eras have been identified (Jacobs, 2000: 77). First,
after 1945 the focus was on revitalizing the central business district, which was struggling with a
declining steel industry and environmental problems of smog and flooding. Second, in the
1960s, a new agenda sought to incorporate social and neighbourhood concerns, priorities
inspired by the federal government’s urban and community development programming through
the War on Poverty. In the 1990s, Pittsburgh’s civic alliance moved in two new directions. It
elaborated a region-wide strategy that, in its geographic scale, went beyond both of the earlier
projects, with their respective targets in the central business district or inner city neighbourhoods.
It also sought economic restructuring through high technology clusters.
Institutionally, the base of the civic alliance is an organization known as the Allegheny Conference
on Community Development (ACCD), established in 1944. The ACCD’s leadership historically
has been rooted in Pittsburgh’s largest corporations, but its partnership orientation is clearly
illustrated in one of its key spin-off organizations, the Pittsburgh Partnership for Neighbourhood
Development (PPND). Created with active support from the ACCD in Pittsburgh’s third era of
regional economic restructuring, the PPND combines the roles of strategic brokerage and
institutional intermediation for the city region’s less advantaged constituencies (Harrison and
Weiss, 1998: 114). That is, it assists the leading community development corporations (CDCs) in
design, implementation and management of specific projects, for example, affordable housing,
small business development, child care, and job training and placement. At the same time, the
PPND represents the needs of community organizations to a range of external funders, navigating
for them the uncertainties resulting from government spending cutbacks and the opportunities
presented by forging relationships with national foundations. As Ferman documents, the PPND
has been successful in aggregating public, private and foundation monies for community and
neighbourhood development. When the Ford Foundation in 1983 “sought to initiate a program
that would provide operating funds for CDCs, it found Pittsburgh’s nonprofit sector very receptive
and well organized” (Ferman, 1996: 100).
Cities and Communities that Work: Innovative Practices, Enabling Policies 33
Indeed, Pittsburgh’s civic alliance, through the ACCD and the PPND partnership, has consistently
looked to merge economic and social innovations in urban and regional redevelopment. When the
1980s recession hit the Pittsburgh region hard, the ACCD took the initiative with a strategy
targeting economic renewal based on high technology and advanced business services. In 1984,
the ACCD produced a report A Strategy for Growth: An Economic Development Program for the
Pittsburgh Region that emphasized rebuilding from within rather than chasing external investment
(Jezierski, 1996: 172). A key component of the growth strategy was to develop further the city’s
knowledge assets and for the first time, fully engage universities, hospitals, and research centres in
the ACCD partnership process (Economic Development Administration, United States Department
of Commerce, 1997: 24-27). Two new entities were created, the High Technology Council and the
Southwestern Pennsylvania Industrial Resource Center, both acting as a focal point for business,
university, and research collaboration. Two new networks also emerged: the Advanced
Manufacturing Alliance and the Environmental Business Network. The University of Pittsburgh
(by the 1980s the city’s largest employer) supplied the partnership with detailed economic analysis
of the region, and the Software Engineering Institute was created at Carnegie Mellon University.
Thus, by the 1990s, the ACCD had consolidated a regional cluster strategy with a series of
infrastructure projects underway in key technology sectors such as biotechnology and biomedicine,
tissue engineering, and robotics.
However, this cluster agenda did not go uncontested (Ferman, 1996: 124-134). Community
activists from Pittsburgh’s inner city neighbourhoods and outlying steel mill towns challenged
the business-centered, high-skills focus that largely ignored displaced workers and declining
areas. Critiquing the ACCD for an insufficiently representative partnership, a grassroots
coalition of trade unions, social movements, anti-poverty activists, and housing advocates
brought forward an alternative regeneration agenda that emphasized worker retraining,
neighbourhood revitalization, and worker ownership for abandoned factories.
In keeping with the Pittsburgh tradition of encompassing civic alliances, the ACCD responded in
the early 1990s to the counter-mobilization with a more inclusive community and economic
planning process, the Regional Economic Revitalization Initiative (Jacobs, 2000: 78-84).
Following broad public consultation, the ACCD released, in 1994, a new vision and strategy
document, The Greater Pittsburgh Region: Working Together to Compete Globally, outlining a
more integrated vision. Pittsburgh declared it could not “be a world class region of two
economies, one of opportunity and quality jobs and one without.” As one study of the new plan
put it: “This meant that women, minorities, and dislocated workers should have a stake in
economic development, and they should have access to business advice, startup funds, and
training” (Jacobs, 2000: 82).
The renewed search for ways to link economic and social dimensions of urban regeneration was
given concrete expression in the mid 1990s with the Pittsburgh Manufacturing and Community
Development Network (PMCDN) (Jacobs, 2000: 99-101; Harrison and Weiss, 1998). Here the
ACCD partnered with the PPND in an innovative “industry-community outreach,” targeting
some of the city’s most distressed neighbourhoods. The aim was to apply the local labour
market knowledge and networking capacity of community development corporations to
challenges facing businesses that had chosen to stay in these areas. On the one hand, the CDCs
would assist employers in developing their own inter-firm relations and help broker timely
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access to relevant neighbourhood-based business networks. The assistance of university
business schools was engaged. On the other hand, the CDCs would draw on their multiple
contacts in specific neighbourhoods to connect workers with employers or with appropriate
upgrading opportunities. In short, community-organizing strategies would be used to forge links
among firms, thereby enhancing the prospects of their retention in the neighbourhood, and
improve job prospects for typically isolated residents, bereft of meaningful contact with
employers or even the labour market more generally.
Early assessments of the PMCDM have been mixed. Some key employers, such as Nabisco
Foods and the Pittsburgh Wool Company, enlisted and the CDCs have been able to expand their
operations into economic development networks. But it has been noted that the network’s firms
do not yet view the CDCs as reliable sources of employment referrals, and that the CDCs are
experiencing their own “growing pains” in staffing and managing the network (Harrison and
Weiss, 1998: 124).
Role of Government
Pittsburgh’s experience is a rich example of urban and regional governance dynamics in the
American setting where the combination of local fragmentation and limited federal or state
involvement shifts the focus to civic alliances and public-private partnerships. This does not
imply that upper level governments have been absent. In Pittsburgh, federal interventions, for
example, have influenced local partnership processes. In the 1960s, the War on Poverty program
empowered community associations and, in the 1990s, federal regulations in community
reinvestment obliged banks to lend money in disadvantaged neighbourhoods, often leading to
their direct participation in community development organizations like the PPND. By the same
token, the retrenchment of government funding to cities since the 1980s pushed local actors into
new funding arrangements, principally through private foundations. And the municipal
fragmentation characterizing local government in the Pittsburgh region hampered efforts to
develop the political consensus required to participate in the federal empowerment zone and
enterprise communities that became available in the 1990s.
As such, the Pittsburgh story revolves around third sector institutions like the ACCD and PPND.
The interplay of these private and community organizations, with their respective economic and
social priorities, has shaped the city’s development. Indeed, their capacity to coalesce around
new visions at critical junctures – for the central city, the neighbourhood, or the region –
suggests a capacity for civic and policy learning. At the same time, observers have catalogued
weaknesses and gaps in this model stemming from insufficient government activism. Public-
private partnerships at the local level, while inclusive of some community voices, have not
adequately reached out to African-Americans who represent about one quarter of the population
and continue to suffer high levels of poverty and marginalization. At the national scale,
Pittsburgh, a place that according to the most recent census continues to lose jobs and
population, has not fared very well in the inter-city investment competition that is part and parcel
of the decentralized American approach (Florida, 2002: 216-217). Louise Jezierski aptly
summarizes the Pittsburgh innovation story:
Cities and Communities that Work: Innovative Practices, Enabling Policies 35
Struggles over the development agenda have emerged concerning who may
participate and the kinds of jobs that should be generated and maintained. These
struggles ultimately concern the legitimacy of third-sector, nonprofit governance.
The postindustrial transformation in Pittsburgh has not been constructed from mere
market mechanisms or some “rational” public choice. Rather, the process has been
one of conflict, experimentation, sacrifice and loss, a furious level of organization
building, and mobilization of consent (Jezierski, 1996: 179).
Cultural Clustering: Bilbao, Spain
Background and Main Achievements
Bilbao is one of the main industrial centres of Spain and the largest city in the Basque country,
with a total population of more than 370,000. The city enjoyed dynamic economic growth as a
commercial port in the 19th century and, in the first half of the 20th century, flourished as an
industrial leader in labour-intensive sectors such as steel, shipbuilding, and chemicals. By the
1970s, these industries were in structural decline and the city faced a downward spiral of
unemployment, environmental decay, and urban blight from derelict lands concentrated in inner
city and waterfront sites that previously housed heavy industry. Against this backdrop, Bilbao is
renowned for its concerted effort in the 1990s to transform an inward looking city with a
traditional economic base into a vibrant post-industrial city with a profile on the global cultural
stage. Drawing on resources from a variety of governments, ranging from the municipality to
the European Union, local actors devised strategic plans and created new partnership structures
for implementation.
Table 7.
Cultural Clustering
Key Actors Description
Bilbao Metropoli-30 (BM-30)
A public-private partnership established in 1987 to direct implementation of
the Strategic Plan for the Revitalization of the Bilbao Metropolitan Region.
Bilbao Ria 2000
An urban development corporation created in 1992 through a collaboration
of the central government and the Basque administration to finance and
promote regeneration of metropolitan Bilbao through attracting private
Three levels of government are involved in the city’s regeneration: the
central government, the Basque government, and the metropolitan Bilbao
European Union (EU)
The EU has contributed funding for community-based, grassroots projects
to improve distressed areas in the inner city. These monies have come
through an EU “Urban Pilot Projects” program that counts among its
priorities neighbourhood renewal of contaminated brownfields.
36 June 2003 Canadian Policy Research Networks
The main thrust of the strategy was regeneration of inner-city industrial and port areas through a
cultural and tourism strategy anchored in attracting the American-based Guggenheim Museum to
build a world-class complex. With concerted and sustained effort by local champions, enabled
by upper level government expertise and financing, the strategy was implemented. While the
economic returns on the museum investment have been impressive, it remains controversial as
some groups argue that Bilbao’s particular form of cultural renewal is not sufficiently informed
by social and ecological considerations, nor adequately embedded in the local community itself.
Here, programming from the European Union has played an effective flanking role for the city’s
global cultural strategy, providing support for more grassroots regeneration projects.
The Innovation Process
Bilbao’s innovation process began in the late 1980s. The cumulative impact of a series of
economic restructurings had by then left the city with a drastically reduced industrial base, high
unemployment, and environmental and land use problems across the city region but particularly
concentrated in inner city and waterfront areas. In response, city officials organized meetings
and conferences to take stock of local assets and canvas relevant foreign urban regeneration
experiences in Europe and North America (Gonzalez, 1993). The aim was to learn from
strategies followed in other older, declining cities that had managed to reverse their fortunes.
One case that gained some profile in the discussions was that of Glasgow, Scotland (Gomez,
1998). To Bilbao officials it offered promising lessons in focusing on culture as a lead sector in
restarting a local economy and in reinventing the image and identity of the city, what the
officials saw as a “psychological reorientation” in perceptions of the place among residents and
outsiders (International Symposium, 2002).
This episode of civic introspection culminated in the 1987 presentation by the Bilbao Council of
a new urban planning framework, the Strategic Revitalization Plan for the Bilbao Metropolitan
Region. The plan elaborated three essential thrusts for urban regeneration (Rodriguez et al.,
2001). First, it confirmed the interest in shifting the economic base from industry and
manufacturing to one stressing the cultural sector and advanced business services in banking,
insurance, and e-commerce. Bilbao already had achieved some success in the 1980s as a centre
for international trade fairs and exhibitions, making the cultural strategy more compelling.
