Beyond Crisis-Promoting Northern Business Linkages March 9, 2009

1. Beyond Crisis-Promoting Northern Business LinkagesMarch 9, 2009 Pilot Cluster Development in the Northern Regions under the Canada-Russia Northern Development Partnership Program: Lessons Learned and Outcomes

2. Outline • Canada Russia Northern Development Partnership Program • Background • Goals and Major Outcome • Pilot Cluster Development Project • Background • Goals and Major Outcome • Definition and Examples of Clusters • Key Lessons Shared Through the Pilot Cluster Development Project • Partnership Opportunities Between Ontario and Russia • Benefits • Next Steps

3. Canada-Russia Northern Development Partnership Program: Background • Canada-Russia Northern Development Partnership (NORDEP) program is a four year initiative (2006-2010) jointly funded by the Canadian International Development Agency and Russian Partners • Canadian initiative partners are CIDA and the Association of Universities and Colleges of Canada (AUCC), plus partners like MNDMF for each project • The Five Russian Partners are: • All-Russian National Public Organization on the Development of Small and Medium Sized Businesses • Ministry of Economic Development & Trade of the Russian Federation • Council of the Federation—Committee on Northern Territories & Indigenous Minorities • Russian Association for Indigenous People of the North • Regional Administration of 11 Targeted