Second, the plan sought to link economic redevelopment with territorial regeneration of some of
the abandoned parts of the city. The riverfront Abandoibarra – once the heart of the city’s port
functions, shipyards, and steel, iron and chemical industries, but presently derelict – was rezoned
for leisure, retail and office development, with an eye to cultural activities. Third,
implementation would be on the basis of various forms of public-private partnership. Two
organizations, Bilbao Metropoli-30 and Bilbao Ria 2000, were proposed as vehicles. In
particular, Bilbao Ria 2000 became a dynamic implementing agent for the vision, rapidly putting
together financial consortia to carry out the property regeneration and land use conversion in the
priority area (Rodriguez, 1995: 82-84).
Through the 1990s, the three elements of the urban regeneration strategy have been largely put in
place. As such, Bilbao is recognized for its focused, persistent commitment to an ambitious
restructuring plan in a challenging economic context. Yet, realization of the vision has involved
significant debate and controversy over the terms and nature of urban regeneration (Rodriguez et
Cities and Communities that Work: Innovative Practices, Enabling Policies 37
al., 2001; McNeill, 2000). To begin, the particular content assigned to the cultural strategy was
contested. At issue was the fundamental decision, taken by the Basque government apparently
with little or no public consultation, to concentrate on a globally-oriented, tourist-driven cultural
strategy. The centerpiece was the landing of a world-scale art museum through negotiations with
the New York-based Guggenheim corporation to place its second European branch in Bilbao.
Plans were then made to construct the museum in the abandoned waterfront and docklands area
in the city centre, thus making it also the flagship for territorial revitalization.
Officials celebrated the museum both as a boon to tourism-related business and as a compelling
focal point in projecting a new post-industrial image of Bilbao to the outside world. Moreover,
its construction necessitated a major clean-up of the derelict industrial lands, preparing the
ground for further development of a global cultural cluster including a museum of science and
technology and concert hall. Bilbao Ria 2000 and Bilbao Metropoli-30 demonstrated strong
leadership in brownfield conversion, piloting a benchmarking tool to monitor progress that
became a model for similar projects in European cities (OECD, 2000: 72-74). And certainly this
strategy has delivered the results for its sponsors: a KPMG PeatMarwick evaluation found that
visitor and tourist traffic in the district’s first year were three times the original projections
(Plaza, 2000; McNeill, 2000: 486). The transnational Guggenheim partnership could be seen as
a creative strategic alliance entered into by a declining city on the European periphery to
consolidate a cultural niche on the global stage paying economic dividend at home.
However, other voices were heard in the debate about regenerating and reinventing Bilbao.
These local voices supported the cultural focus in general, but took issue with its implementation
in what came to be viewed negatively as a prestige project narrowly tied to place marketing. In
her study of Bilbao’s cultural strategy, Julia M. Gonzalez describes this orientation:
In the second, alternative scenario citizens felt that Bilbao should look for a model of
development based upon indigenous strengths more aimed at meeting the needs of
local residents. The main policy objective in this case would be the decentralisation
of services so that all citizens share the benefits flowing from the implementation of
cultural policies and participate in city development. In particular, there should be
greater concern for the deprived areas of the city. Cultural facilities should be small,
manageable and well distributed throughout the city’s barrios. … cultural policy in
this scenario should be related to real needs of inhabitants and concerned primarily
with social and community development (Gonzalez, 1993: 85).
Given its high profile, it is not surprising that the Guggenheim Museum became the flashpoint
for this clash of visions. According to Donald McNeill, critics derided the process as
“McGuggenisation,” questioning the project’s global franchising strategy, the commodification
of art, and the American cultural dominance (McNeill, 2000: 481-483). Critics were equally
dismayed by the public resources consumed by the project, totaling some $170 million for the
building, the museum collection, and the franchise fee paid by the Basque government to the
Guggenheim. The point was that some, or even most of this total could have assisted local artists
and indigenous cultural movements. Put differently, as an economic strategy, the Guggenheim
model was too much about immediate consumption and not enough about nurturing local
production. Lastly, the linkage effects of the cultural cluster were rejected on equity grounds:
housing pricing shot upward due to land speculation in neighbourhoods beside the revitalized
38 June 2003 Canadian Policy Research Networks
district (Rodriguez et al., 2001: 173). The leadership of Bilbao Ria 2000 was challenged for
making commercial viability and profit the overriding criteria for urban regeneration, limiting
the prospects for derelict areas outside the cultural cluster.
Here, the Bilbao regeneration process has benefited from the European Union’s Urban Pilot Projects,
which ran for four years in parallel with the city’s main cluster strategy (EUROPA, 2002). In effect,
the EU intervention has filled in some of the gaps associated with that approach. The EU program
targeted disadvantaged neighbourhoods, adopting a more integrated approach to regeneration
combining employment and training measures with building restoration and environmental
improvement programs. In implementation, the project adopted a principle of “self-rehabilitation,”
with training provided to equip local actors – residents’ associations, public authorities, and local
businesses – to manage together their community renewal. One of the most compelling features of
the EU program as it relates the larger city strategy was its emphasis on grassroots cultural projects,
for example, development of local music and craft centres nurturing and showcasing local talent.
Role of Government
Clearly, the 1990s was a decade of extraordinary activism in Bilbao, with different levels of
government acting as catalysts for local partnerships. The Basque regional government led the
negotiations for the showcase Guggenheim Museum, while metropolitan officials empowered
Bilbao Ria 2000 and Bilbao Metropoli-30 to coordinate full implementation of the cultural cluster
strategy. However, as various scholars have described, the governments were vulnerable to
charges that their regeneration model was not sufficiently holistic in the sense that the emphasis on
high culture, global presence, and property revitalization cast aside social concerns, and popular
input into the implementation of the new urban plans. As Julia M. Gonzalez concluded: “the
intentions of the early stages of the Bilbao plan suggest that there has been an almost complete lack
of communication on these issues so that economic regeneration and social regeneration appear as
irreconcilable objectives” (Gonzalez, 1993: 85). While the EU played an important flanking role,
it would seem that a more integrated metropolitan policy framework should now be a priority.
Economic Development Partnerships: Halifax, Nova Scotia
Background and Main Achievements
In 1996, in an effort to improve government efficiencies and end inter-municipal administrative
conflict and economic competition, the province of Nova Scotia created a new regional
government amalgamating four existing structures – Halifax, Bedford, Dartmouth and Halifax
County. The consolidated Halifax Regional Municipality (HRM) has a population of 359,183,
comprising 37.5 percent of the provincial total and covering 10.6 percent of the land mass. In
the wake of this ambitious and controversial reorganization of local government, Halifax has
garnered attention for its innovative approach to fostering regional economic development.
Much of the progress has been the result of two new partnership agencies, the Greater Halifax
Partnership (GHP) and the Halifax Regional Development Agency (HRDA). They have
demonstrated leadership in building a region-wide unity of economic purpose in the sprawling
new city. Specifically, they have each contributed to a more coordinated and sustainable
regional development strategy, replacing an earlier destructive pattern of inter-municipal
Cities and Communities that Work: Innovative Practices, Enabling Policies 39
investment competition that undervalued industrial land and encouraged subsidy wars for “big
box” retailers. Instead, the new institutions present an integrated and complementary approach
to development: the GHP primarily serves a business constituency rooted in the central business
district and seeking to build internationally competitive clusters in key sectors. The HRDA
serves a social community constituency with a mandate to devise inclusive strategies that reach
vulnerable residents in the inner city and outlying suburban and rural areas. With these two
agencies in place, local actors in Halifax are building the institutional capacity to simultaneously
address the particular social and economic challenges faced by citizens and firms making the
transition to the new economy.
Table 8.
Economic Development Partnerships
Key Actors Description
Greater Halifax Partnership (GHP)
The GHP was created in the mid-1990s as a partnership of the Halifax
Chamber of Commerce and the Halifax Regional Municipality, with
support from the provincial and federal governments. It is governed
by a board of directors, with broad representation from the private,
public, and educational sectors. Its core goals focus on business
development, investment attraction, city marketing, and networking to
meet technology and training needs.
Halifax Regional Development
Agency (HRDA)
The provincial government established the HRDA in 1998, replacing
the Industrial Commissions from the 1960s and refocusing the
development mandate from investment attraction to nurturing local
entrepreneurship, building community capacity, and circulating “best
practice” lessons. Funding for the HRDA comes from all three levels
of government, and governance comes from a board of directors
composed of community, private sector and municipal interests.
Halifax Regional Municipality (HRM)
The amalgamated regional government has launched extensive
public consultations as part of its planning efforts to consolidate the
new city.
Federal and provincial governments
Upper level governments have supported the local partnerships, using
a range of tools from direct funding to participation in governance
The Innovation Process
In Halifax, innovation in the areas of economic and community development has occurred in the
context of a growing appreciation of the limits of the existing provincial legislative framework.
Policy learning is amply evident. In Nova Scotia from the 1960s to the 1980s, Industrial
Commissions enabled and encouraged municipalities to build industrial parks, offering serviced
land and physical infrastructure to incoming manufacturers (Millward and Dickey, 1994).
Created in a period of relative economic prosperity in the 1960s, the Industrial Commission
framework functioned initially without great controversy, as manufacturing generally expanded
across the region. The prevailing economic development philosophy was rather passive, or at
least not terribly creative. As one analyst said about the industrial park, the approach was “build
it and they will come” (Dann, 2000: 20). By the early 1970s, four Industrial Commissions in the
Halifax-Dartmouth area had built eight industrial parks.
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However, the economic downturn of the late 1970s and early 1980s changed the equation. A
consequence of the Industrial Commissions framework in the Halifax-Dartmouth city region was
an intensive form of inter-municipal competition to attract investment (Sancton, 2000: 97). The
game was played by packaging generous incentives and concessions to firms expressing an
interest in a park location. Municipal development strategy amounted to little more than a
competition among industrial park managers to supply the lowest cost place for production in the
region. As the economic slowdown deepened into recession, a number of intertwined, negative
dynamics surfaced. Industrial restructuring left a dwindling manufacturing base in the region
and recruiters for industrial parks shifted their attention to the retail sector.
By the 1990s, this sector was undergoing its own restructuring, expressed in the ascendancy of
so-called big box retailers preferring to locate at the outskirts of cities. In a well-publicized case
of Store Wars in 1992, two or three industrial parks engaged in what the Atlantic Provinces
Economic Council described as destructive competitive and “beggar thy neighbour” tactics to
land an outlet of the Montreal-based Price Club. In the end, the winning Halifax Industrial
Commission enticed the firm to its Bayers Lake industrial park by selling the land below market
value and committing road extensions (Dann, 2000: 21). The problems were evident: foregone
public revenues and costly infrastructure expenditures; a suburbanization of retail activity
threatening the vitality of the downtown core’s economic base; and large opportunity costs
resulting from the public subsidies, given that the Price Club had already agreed to locate in the
region and was thus able to play off specific municipalities.
It is against this backdrop that the last decade’s policy learning has occurred, engaging a number
of actors and organizations. A consensus of sorts emerged in the mid-1990s that the existing
approach to economic development was unsustainable and irresponsible. This sentiment was
expressed early in the amalgamation process by the municipal reform commissioner who called
for a more coherent structure and approach (Dann, 2000: 12). The Halifax Board of Trade and
Metropolitan Chamber of Commerce, the four municipalities, and the provincial government
reached the same conclusion. The result was considerable institutional innovation to carry
forward new ideas about local economic development. These ideas stressed endogenous
development (OECD, 2001a: 27). Emphasis was on the nurturing of local assets over external
business attraction, more attention to social and community dimensions of economic change, and
greater cooperation at the regional scale among local actors to better coordinate development
The first institutional innovation came in 1996 with the formation of the Greater Halifax
Partnership (GHP). The newly amalgamated HRM government passed direct control for
economic development to the new body which, in its region-wide coverage, public-private
financing, and private sector leadership, represented a novel approach in Canada. The GHP’s
mission is to “leverage the region’s intellectual and technological assets to generate new
employment and increase Greater Halifax’s international profile” (Greater Halifax Partnership,
2002). Jointly funded by the public and private sector, around 60 percent of the GHP’s annual
budget comes from local businesses participating in its “investor network.” Its governance
structure features a broad cross-section of business, university leaders, and representatives from
all three levels of government. GHP services and networking targets four sectors: energy,
biotechnology, information technology and transportation. Referencing research to the effect
Cities and Communities that Work: Innovative Practices, Enabling Policies 41
that 80 percent of expected job growth in the region will be created by businesses already in the
region, the GHP “focuses the majority of its resources on supporting and growing local
businesses, not on attracting new businesses” (Greater Halifax Partnership, 2002: 4).
Numerous GHP initiatives have been implemented since 1996 to advance the mission. In 1998,
it created the Halifax Equity Group to help fund small- and medium-sized businesses and supply
venture capital for start-ups in the four priority sectors. Global business-to-business GHP
networking arrangements now include Mexico, Sweden, and the Caribbean. Another aspect of
this outreach is the recent step taken with counterpart organizations in Moncton to create a cross-
provincial growth corridor (El Baroudi, 2003). Most ambitiously, the GHP has partnered with
the federal government to provide funding for an offshore energy strategy that would position
Halifax as the site for an oil and gas industry cluster. In 2002, the GHP worked successfully to
have Halifax included in a global partnership of World Energy Cities. Comprised of 11 cities,
the partnership is a forum to exchange industry knowledge and provide shared access to
worldwide support services and resources. From the GHP’s perspective, the world network
presents “an opportunity to learn and benefit from the experience of other member cities – some
of which have been involved in the oil and gas industry for decades” (Dempsey, 2002).
The second significant institutional innovation in the 1990s, moving economic development in
Halifax beyond the Industrial Commissions framework, was the formation of the Halifax
Regional Development Agency (HRDA). The Nova Scotia government created the HRDA to
replace the Industrial Commissions, with a mandate to support community economic
development, build volunteer capacity, and forge inter-sector partnerships. The provincial,
federal, and municipal governments jointly fund the HRDA. The HRDA was explicit about the
holistic model informing its approach to development:
Community economic development is a comprehensive approach which recognizes
the interdependence of the economic, social, and cultural aspects of community life
and seeks to find solutions to related problems. For example, the “social” problem of
crime is often linked to high levels of poverty and unemployment – an “economic”
problem. The solutions to these are inseparable and demand common action at a
variety of levels including the work of businesses, church groups, community service
associations, neighbourhood organizations, educational institutions, and government
agencies (Halifax County Regional Development Agency, 2002).
This inclusive approach to problem definition also informs the governance and organizational
structure of the HRDA. The board of directors is composed of community, private sector and
municipal representatives. Consistent with principles of bottom-up or grassroots community
action, the HRDA is evolving its own decentralized form of organization to allow maximum
participation across the large geographical space of the amalgamated city region. Under the
HRDA umbrella, two further networks have been proposed: Local Development Associations to
co-ordinate services at the sub-regional level, and Community Development Groups to lead
strategic planning and project implementation in specific neighbourhoods. In turn, the HRDA
board will include representatives from the lower tier bodies. Like the GHP, the HRDA has
numerous projects underway, many of them combining small business formation with eco-
tourism and heritage preservation in the HRM’s outlying areas. A key priority is community
42 June 2003 Canadian Policy Research Networks
capacity building, with the HRDA develop training guides, tool kits, and workshops to help
volunteers and community groups manage their projects.
In sum, since the municipal amalgamation, local actors in Halifax have introduced significant
innovations taking the region’s economic development practices well beyond an entrenched and
highly problematic framework. Destructive inter-municipal competition and land “giveaways”
by Industrial Commissions have been replaced by a region-wide partnership process that focuses
on local assets and building from within. Two new organizations, the GHP and the HRDA are
carrying forward the new approach, complementing each other’s efforts. The GHP’s key
constituency is larger businesses, many with global aspirations and mostly located in and around
the urban core. The HRDA’s key constituency is community-scale business, with primarily local
horizons, and mostly located in the outer suburban and rural parts of the region.
In this sense, Halifax is a city region with two quite robust institutional intermediaries serving
the needs of different constituencies. One challenge for the future will be to address in a
systematic way the synergies, or at least points of intersection, between these partnership bodies
so as to avoid institutionalizing a divide between the social and economic dimensions of
Role of Government
Government has played a central role in Halifax’s innovations. Provincial legislative change in
1994 replaced an outdated economic development framework with the HRDA. Additionally, the
federal government has contributed financial support to initiatives launched by both the HRDA
and the GHP.
For its part, in 1999 the newly enlarged municipal government launched a year-long, extensive
community consultation to develop a common vision and strategic directions to guide
development of the region (Halifax Regional Municipality, 2002). Of course, the democratic and
administrative merits of the provincial government’s decision to amalgamate the four
municipalities continue to be debated (Sancton, 2000). But there is virtually no debate about the
fact that the regionalization of the economic development function was a welcome departure
contributing to the city’s overall well-being and future prosperity. Further proof of this is an
innovation at the Burnside Industrial Park. Once widely known as a major player in regional
Store Wars, the Burnside Park has now been recognized for its efforts to become an “industrial
ecosystem” (Tomalty, 1999-2000). The merger of economic and environmental goals has come
through collaboration among the park’s businesses, the three levels of government, Nova Scotia
Power, and Dalhousie University. The project is creating “tools and strategies to promote
materials and energy exchanges among firms in the park, along with waste reduction and
improved environmental performance within firms” (Tomalty, 1999-2000). It is hoped that the
project will become a catalyst for industrial ecosystems in other business parks across the
Cities and Communities that Work: Innovative Practices, Enabling Policies 43
Institutionalizing Social Partnerships: Dublin, Ireland
Background and Main Achievements
In the 1980s, Ireland’s poor economic performance produced widespread dissatisfaction with the
traditional macroeconomic approaches and tools. To explore alternatives, a national forum was
convened among various economic and social groups resulting in the institutionalization of a
social partnership strategy to improve national economic performance. The success of this
national-scale initiative led local actors in Ireland to consider its application to cities and towns,
where problems of spatially concentrated poverty and high unemployment remained, in spite of
improved macroeconomic performance. Recognizing the weaknesses in existing local
governments to tackle these problems on their own, Irish decision makers focused on building
public-private partnerships in communities.
Table 9.
Institutionalizing Social Partnerships
Key Actors Description
Social Partners Business associations and trade unions supplied the initial impetus for
the local partnerships through their example of productive collaboration.
Area Development
Management Ltd. (ADM)
An independent national institution that assists local partnerships with a
host of organizational and management functions. ADM is a strong
institutional intermediary between the national government and the local
partnerships. It works with government to determine financial
allocations to partnerships, tailor national policy to local conditions, and
coordinate partnership evaluations. It also assists local partnerships
with technical support, information exchange, and lesson drawing.
This is a network with a small secretariat created by the local
partnerships themselves to coordinate their work, develop a common
voice, and represent the views of the partnerships to ADM and national
policy makers.
County and City Development
Boards (CDBs)
These boards were established in 2000 to better link the area-based
partnerships to local governments, and improve coordination of the
activities of elected councils and partnership bodies. The CDBs have a
governance structure comprised of local government, local partnership
bodies, social partners, and state agencies.
National government
The Irish government has made local partnerships a priority in its
National Development Plans, and working with the ADM has modified
centralized public administration to incorporate local input and facilitate
bottom-up development.
European Union
The European Union has been a key player in the Irish process, given
the EU’s emphasis on social cohesion, subsidiarity and partnership in
policy implementation, and Ireland’s priority status for funding as a less
favoured part of the Union. The EU has supported different components
related to anti-poverty, long-term unemployment, urban regeneration,
rural development, and integrated economic and social priorities.
44 June 2003 Canadian Policy Research Networks
Today, Irish partnerships are widely viewed in Europe as the model for collaborative local
governance. Area-based projects have achieved positive outcomes along a number of lines: the
formation of a “thick” institutional infrastructure for managing and steering public-private
partnerships; the mainstreaming of local pilot projects into national policy; and extension of the
initial focus on poverty and social exclusion to strategies for innovative business development,
for example, in Dublin’s emerging multi-media digital hub.
The Innovation Process
Dublin (population 1,122,600) has been a geographical focal point in Ireland’s local
partnerships. The Irish approach has a number of distinctive features that have brought it
recognition. A recent OECD survey of local partnerships stated that the Irish partnership model
“enjoys a reputation for innovation in local governance and energetic action on unemployment
and poverty that is unmatched in Europe” (Turok, 2001: 132). Similarly, Jim Walsh, Sarah
Craig, and Des McCaffery, in their detailed case study examination of Irish social partnerships,
make the point that Ireland’s progress with “local initiatives on unemployment and local
developments has reversed the traditional pupil-teacher relationship between Ireland and the EU”
(Walsh et al., 1998: 63). Today, they note that the EU and other bodies are “looking to Ireland
for answers.” Even analysts, critical of public-private partnerships for not fully representing
social and popular interests, acknowledge that the Irish approach has managed to involve a
broader range of actors than is the norm, including trade unions and anti-poverty associations
(Geddes, 2000: 788).
The basic dynamic of the Irish model has been successful transfer of the national-level social
partnerships, geared to finding consensus on macroeconomic policy, down to the local scale of
area-based collaboration (Sabel, 1996; Turok, 2001). Recognizing that existing local
governments in Ireland were ill equipped to lead the process, Irish policy officials focused on
building a strong public-private institutional framework both to coordinate the policy
interventions of the national government and to bring together representatives of community
interests. The Irish approach has been unusually systematic in its effort to engage strategic
brokers at the local scale for community-based partnerships and to support them through
institutional intermediaries connected to upper level governments.
The effort has been driven from above through a combination of EU funding and national
government policy. Crucial here were two major thrusts from 1994 to 1999: the Irish
government’s National Development Plan, which formalized the state’s commitment to local
adaptation of economic and social policies, and the EU’s Community Support Framework
targeted at disadvantaged communities displaying a collective will to maximize their
development potential. Social inclusion was the integrating thrust with priority given to services
for at risk and marginalized people such as the long-term unemployed and young people leaving
school early (Walsh et al., 1998).
On this policy and financial foundation, area-based partnerships rapidly expanded throughout
Ireland. In the late 1990s, 38 local partnerships were created, 20 of them in urban centers, with a
focus on deprived areas within Dublin, and 18 in rural communities (Turok, 2001: 137-138).
Each partnership employed a small professional staff to assist boards of directors comprised of
Cities and Communities that Work: Innovative Practices, Enabling Policies 45
representatives from the social partners (business, trade unions, and farmers where relevant),
community associations, national government departments and local officials. Decision-making
proceeded by consensus and the local boards identified priorities, created specialized working
groups, and selected projects for funding. In turn, their strategic plans and budgets were
presented for approval to another institution, the Area Development Management Ltd. (ADM),
which had been set up by the state to co-ordinate the local partnerships and allocate and monitor
their funding. Ivan Turok describes the ADM’s pivotal role as an institutional intermediary in
the local partnership process:
ADM has an important mediating role between the local partnerships and
government. Ireland is unusual among countries with local partnerships in having an
intermediary organization such as ADM. It facilitates dialogue and negotiation on
policy and procedural matters, and can protect the partnerships from ad hoc and
unhelpful intrusion. For example, the government and ministers have, by and large,
allowed ADM to determine financial allocations to the partnerships without
interference. ADM works with government policy but it is a private company and
independent of government. It seeks to extend and enhance local experiences with
technical support, to identify and promote good practice, and to inform national
policy development (Turok, 2001: 140).
Thus, the ADM connects the local actors to national resources, disseminates best practice
experiences, and promotes cross-local coordination. At the local scale, the 38 partnerships have
also established their own umbrella organization, known as Planet, to represent their collective
interests to the ADM and in wider public policy arenas. And most recently, a further
institutional layer has been added, the County Development Boards, with a mandate to ensure
appropriate participation of formal local government authorities with the intent of improving
service delivery in child care, education and other statutory programs critical to the success of
social inclusion projects brought forward by the social partners.
With this multi-layered institutional framework in place, the Irish area-based partnership model
has achieved success on a number of policy fronts. Assessments by Charles Sabel, Ivan Turok,
and other close observers, agree that the process has effectively tapped local ideas for the initial
design of national policies and mobilized community networks for their implementation. The
result has certainly been more legitimate national policy and, most likely over the long run,
better outcomes on some of society’s most intractable problems such as spatially concentrated
poverty and social exclusion. Here there are examples of important feedback and policy learning
across the levels of the partnerships. In employment policy, new strategies to reach the long-
term unemployed were implemented on a pilot basis through local partnerships and positive
results have led to extension of the program nationally. Similarly, a back to work allowance to
assist people moving off welfare and starting businesses was seeded in local partnerships and
subsequently became national policy. Along the same lines, a national labour market program to
grow the social economy worked with the local partnerships to fine-tune program design and
implementation. Indeed, because of this sensitivity to local ideas and lessons, the program was
effectively customized, becoming “more a series of separate local measures funded centrally,
rather than a standard national programme” (Turok, 2001: 161).
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Another aspect of the Irish learning dynamics has been the transfer of local partnership
approaches from the social inclusion field to address the challenges of economic development
(Hayward, n.d.). Indeed, one of the observed gaps in the initial local partnership approach was
its limited reach into business, finance and high technology networks. A broader strategy may
now be emerging, within the context of general concern about the longer-term viability of
Ireland’s historic economic development strategy which relies on attracting transnational capital
largely on the basis of a low-cost business environment.
What is in question, however, is the degree to which global actors become embedded in local
economies and participate in partnerships for technology transfer, collaborative research, and so
forth. This form of social learning for economic innovation has become a priority of Ireland’s
National Economic and Social Council. The same logic of institutional transfer from the macro
to the local scale that originally drove the social inclusion agenda informs the council’s thinking:
This approach which is referred to as ‘learning-by-exploring’ requires a network model
of enterprise support linking the ‘innovation architecture’ and the firms. … To make
such a network function, it must be recognised that consensus of the kind so usefully put
together in the social partnership arrangements at the macro-level, needs to be forged
amongst players in the innovation and enterprise support field (Hayward, n.d.: 15).
One example of progress along these lines appeared in 2002, in Dublin, where a joint venture
between the Irish and city governments resulted in “Dublin’s Digital Hub” (Department of
Enterprise, Trade and Employment, 2002). Located in a traditional industrial area in the city’s
most historic districts, the hub is to service a cluster of 20 firms, many of them Irish, in new
media research, training, and production. The nine-acre project will be managed by a multi-
stakeholder board and feature broadband connectivity, space for early stage companies, and
facilities to foster networking. It is viewed positively by local actors as urban regeneration that
links physical renewal with economic opportunity in a knowledge-based growth sector.
Role of Government
The Irish government and the EU have played the leading role in the Irish area-based partnerships.
They have supplied the crucial infrastructure and there is evidence that local experiments have
been mainstreamed to inform and improve public policy. At the same time, the governments have
evolved a quite complex institutional framework for partnership governance (i.e., ADM, Planet,
and County Development Boards). This raises two challenges – accountability and coordination.
For accountability, reporting relationships flow in numerous directions: partners are
simultaneously accountable to their individual memberships, to project funders, to one another, and
to various levels of government through the ADM. For coordination, the different bodies need to
avoid duplication of effort and ensure coherence. The national government has an important
responsibility to ensure that a robust, multi-scaled institutional network for innovation strategically
channels rather than diffuses scarce policy resources and community energies.
Cities and Communities that Work: Innovative Practices, Enabling Policies 47
2.3 Building Knowledge-Intensive Regions
This section profiles innovation processes in geographically dispersed regions seeking to build a
cohesive knowledge cluster. In such places, innovation challenges often focus on building
institutional capacities for rapid and full deployment of new information and communications
technologies. Specific priorities include networking between research institutes and small
business, the coordination of local resources at the regional scale, and “smart growth” planning
that integrates economic, environmental, and equity priorities. The three places profiled are:
Kitchener-Waterloo, Ontario; Saskatoon, Saskatchewan; and Portland, Oregon.
Making Regional Connections: Kitchener-Waterloo, Ontario
Background and Main Achievements
Kitchener and Waterloo are two medium-sized cities (Kitchener CMA population, 414,284) at
the heart of an Ontario region that have attempted to reframe a collective economic identity as
Canada’s Technology Triangle (CTT). The CTT includes two other cities, Cambridge and
Guelph, and each of the four has its own particular sectoral strengths in a region-wide economic
profile featuring heavy manufacturing, auto parts, electronics, and financial and educational
services. The economic recession of the late 1980s and early 1990s took a heavy toll on the
region, with the loss of more than 4,500 full-time manufacturing jobs, and unemployment levels
that peaked at around 15 percent in 1991. While the recovery of the late 1990s returned growth
to the region, concerns remain about many displaced workers and their families who are
struggling to make the transition to the new economy. In light of these restructuring challenges,
the Kitchener-Waterloo experience exemplifies three key issues relevant to an understanding of
the community-based innovation process:
(1) Since the 1980s, a variety of private and public sector actors and organizations have joined
together to try to consolidate the technology triangle identity through a region-wide
economic governance structure transcending the formal boundaries of the separate
(2) The process of constructing this regional governance capacity has been difficult and
uncertain in its progress, but local actors have responded creatively to the constraints and
opportunities, suggesting a community able to adapt to changing conditions and learn
through institutional experimentation.
(3) The region has recently seen the formation of a dynamic multi-stakeholder collaboration
focused on eliminating poverty by combining strategies such as asset-based development and
community economic development. This collaboration is innovative in a number of respects,
including the unique partnering of a national action research organization, philanthropic
foundations, local businesses, and municipal and regional governments.
48 June 2003 Canadian Policy Research Networks
Table 10.
Making Regional Connections
Key Actors Description
Canada’s Technology Triangle (CTT)
This is an informal economic development network and regional
economic identity launched in 1987, encompassing four
municipalities: Cambridge, Kitchener, Waterloo and Guelph.
This is a business association formed in 1997 and focused on the
specific needs of high technology firms in the CTT. A key priority
has been to forge stronger links between technology firms and the
local universities.
Canada’s Technology Triangle
Accelerator Network (CTTAN)
The network was established in 1996 through federal government’s
Community Investment Program and local corporate sponsorship.
CTTAN focuses on venture capital provision for start-up firms.
This organization emerged in 1998 through the Lutherwood
Community Opportunities Development Association in the Waterloo
Region. Adopting a multi-stakeholder strategy, it set targets to help
2,000 households move out of poverty by 2000, and to build the
community’s capacity to combat poverty over the long term. The
Caledon Institute has participated through action research.
The four local governments, particularly their economic
development departments, have been attempting to cooperate to
realize the CTT vision for the region. Upper level governments
have contributed to specific innovation projects such as the CTTAN
and, more generally, to the area’s knowledge base in the
universities and Centres of Excellence. In social innovation, federal
and provincial policy support for the goals of Opportunities2000 has
been uneven.
Post-secondary educational institutions
Three local area universities and a community college have
supplied labour market skills and, in some instances, worked more
formally with agencies such as Communitech and CTTAN for
knowledge transfer and technological innovation.
The Innovation Process
The Kitchener-Waterloo innovation story begins with a concerted effort to build a regional
economic governance capacity that transcended municipal administrative and political boundaries.
The challenge was to establish institutions and networks at a scale suited to emerging competitive
challenges in the North American and global economy, overcoming various forms of resistance
and inertia. The first initiative was launched in 1987, when the economic development officers of
the four municipalities joined together to form Canada’s Technology Triangle. Recognizing the
costs of inter-municipal investment competition and the need for greater cooperation in the face of
an intensive economic restructuring of the region’s traditional manufacturing base, the CTT began
as a joint marketing initiative for the municipalities. From this modest start, it was hoped that an
Cities and Communities that Work: Innovative Practices, Enabling Policies 49
institutional foundation might evolve for public-private collaboration throughout the region. In
developmental terms, the policy progression would be from external investment campaigns to
internal innovation fully mobilizing the region’s assets in technology, post-secondary education,
and financial services (Roy, 1998).
In its first decade of existence, the CTT made some progress. It consolidated a regional database
of economic and statistical indicators, it marketed the region effectively in Canada and globally,
and it generated awareness of the area’s potential high technology clusters. However, when it
came to strengthening the institutional fabric of the region, the CTT has been judged to be more
of a failure (Leibovitz, 2001). Linkages were not built between firms and the region’s
knowledge centers in the universities and community colleges. More broadly, no governance
mechanism emerged from the CTT for public-private partnership or joint planning. Such
institution building was frustrated by a combination of municipal resistance, a lack of trust
among firms and the inability of private-sector umbrella associations such as chambers of
commerce to bridge their differences and coalesce support behind the CTT. Indeed, the CTT
itself even came in for criticism from member municipalities, particularly Kitchener, for its
failure to produce a coordinated regional development plan. As such, the CTT was not
functioning as a strong institutional intermediary for partnership processes. Jeffrey Roy
summarized the situation:
In fact, with the disconnectedness between the private sector and the CTT initiative
the sectoral separation of state and market has resulted in an under-utilisation of
region capacities.… The implications for the performance of the region is an
underdevelopment of integrative synergies between industries, governments and
communities in each of the municipalities despite the growing, and largely undisputed
evidence pointing to their economic interdependence (Roy, 1998: 251).
At this juncture in the region’s history, two new organizations emerged to advance the vision
animating the CTT. The first organization was Communitech, an industry association founded
by the president of a leading software firm. Its specific focus was on high technology firms,
building the infrastructure for clustering. Unlike existing representative bodies such as
municipally focused chambers of commerce, Communitech organized itself on the regional scale
of the CTT. As such, its networks were confined to one sector (high technology), but in their
geographic reach crossed the four municipalities. Started with 45 founding members, its
membership grew rapidly to about 300 members, encompassing business services to assist
technology cluster formation (Gertler and Wolfe, 2002: 30).
Communitech’s activities included developing collaborative training, research and development,
and brokering access to export markets. A key priority was forging linkages between business
and education sectors, taking advantage of the strong and diversified research base in the
region’s three universities: engineering and computer science at the University of Waterloo,
finance and business administration at Wilfrid Laurier University, and biotechnology and
agricultural science at the University of Guelph. In seeking these knowledge-transfer
relationships, Communitech also undertook to represent the needs of its member firms in
provincial and national science and technology policy circles.
50 June 2003 Canadian Policy Research Networks
This public policy orientation was evident in the second key organization emerging to fill in
the CTT’s institutional space. Created in 1996, Canada’s Technology Triangle Accelerator
Network (CTTAN) has been described as “an important landmark in regional institutional
development because for the first time since CTT’s establishment private sector actors and
government officials became directly involved in the process of partnership formation”
(Leibovitz, 2001: 193).
In fact, CTTAN’s emergence underlines the significance of the federal role in local innovation.
The Canada Community Investment Program was the catalyst, making available initial funding
for community-based organizations to assist with small business start-ups. In this case, the
program was available only to those communities that established a partnership structure and
secured commitment from the private sector to provide matching funds and ongoing leadership
in fund management. Local actors from across the CTT took advantage of the opportunity to
organize themselves to secure the federal money, using it to institutionalize a venture capital
network in the form of the CTTAN, linking fledgling firms with equity investors.
Thus, Communitech and CTTAN have gone some distance toward building an economic
governance capacity at the regional level in Canada’s Technology Triangle. They have done so
by concentrating their focus on the needs of high technology sectors and business start-ups, and
by drawing down resources from upper level governments. As such, these organizations have
been viewed as a “critical mass which can encourage others, such as the educational institutions
to network the CTT identity intensively across the region” (Roy, 1998: 252). In a comparative
study of local economic collaborations in Ontario, Meric S. Gertler and David A. Wolfe
conclude that the CTT’s “forms of associative governance” have strengthened strategic alliances
in the area while attracting “expatriate entrepreneurs and innovators to return to the local
economy and even attracting the attention of foreign venture capitalists to invest in the regional
economy” (Gertler and Wolfe, 2002: 35).
The third component of Kitchener-Waterloo’s community-based innovations has unfolded on the
other side of the new economy. The combination of economic recession, free trade restructuring,
deficit fighting governments, and technological change left thousands of individuals and families
in distress throughout the region. In response, two community organizations came together to
form Opportunities2000 (Hodgson, 1998). Its innovations were many, beginning with a
philosophical commitment to a “comprehensive community initiative” approach to poverty
reduction, stressing the need for multiple actors and cross-sectoral interventions.
Opportunities2000’s partnership was broad, mobilizing over 40 non-profit organizations,
business, four levels of government, and low-income residents themselves (Leviten-Reid, 2001).
The partners were grouped in sectoral action teams to help extend and expand the network. In its
first phase of operation, 49 specific poverty reduction projects were initiated or sustained,
involving 1,600 low-income participants. The projects were arranged in four streams of action:
meeting basic needs, removing barriers, developing skills, and promoting local enterprises. An
evaluation framework sought to measure progress in ending poverty at three distinct scales:
individual, organizational, and community-wide. Initial surveys found that nearly half the
individuals had seen an increase in personal and household incomes, and that virtually all of the
partners had seen their organizational capacities to fight poverty enhanced. The core organizing
Cities and Communities that Work: Innovative Practices, Enabling Policies 51
team also presented the project to the region’s local governments, challenging them to develop
their own anti-poverty strategies (City of Kitchener, 2000).
Opportunity2000’s core organizing team was an effective institutional intermediary for the
partnerships, animating the local networks while also securing a range of external resources,
from funding to technical assistance and research expertise. A notable feature of the
Opportunities2000 design was the action research role played by the national social policy
institute, the Caledon Institute. It assisted with basic research functions such as data collection,
project design and outcomes evaluation, and also connected the local project to a national
network of community-based anti-poverty initiatives (Caledon Institute, 2001).
With completion of its first phase, Opportunities2000 has launched a new plan to prevent youth
from entering the cycle of poverty and to address the needs of the working poor. This phase runs
from 2002 to 2005, engaging a new roster of partners from the private, public and third sectors
(Turning Point, 2001).
Role of Government
Economic development officers in the four municipalities conceived Canada’s Technology
Triangle as a strategy to improve regional economic coordination and planning. However,
historic tensions and rivalries most evident at the political level stalled its development across the
In these circumstances, further progress depended more on private sector leadership, which
eventually arrived in the form of two region-wide high technology organizations. Also critical
was the role of the federal government’s grant program that became a catalyst for such regional
business networking. Upper level governments were also important in shaping the course of
Opportunities2000, the CTT’s major social policy innovation. In this case, some local actors
involved in anti-poverty work reported that federal and provincial deficit reduction strategies,
and “a series of counterproductive government policies” made progress more difficult (Leviten-
Reid, 2001: 60). Here more feedback and better learning between the community and
government policy makers, specifically input from representatives of the region’s growing
disadvantaged population, could have made a difference.
Indeed, one overarching pattern in the Kitchener-Waterloo case is the relative absence of
integration between economic and social innovations achieved, respectively, by the CTT and
Opportunities2002. The institutional architecture of the CTT, based in technology organizations
like Communitech and CTTAN, offered no representation to trade union interests, environmental
groups, or social planning bodies (Leibovitz, 2001). In short, there was little evidence of
synergies between the two quite robust partnership networks working on the economic and social
sides of the new economy.
52 June 2003 Canadian Policy Research Networks
Towards Inclusive Clusters: Saskatoon, Saskatchewan
Background and Main Achievements
Saskatoon is a medium-sized regional centre with a population of 225,927. Its boundaries
include 23 rural municipalities and one First Nations Reserve. In 2001, Saskatoon’s economy
represented nearly 22 percent of Saskatchewan’s total provincial GDP. The economy is a major
service and supply centre for Saskatchewan’s agricultural sector and it also has strengths in
mining, forest products, financial, and insurance services. Recently, a number of knowledge-
based, high technology companies closely linked to the University of Saskatchewan have
established a strong presence in the region.
Saskatoon has made progress on a number of economic and social fronts through local
partnerships, enabled by provincial and federal policies. Three areas of achievement stand out.
First, Saskatoon has taken maximum advantage of its natural assets in relation to agricultural
production. It has developed a canola-based biotechnology cluster that occupies an innovative
niche in a larger global production system. Relatedly, local actors in Saskatoon have formed a
Saskatchewan Nutraceutical Network that has been ranked as one of four top global functional
food networks servicing the needs of the sector. Nutraceuticals are products isolated or purified
from foods and sold in medicinal forms not usually associated with food.
In social and cultural areas of innovation, Saskatoon also merits attention. On the one hand, it
has supported a nationally recognized community development housing corporation deploying a
range of strategies to empower low-income residents. On the other hand, the city’s main
business association has joined with First Nations organizations to build cross-cultural
understandings among employers and the region’s growing Aboriginal labour force, and to
implement specific joint programs to train and employ Aboriginal youth. This latter initiative is
especially noteworthy given that Aboriginal residents, in 1996, accounted for a larger of portion
of Saskatoon’s population than any other city in Canada, and nearly 50 percent of the Aboriginal
population was under 20.
The Innovation Process
The Saskatoon Regional Economic Development Authority (SREDA) has been at the centre of
much of the city’s recent innovative activity (Federation of Canadian Municipalities, 2002).
This economic development organization has participated in three major projects: (1) the
strengthening of Saskatoon’s world scale cluster in the canola-based biotechnology industry;
(2) the rapid rise of the local nutraceutical industry; and (3) the unique arrangement with
Aboriginal leaders for education, training and employment. With each of these initiatives,
SREDA has acted as a catalyst and partner, finding creative ways to realize its mission of
growing a diversified local economy.
Cities and Communities that Work: Innovative Practices, Enabling Policies 53
Table 11.
Towards Inclusive Clusters
Key Actors Description
Saskatoon Regional Economic
Development Authority (SREDA)
This agency was incorporated in 1993 and now has a membership
of 240 private and public sector companies. An elected board of
governors oversees SREDA along with public sector
representatives from the City of Saskatoon and the rural
Federation of Saskatchewan Indian
Nations’ (FSIN) Corporate Circle
The Corporate Circle was established in partnership with the
SREDA to increase employment opportunities for First Nations
people in Saskatoon. It facilitates networking among business
leaders and FSIN chiefs to plan projects, and now includes about
40 of the city’s and the province’s major public and private sector
Quint Development Corporation and
Quint Housing Cooperative (QHC)
This agency is a non-profit community economic development
organization formed in 1995 to provide housing and other
supports to families in five low-income neighbourhoods. The
corporation works with eight co-operatives representing
approximately 90 families.
Saskatoon Nutraceutical Network
This network is the first of its kind in Canada and a recognized
world leader in organizing services for nutraceuticals. The network
was formed in 1997 in partnership with SREDA and, in 1998,
received a $1 million grant from the federal government’s Agri-Food
Innovation Fund.
Innovation Place
This university-based research park opened in 1977, and is home
to Saskatoon’s agri-science and biotechnology cluster.
Approximately 120 organizations are based in the park, including
federal and provincial research agencies such as the National
Research Council’s Plant Biotechnology Institute and the
Saskatchewan Research Council. Activities in Innovation Place
contribute an estimated $250 million per year to the Saskatoon
The key engine for the Saskatoon economy is the globally competitive canola oilseeds complex at
the Innovation Place research park. The origins of the cluster are found in the 1940s, with public
research programs undertaken by Agriculture Canada and the NRC (Phillips, 2002). On this
foundation, knowledge-intensive firms in Saskatoon have secured a dynamic niche in the global
industry. The structure of Saskatoon’s canola cluster has been closely analyzed by Peter W.B.
Phillips. He tracks the historical evolution of the cluster into its present day form as an “innovation
entrepot.” In this model, the Saskatoon cluster imports much of the basic research and patentable
technologies for the industry, but then adds value at later stages in the production process.
Phillips terms these later stages as the “know-how and know-who” components of innovation,
where the kind of intensive face-to-face relations among researchers and firms in laboratories
and greenhouses enabled by Saskatoon’s Innovation Place are critical (Phillips, 2002: 38-39).
Such networks drive further development and commercialization of research breakthroughs
occurring elsewhere. The “non-competitive environment” of Saskatoon’s public research
54 June 2003 Canadian Policy Research Networks
centres, principally the facilities of the NRC and Agriculture and Agri-Food Canada, provide the
setting for the informal learning that leads to new plant varieties and their marketing. Phillips
explains the Saskatoon innovation milieux:
The generation and transmission of the non-codified knowledge in the regional
system is the key factor holding things together. People develop skills and working
relationships that, together, convert bits of information into operable knowledge.
This tacit type of knowledge is learned almost exclusively through experience.
Researchers learn how to do things and whom to work with through trial and error.
… Hence, although Monsanto and AgrEvo (now Aventis), for instance, both have
giant research “universities” and labs at their headquarters, both have collaborated
extensively in Saskatoon with both the AAFC and the NRC (Phillips, 2002: 44-45).
The Saskatoon region offers further downstream advantages for the canola cluster. The
Canadian prairies feature well-developed farmer producer networks and grower associations,
ranging from co-operatives to the Canola Council of Canada, that facilitate wholesaling of new
plant varieties and application of new production technologies. In addition, cluster leaders have
used global work exchanges and guest researcher arrangements to nurture a knowledge-intensive
“thick” local labour market, featuring one of the world’s largest geographic concentrations of
research scientists in agricultural biotechnology.
Another related sectoral innovation where SREDA has been active is nutraceuticals. A
partnership between SREDA and the Saskatoon Nutraceutical Network (SNN) is positioning the
city to become a world leader in nutraceutical and functional foods production. SREDA has
established a nutraceutical Industry Advisory Council to bring together various industry
suppliers and related companies to better understand the sector and its local potential (Prairie
Partnerschaft, 2002). The industry has been advanced by research support from federal and
provincial governments in the form of the Agri-Food Innovation Fund and NRC’s official
recognition of Saskatoon as Canada’s leading nutraceutical centre.
The NRC allocated technology cluster funding to the Saskatoon Plant Biotechnology Institute for
research into crops for enhancing human health. For its part, the SNN represents and services the
needs of companies, growers, trade associations, research facilities and government organizations.
Given the relatively new nature of the industry, the SNN plays an important role in raising
awareness of growth potential among venture capitalists, distributing and marketing companies,
and among governments in respect of regulations affecting product development. SNN has been
recognized as the world leader among nutraceutical industry networks, “forging exciting new
agendas and ‘models’ for functional foods/nutraceutical centers” and providing “direction and
momentum and an international perspective for things which were previously happening as ad hoc
one-on-one university/company co-operations” (Heasman and Mellentin, 2001).
SREDA’s other key initiative relates to its partnership with local Aboriginal leaders – the only
one of its kind in Canada (Saskatoon Regional Economic Development Authority, Inc., 2002).
With the continued rapid growth of Saskatoon’s Aboriginal youth population, the initiative
launched in 2001 was obviously timely. It offered employment, training, and business
opportunities to a historically disadvantaged community in the labour market while also
Cities and Communities that Work: Innovative Practices, Enabling Policies 55
networking local employers into a large potential talent pool and customer base. To realize its
objectives, the cross-cultural partnership identified a number of priorities:
Deliver training in cultural understanding for business owners and managers;
Deliver best practice Aboriginal recruitment information;
Facilitate recruitment of graduates from First Nations training institutions;
Promote an Aboriginal Youth Career Symposium;
Ensure First Nations groups are involved in trade missions; and
Involve Treaty Land Entitlement fund managers in investment networks.
In 2002, the Employer Circles Program graduated its first 14 employers, created 100 new jobs
for Aboriginal people in Saskatoon, and visited high school and post-secondary education
institutions across the region. Plans are now underway to expand the program throughout the
province. In sum, this partnership bridges two key communities in Saskatoon who have long
been distant from one another. Chief George Lafond of the Saskatoon Tribal Council
summarized: “As a local grassroots organization, we have access to individuals who need these
important employment opportunities. We now also have the critical linkages of SREDA, a group
that can bring employers to the table” (Saskatoon Regional Economic Development Authority,
Inc., 2002).
The final notable local innovation in Saskatoon involves affordable housing and community
economic development (Usiskin, Szejvolt, and Keeling, 2001). Following the dramatic
reduction in federal and provincial support for social housing in the mid-1990s, local actors in
Saskatoon mobilized creatively. To begin, they reframed the housing question as a broader issue
of community development emphasizing social networks and neighbourhood capacity building
that can widen access to home ownership. A catalyst was the Quint Housing Co-operative,
which pulled together diverse actors in the sector – credit unions, contractors, real estate
developers, lawyers, insurance companies, and governments – behind a new housing strategy for
low-income neighbourhoods. Each partner was asked to contribute technical support to the
project or offer their services at preferred rates to potential homeowners. The target group was
families with children and youth, earning less than $30,000 in total income, and ineligible for
traditional mortgages. The QHC focused initially on helping with the downpayment, the major
barrier facing low-income families. It then assisted with development of “homeowner skills”
and management of housing co-operatives, lending guidance on often complex questions of
financing and membership responsibilities.
The QHC also linked the housing strategy to community economic development (Usiskin,
Szejvolt, and Keeling, 2001: 6). Securing grants from the federal and provincial governments, it
created a number of spin-offs: the Bent Nail Tool Cooperative offered training in housing
renovations for unemployed co-op residents; the Pleasant Hill Place combined school, health and
social service resources to offer housing for teenage single mothers trying to complete their
education; and the Support for Small Business Program that assisted low-income people in
starting their own co-operative businesses.
56 June 2003 Canadian Policy Research Networks
Initial assessments of the QHC indicate some important achievements. Surveys revealed that the
participants themselves had made progress, with the vast majority of co-op members moving off
social assistance into paid employment. In addition, other residents in the neighbourhood have
supported the co-op houses, suggesting the potential for further mixed-income communities.
Mortgage lenders acknowledge, to their surprise, that the program has been extremely reliable.
Lastly, there have been positive “neighbourhood effects” as the co-op process generates its own
form of community social capital. The related renovation programs contribute to the physical
rehabilitation of the housing stock, giving everyone a greater stake in the place and a
commitment to staying over time (Sampson, 1999).
On the basis of these developments, the QHC has attracted considerable national interest and
recognition from housing advocates, researchers, and policy makers (Canada Mortgage and
Housing Corporation, 2002). In 1998, the Saskatchewan government created a province-wide
neighbourhood home ownership program modeled on the QHC holistic approach (Mawby,
Role of Government
The innovation process in Saskatoon points to a fairly constructive pattern of relations between
local actors and governments at different levels. Locally, the SREDA and QHC have been
champions pushing forward economic and social development, and coalescing community-based
partnerships. National and provincial governments have contributed crucial funding and
infrastructure investment to support the growth and development of the canola-based
biotechnology cluster. As Phillips’ research demonstrates, the federal and provincial research
presence in Innovation Place is the indispensable foundation for the cluster’s niche as an
innovation entrepot in a dynamic global industry. In addition, the federal government’s Western
Economic Diversification organization has partnered with private financial institutions to fill a
significant venture capital gap in Saskatoon.
Of course, in the housing matters central to the QHC agenda, upper level governments in the
1990s were less constructive as their cutbacks raised the bar considerably for all community-
based social actors. Here, the City of Saskatoon took the initiative in creating a community plan
for homelessness and housing that adhered to the holistic model of causes and solutions to the
housing crisis, and also created a new office of the Housing Facilitator to lead implementation
(Mawby, 2001).
Regional Planning and Community-Building: Portland, Oregon
Background and Main Achievements
Portland’s economy began with a port for moving lumber and agricultural cargo. Over the
20th century, the city developed strengths in manufacturing (especially in semiconductors)
metalworking, wood products, high technology, and creative services. In the 1970s and 1980s,
the region further diversified its industrial mix through high technology, especially
semiconductor manufacturing. In the 1990s, the region experienced strong growth rates well
above the national average.
Cities and Communities that Work: Innovative Practices, Enabling Policies 57
Portland (population 529,121) is widely viewed as one of the most innovative cities in the United
States on a number of fronts. First and foremost, the city has developed an ambitious and
comprehensive approach to land use planning designed to contain pressures for suburbanization,
retain a vibrant downtown core, and preserve farm and forest land. Regional plans give priority
to environmental concerns, specifically limits on urban sprawl, and mobilize the citizenry in
design and implementation processes. This planning model combines state-level regulation with
a directly elected regional government, a combination unusual in the American context. In
addition to its land use planning achievements, Portland has been recognized in two other areas:
its creative strategy in applying the Internet to community-building challenges in less advantaged
neighbourhoods, and its building of a dynamic economic cluster – the “Silicon Forest” – in the
absence of a world class university engaged in high technology scientific research.
Table 12.
Regional Planning and Community-Building
Key Actors Description
The key local government is an elected metropolitan body that
crosses the boundaries of 24 municipalities and three counties, and
seeks to build regional consensus on growth management, land
use and transportation planning. State and federal governments
have established, through their regulations, the context and terms
for metro-wide planning, directing local attention to the links among
economic, environmental and social development.
Civic organizations
Portland has a diffuse network of community organizations and
informal neighbourhood associations. These groups have
mobilized grassroots perspectives on issues such as regional
planning and public access to the Internet.
Tektronix and Intel
These are two large technology firms that have served, over time,
as anchors for the regional cluster known as the Silicon Forest.
Institute for Portland Metropolitan
This public policy institute based at Portland State University has
contributed action research to the community, generating profiles of
the economy, tracking environmental and social trends, and
supplying a neutral space for different actors to come together in
search of common visions and strategic plans.
The Innovation Process
In the United States, Portland is often mentioned as a leader in urban and regional development.
The conclusion of a recent study examining Internet usage in American cities is representative:
Portland emerges as the leader because its strengths cut across many dimensions. Its
combination of technological sophistication, economic vitality, commitment to
regional planning, and community engagement, and its existing infrastructure of
58 June 2003 Canadian Policy Research Networks
community nonprofits, make it the city most likely to effectively exploit the Internet
for economic and social purposes (Horrigan, 2001: 5).
The foundation for this broadly-based innovation capacity is widely understood to reside in the
city’s governance structure, which has managed to combine a strong regional planning capacity
with local community and neighbourhood input. A metro-wide elected body plays the key
role, nurturing consensus among numerous local municipalities and three counties on issues
ranging from containing urban sprawl to inter-modal transportation and mixed-income housing
development (Weir, 2000; Nelson, 1996).
In the 1990s, as physical development closed in on the state-mandated urban growth boundary,
the metro government undertook a comprehensive planning process to map development for the
next four decades. As Peter Calthorpe and William Fulton have documented, a highly
participatory process was launched, using survey research and community workshops (Calthorpe
and Fulton, 2001). The goal was to build a high degree of public understanding, first, of the
trade-offs between, for example public investment in highways or public transit, and second, of
the potential for denser development to combine economic, social, and environmental goals.
Metro staff designed alternative development scenarios for a sustainable regional city, and tested
their relative merits in six neighbourhood sites with more than 500 people participating in the
sessions. The result was a locally embedded regional vision of development respecting the
existing growth boundary.
Implementing the plan, of course, required cooperation between the metro authority and the
municipal governments. Here again Portland followed an innovative approach. The upper tier
government set out different options for implementation, allowing local officials and
neighbourhood residents communities to find their own path to meet the region-wide objectives.
The new plan, known as Region 2040, has been in place since 1996, and initial evaluations from
outside observers track some notable achievements in the American urban context: the region is
growing inward without placing exorbitant pressure on housing prices; public transit ridership
continues to grow; and construction activity is greater in the city’s geographic core than in the
surrounding metropolitan areas (Calthorpe and Fulton, 2001: 124-125).
Alongside its well-known innovations in regional planning, Portland has also received recent
national recognition for its multi-faceted commitment to maximizing the Internet’s potential for
building both the community and the economy (Horrigan, 2001). A broad cross-section of local
actors has been engaged. John B. Horrigan has described how neighbourhood associations have
developed community list-servs for diverse purposes: organizing to pressure the Metro
government to stop an environmentally negative project; connecting affordable housing providers
to low-income residents; and cultivating community leadership in neighbourhoods with substantial
numbers of female-headed households and a high incidence of domestic violence. For their part,
Metro government officials waged a high profile battle through the courts to try to preserve open
access to the Internet for all community users and ensure that telecommunications providers would
build broadband capacity throughout the city and not just in high-income areas. In addition,
Portland businesses have forged a virtual network to address a gap in venture capital by linking
technology entrepreneurs with older, more established companies and financiers.
Cities and Communities that Work: Innovative Practices, Enabling Policies 59
Another notable aspect of Portland’s development has been its emergence as a home for high
technology firms. The Silicon Forest cluster contains about 2,000 firms, employing 70,000
workers who produce semiconductors and electronics, and work in related supporting industries.
In the 1990s, the cluster grew much faster than its counterparts in other parts of the United
States, and its performance in patenting also exceeded national growth rates (Cortright and
Mayer, 2000). The striking feature of the Silicon Forest is its growth in the absence of a major
technology research institution in the university or public sector to partner with firms in
knowledge generation activities. Analysts of cluster development explain Portland’s
“exceptionalism” through the historic presence of two strong anchor firms: Tektronix and Intel
(Cortright and Mayer, 2000: 2).
In their research intensity, these two firms have acted as surrogate universities, training and
attracting specialized engineering talent, many of whom moved on to establish their own
enterprises in the Silicon Forest. Indeed, when Tektronix underwent a massive downsizing in the
1980s, private and public actors in Portland moved to diversify the technology base. As part of
its obligations under the urban growth boundary infill development plan, the metro government
has sponsored a Creative Services Initiative in downtown Portland. The cornerstone is a
$6 million renovation of empty warehouses into open concept wired offices. The buildings are
adjacent to a thriving local arts community, and film and recording companies. The aim is to
build synergies in a concentrated and “funky” downtown district that combine multi-media
entrepreneurs with local creators of cultural content (Horrigan, 2001: 14-15).
Interestingly, in late 2002, Portland’s metro government appointed a Metropolitan Economic
Policy Task Force, reflecting a growing concern that the region’s planning process was not
sufficiently informed by a vision of the economic future (Cortright, 2002). The task force is
based at Portland State University’s Institute for Portland Metropolitan Studies. While the
Portland city region is without a strong university research capacity in high technology science,
the Institute for Portland Metropolitan Studies contributes other forms of social knowledge for
the community. It produces a continuous stream of policy-relevant research on the region’s
economic, social, and environmental development, and it has frequently been called upon by city
officials to convene a “neutral space” for multi-stakeholder dialogue and inter-sectoral learning.
Indeed, the Metropolitan Economic Policy Task Force began its work by noting that Portland
lacks the kind of institutionalized public-private partnership mechanisms that exist in cities like
Pittsburgh for monitoring the regional economy and providing the organizational basis for
developing strategy. As such, the task force is expected to provide advice on the formation of
such a body and, equally, to provide a policy framework linking economic development
objectives to the region’s institutionalized commitment to growth management and integration of
transportation and environmental goals in land use planning.
Role of Government
In Portland, governance has proceeded through consensus building at the metropolitan scale
framed by regulations emanating from both state and federal governments. For example, federal
legislation in transportation planning was a catalyst for the long-term visioning and planning
process launched by the metro government in the 1990s. It was state legislation that enacted the
60 June 2003 Canadian Policy Research Networks
urban growth boundary in the first place, setting in motion the city region’s ongoing search for
balanced and compact development.
This same state regulatory influence has been evident in moving local governments to
incorporate social and community priorities in their planning (Provo, 2002). Beginning in the
1980s, the state of Oregon authorized regional development boards to dispense lottery funds for
local development projects. In the late 1990s, the boards were mandated to end their near total
preoccupation with high technology related development projects to support, as well,
disadvantaged groups such as racial minorities or nonprofit organizations involved in education,
job training and community-capacity building. As one observer concluded, the new emphasis
was on the connection between “people, places, and clusters”(Provo, 2002: 64). As such, it
seems that Portland’s widely heralded local innovations continue to be the result of a dynamic
interplay among governance levels, from the neighbourhood to the regional and beyond.
2.4 Conclusion
This part of the Discussion Paper has ranged widely across 11 different local experiments in
innovation. It probed a series of common issues across all the cases. The following tables draw
together the individual analyses, highlighting key similarities and differences in processes and
outcomes among the cities and regions. This summary discussion of cross-cutting themes
continues in the final section of the paper.
Cities and Communities that Work: Innovative Practices, Enabling Policies 61
Table 13.
Revitalizing Rural and Remote Communities
City/Region Key Project Key Players Success
Indicators Success Factors/
Barriers to Success/
Future Challenges
Kelowna Growing the
Growth of
firms and
services in
fruit and wine
Strong local
champions, overall
quality of life,
developing high
Sustaining presence in
globally competitive wine
and fruit clusters, building
local science and
technology capacity,
venture capital supply
Meadville Regenerating
and “wiring”
and state
in revitalized
Strong local
coalition, state-
wide recognition
Overcoming local
resistance to new
technologies among small
businesses and
agricultural producers,
finding anchor firms for
regenerated industrial
Jutland Adapting
cations cluster
national and
foreign capital
in local
cluster, viable
niche for local
cluster in
Strong local
focused technical
investments by
government and
European Union
Making the transition to a
new generation of
technology, extending
opportunity to workers and
firms in traditional or
declining sectors beyond
the knowledge-intensive
Beauce Participating in
large urban
centre outside
the locale
federal and
Small- and
active in
local production
system, recent
federal and
provincial supports
for linking to
Developing and retaining
knowledge workers,
strategic coordination of
many upper level
government economic
development interventions
in the locale
62 June 2003 Canadian Policy Research Networks
Table 14.
Renewing Industrial Cities
City/Region Key Project Key Players Success
Indicators Success Factors/
Barriers to Success/
Future Challenges
Bilbao Building cultural
cluster Local public-
private urban
Recognition on
global cultural
attraction of
tourists and
trade shows,
of derelict inner
city and
Bold vision of an
economic future,
landing “world
class” museum
franchise, focused
leadership by
Developing a more
integrated approach to
urban development that
recognizes and values
local and indigenous
cultural expressions,
managing the
regeneration of inner
city lands to include
local neighbourhood
interests alongside
global cultural
Halifax Economic
strategy for
City region
and federal
Region wide
unity of
purpose in
integration of
cluster growth
with community
needs across
following municipal
amalgamation on
the need to act
more strategically
as an economic
region, emergence
of a dynamic
partnership body
to lead business
across the region
and on a global
Overcoming destructive
legacy of zero-sum
investment competition,
further integration of
economic and social/
development agendas
presently housed in
separate development
Dublin Renewing
national and
Reduction of
of indigenous
high technology
Effective transfer
of national-level
success to local
government and
European Union
support for local
partnership, robust
mechanisms for
inter-local learning
and policy transfer
Stronger representation
or participation of
business in local social
partnerships, further
efforts to embed foreign
capital in local
economic development
and technology
networks, effective
coordination of complex
infrastructure to avoid
duplication or confusion
Pittsburgh Diversifying
steel economy Local civic
of steel
economy to
Forward looking
local business
elites, robust
Combating spatially
concentrated poverty in
the city and
surrounding region,
including minority
interests more fully in
civic alliances, more
coherent local
government presence
and upper level public
Cities and Communities that Work: Innovative Practices, Enabling Policies 63
Table 15.
Building Knowledge-Intensive Regions
City/Region Key Project Key Players Success
Indicators Success Factors/
Barriers to Success/
Future Challenges
Waterloo Inter-
for high
and anti-
and business
Investments in
inclusive local
Forward looking
officers seeking
development of
capacity, local
engineering and
Cooperation among
municipal politicians in
technology investments
and economic
governance, greater
knowledge transfer
between universities and
small businesses,
enhanced networking
across the region’s social
and economic networks
Saskatoon Agri-science
clusters and
housing and
science park,
local business
clusters in
labour and
commitment to
economic and
benefits of local
agricultural base,
dynamic local
networking with
diverse social
constituencies on
civic projects
Maintaining world-class
cluster facilities in science
park, supporting new agri-
food industries such as
nutraceuticals, tapping
the full potential of the
city’s Aboriginal youth
Portland Socially
anchor firms
urban growth,
Bold state
legislation for
urban growth
boundaries, “smart
growth” regional
planning, world
scale anchor firms
for technology
Potential over-reliance on
two firms for regional
technological base,
relative absence of robust
public-private partnership
bodies, more attention to
economic development in
regional planning
64 June 2003 Canadian Policy Research Networks
Part 3. Community-Based Innovation: Lessons and Implications
This Discussion Paper has surveyed processes of community-based innovation in 11 cities in
Canada, Europe, and the United States. Our departure point was that contemporary processes of
globalization have made local places more, not less, important to innovation – in the broad sense
used here and set out in Part 1. Many of today’s most pressing challenges and opportunities are
concentrated in urban spaces. Not surprisingly, Canadian cities are “back on the policy agenda”
(Andrew, Graham, Phillips, 2003). Equally evident, however, is the need for communities,
whether large or small, to organize themselves to take maximum advantage of the new global
dynamics. The case studies in the Discussion Paper highlight the diversity of such local
innovations and, indeed, the different ways to build community capacity to make positive
By way of conclusion, we can now step back from the details of individual cases to catalogue some
overarching themes and policy-relevant lessons, which are organized below into four categories.
First, we draw attention to the basic commonalties or shared characteristics among all of the
innovating places. Second, within the common pattern we identify certain points of difference
across the cases, highlighting variation both in local dynamics and the national frameworks
structuring community-based innovation. Third, in relation to the general achievements flowing
from the local partnerships, we summarize the building blocks that have been put in place to enable
success. Finally, we draw together learnings for policy actors at all levels of government who are
interested in developing or participating in community-based strategies for sustainable innovation.
3.1 Common Patterns
Perhaps the most basic point of convergence among the communities examined is the effort to
“build from within.” That is, in each of these places, local actors are searching for, and
experimenting with, holistic development models that aim to grow local assets – ranging from
business clusters and workforce skills, to inclusive neighbourhoods with well-preserved built and
natural environments. In all cases, the broad dynamic of innovation was the same, combining
bottom-up strategies with top-down support from higher levels of government. Further, the
mechanism or vehicle for planning and implementing change took a similar form – that is,
public-private partnerships that supplied an infrastructure for collaboration, learning, and
investment. In turn, such partnerships were, more often than not, anchored institutionally in
dedicated agencies or bodies with the visibility and legitimacy to coordinate input from the
public, private and voluntary sectors.
In these terms, it can be said that all of the case studies revealed “development coalitions” trying
to reposition their communities to meet the complex challenges of the global age (Keating,
2002). Rather than simply attempting to lure external private investors or government subsidies,
local actors were creative and resourceful. Their mobilizations introduced new voices and input
into the policy process and, in so doing, helped ensure a better fit between upper level
interventions and local circumstances. At the same time, these local mobilizations frequently
piloted strategies that were transferable to other localized areas by higher levels of government.
In this sense, the community-based processes enabled upper level governments to tackle what
Cities and Communities that Work: Innovative Practices, Enabling Policies 65
were described in Part 1 of the Discussion Paper as today’s increasingly “wicked” policy
problems such as social exclusion, productivity decline, and environmental degradation.
Of course, the specific achievements of the community-based processes varied in accordance with
local priorities and conditions. Yet, taken as a whole, it is fair to conclude that progress was
observed on a number of fronts: restructuring traditional industrial or agricultural economies by
leveraging access to new knowledge networks, helping historically vibrant business clusters avoid
becoming locked into outdated practices or ideas, linking environmental concerns to brownfield
conversions and industrial regeneration, and mobilizing region-wide public and private resources
to tackle problems of poverty and social exclusion in disadvantaged neighbourhoods. In each of
these fields, policy design was more integrated in the sense of breaking through departmental silos,
and policy delivery more tied to the needs of users in the places where they lived.
The cases also pointed to another positive dynamic of the community-based approach. The very
process of convening multi-sectoral networks at the local level, where different players have an
opportunity to learn from one another, generated its own synergies and momentum. Simply put,
there were a number of instances of positive spin-offs: success in solving one problem fed into
progress on another. In some cases, like Pittsburgh or North Jutland, the synergies were evident
over time as effective mobilization in one era set the stage for progress in subsequent rounds. In
other cases, the synergies were more immediate, as the same actors made “real time” connections
across projects, for example, in Meadville between broadband, brownfields, and the environment;
or in Saskatoon between high technology business networks and Aboriginal training and
employment. As the recent OECD study of Glasgow’s urban renaissance concluded: “The criteria
of success are increasingly reflected in the multi-sectoral and dynamic strategies based on a vision
of the kind of territory that people want for the future, a vision which is focused on realising
sustainable development and encouraging local endogenous development” (OECD, 2002a: 22).
3.2 Variations on the Theme
Alongside these common features and general achievements, the 11 cases also displayed some
notable variation. Most significant are differences across the national or continental settings.
In the European cases, the active presence of the European Union had an impact on the processes in
four significant ways. First and most obviously, EU funding was instrumental in many cases for both
the launch of the local collaboration and its subsequent operation, even expansion. Second, the EU
conditioned the design of the community initiatives as its programs typically required broadly-based
multi-sectoral representation of local interests. Third, the EU was influential at the levels of policy
ideas in that it emphasized the interdependence of economic competitiveness and social inclusion, a
thrust evident, for example, in efforts to better embed the North Jutland cluster in the larger regional
economy. A similar logic was evident in Bilbao where EU projects drew attention to the linkages
among business clusters, labour force development, and land use planning in distressed parts of
cities. Fourth, provision of EU support for local initiatives encouraged national governments to
participate as full partners in the area-based innovation strategies, often producing quite formal and
robust institutional structures linking the various scales of action, as in Dublin.
66 June 2003 Canadian Policy Research Networks
Obviously, this supra-national dynamic is absent in North America. In the United States, the
collaborations and partnerships were more locally defined and circumscribed. With the partial
exception of the Portland experience, where an unusually active American state government
structured local dynamics, the pattern in Pittsburgh and, to a large extent, in Meadville was one
of civic alliances carrying the process in the absence of coherent or sustained engagement from
government, either local or extra-local. In Meadville, state officials were more active in
recognizing local successes after the fact, than in participating or initiating.
The Canadian cases sit somewhere between the European and American “models.” Federal and
provincial governments have been more engaged than their American counterparts in all the
cities and communities through a number of financial and regulatory instruments. Indeed, in
places like Kitchener-Waterloo, Saskatoon, and Halifax, upper level interventions have been
judged critical to local success. At the same time, this policy support in comparison to the
European experience lacks the focus and funding to really make a difference. As one recent
comparative study concluded, Canada continues to operate with a “disjointed approach” to
community-based innovation (OECD, 2002a: 159). The Canadian cases reviewed in this
discussion are consistent with this assessment. For the most part, federal and provincial
governments, unlike European Union officials, have not fully appreciated the interdependence of
economic and social investments in building strong communities.
3.3 Putting in Place the Building Blocks
Clearly, each of the national systems creates its own context for local initiatives. Community-
based innovation is enabled or constrained, and channeled down particular paths, in relation to
policies and institutions at higher levels of government.
Despite the cross-national variation in structures and processes, it is also apparent that all the
case studies reveal communities achieving some degree of success in what has been called
sustainable innovation. Each of the cities and regions, in its own way and at its own pace, was
exhibiting qualities of learning communities. That is, they all have been putting in place various
combinations of the seven key building blocks we identified in Part 1 of the Discussion Paper as
the foundation for successful community-based innovation.
To begin, leadership was important everywhere. Variously termed local champions, civic
entrepreneurs, or strategic brokers, these individuals or alliances forged networks in cities and
regions. Such leaders possessed the “community intelligence” to be able to recruit the “right
people” to projects, and further to recognize those critical issues and pivotal moments when
significant progress could be made in coalescing the stakeholders. In the European context,
these champions tended to emerge through the public sector, in the United States they came
mostly from the private sector, especially business but also voluntary and philanthropic
organizations, and in Canada there was more of an inter-sectoral mix. Regardless of their
particular lineage, local champions developed visions of the future that reframed problems so
that formerly disparate interests found sufficient common ground to collaborate. The visions
were grounded in existing local conditions, such that proposed departures were credible to a host
Cities and Communities that Work: Innovative Practices, Enabling Policies 67
of stakeholders. Action plans thus reflected a realistic assessment of community strengths and
weaknesses based on high quality data.
In turn, the local vision, leaders, and relationships were supported from above through effective
institutional intermediaries which connected the different levels of activity, and helped local
champions access extra-local contexts where decisions about vital resources were taken. Upper
level policy makers then made their contributions through various combinations of direct
participation, wherein departmental representatives joined local collaborations, and indirect
facilitation where federal, provincial, or state policy enabled local project implementation.
These processes helped the community partnerships secure the necessary financial and technical
support to actually implement projects. However, they also raised important, and largely
unresolved, questions among our cases about how best to ensure accountability for monies spent
through community partnerships and how best to maintain the legitimacy of process in terms of
the diversity of interests represented. Dublin, with its multi-layered and inclusive structure, was
perhaps furthest along in addressing these issues.
Indeed, matters of partnership accountability and legitimacy are key concerns requiring more
thought as the new paradigm of community-based innovation gathers momentum. The next
section closes the analysis with some reflections on future challenges.
3.4 Lessons for Moving Ahead
This Discussion Paper has surveyed innovative processes in a number of cities and communities.
Jumping-off from the widely held view that the quality of local places is increasingly important
to citizen well-being and national prosperity, even in a wireless, global age, our basic purpose
was twofold. We aimed to report, in systematic fashion, existing research on how different types
of local places are forging partnerships and constructing institutions through which to innovate.
As well, we wanted to draw policy-relevant lessons from this survey to inform, and perhaps
inspire, subsequent efforts to support community-based innovation processes.
What policy lessons emerge from the case studies? Clearly, there are many issues on the table
that influence the course of community-based innovation. To focus policy thinking and action, it
is possible to reduce the complexity by summarizing three broad categories of policy-relevant
First, local capacity building remains a fundamental policy priority. Helping communities,
inevitably comprised of diverse interests and identities, equip themselves for innovation entails
commitment along a number of lines. Investments of money and time must be made in what
Rosabeth Moss Kanter terms the infrastructure for collaboration”: civic leadership in relationship
building, and professionalism in network management (Moss Kanter,1995: 363). Indeed, all the
emphasis on the importance of face-to-face interaction and personalized networks in the social
learning model reminds us that partnerships actually “happen” at meetings in buildings at specific
times. The seemingly mundane cannot be overlooked. Space must be arranged, members
recruited, accounts managed, teams built and strategic brokers trained. Further, special attention
needs to be paid to the representational needs of less well-resourced groups in the community if
68 June 2003 Canadian Policy Research Networks
innovation processes are to retain their legitimacy and, indeed, if their projects are to make the
required connections across the economic, social, and environmental aspects of problems.
Additionally, there are two overarching issues of territorial equity that must be addressed in
local capacity building. Within metropolitan spaces, account must be taken of the fact that some
districts or neighbourhoods are much better equipped than others to grow robust partnerships. At
the same time, the same systemic differences in local resources and collaborative skills that exist
between cities must be addressed. In both instances, the pivotal role of upper level governments
in local capacity building is underscored.
Second, financing and accountability are key intertwined policy priorities. There remains the
fundamental imbalance in the resources and responsibilities assigned to municipalities, key
actors in convening and organizing partnership processes. Any benefits from the community-
based approach to innovation are unlikely to materialize when cities find themselves struggling
just to meet their traditional responsibilities in areas of infrastructure and property servicing. In
these conditions, it is unreasonable to expect local officials to lead, or even participate fully, in
innovation projects.
Comparative research shows that this problem is more pronounced in Canada than in Europe or
the United States, where municipalities either receive stronger fiscal transfers or have access to
more flexible revenue sources (Federation of Canadian Municipalities, 2001b). From this
perspective, local capacity building for innovation needs to include appropriate resourcing of
municipal governments.
Linked directly to issues of local financing is accountability for monies transferred to
community-based partnerships. On the one hand, the balance must be maintained between local
responsiveness and autonomy, and sound reporting protocols for public funds transferred from
above. On the other hand, representative partners working in collaborative programs and
projects must maintain relationships with their own constituencies in the community. There are
no “off the shelf” solutions to resolve or even manage these tensions. For now, the priority
remains careful tracking of resources, rigorous evaluation of policy outcomes, and the widest
possible sharing of knowledge about what works best. A number of the communities reviewed
in our sample, for example Bilbao’s brownfield conversions and Kitchener-Waterloo’s anti-
poverty project, developed their own strong benchmarking frameworks as part of the social
learning process.
Third, challenges of coordination and cooperation must be tackled. Introducing devolved,
networked governance requires appropriate mechanisms for handling interactions among levels
of government, and between governments and other partners within the local area. For upper
level authorities a central issue remains finding ways to practice “joined up government,”
crossing departmental and jurisdictional boundaries. Such holistic approaches not only reduce
the possibility of wasteful duplication of effort and diffusion of scarce resources, but they
increase the likelihood that interventions will be effective over the long-term in solving
problems. But these desirable horizontal and vertical policy orientations frame complex
challenges to traditional bureaucratic incentive systems and reporting relationships. The
difficulty of the adaptations cannot be glossed over. They must be worked through.
Cities and Communities that Work: Innovative Practices, Enabling Policies 69
It is at the local level, of course, that cooperation must be secured among different interests and
sectors. This involves sophisticated forms of strategic brokerage that facilitates repeated, face-
to-face interaction and nurtures a civic culture of creativity distinguished by its openness to new
ideas and, indeed, to newcomers. When successful, formerly disparate interests learn from one
another about where and how collaboration can be mutually beneficial. As was demonstrated in
the Dublin and Pittsburgh cases, the prospects for constructive cooperation are improved
considerably when robust institutional intermediaries exist to bring the disparate parties together
and keep them engaged. In Meadville, Kelowna, and Portland, creative application of
information and communications technologies further enabled the community building process
and enhanced networking capacities. Yet, as was evident in places like Halifax and Kitchener-
Waterloo, it remains a challenge to find ways to join the typically separate networks working on
economic challenges (for example, high technology clusters) or social challenges (for example,
anti-poverty inclusion).
The final critical dimension of coordination and cooperation for community-based innovation
concerns vertical trust relations. Mutual respect and understanding is equally important up and
down the governance levels. In many ways, this relationship is most fundamental since local
capacities and effective accountability depend ultimately on productive interaction between
governments with different, but equally vital, resources to leverage community-based
3.5 Conclusion
In closing, this Discussion Paper has shown that the structures and processes that drive
community-based innovation remain works in progress. It has catalogued some successes,
highlighted opportunities for further progress, and identified key public policy lessons.
Substantive challenges and tensions remain: balancing local autonomy with national standards;
integrating the economic, social, and ecological dimensions of sustainable development; and
recognizing that meaningful collaborations are risky and take time. They call for a kind of
patience and persistence that is not always available in policy communities, much less in the
political universe.
It is also clear that the tensions will not be resolved in the abstract, or even through talk, however
inclusive the conversation. Rather, they require action: experimentation, monitoring, and
learning. Fortunately, Canadian policy communities are now well positioned for just such
action. On the one hand, there is much to be learned from European and American experiences,
where local innovations have been pursued more systematically and for a longer period of time.
On the other hand, these lessons, appropriately contextualized, can inform recently launched
Canadian collaborations. The three levels of government and their social partners are currently
collaborating in cities and regions across the country on various initiatives, ranging from urban
development agreements to municipal green funds and social housing strategies (OECD, 2002b).
These are promising breakthroughs, worthy of careful study and further policy support.
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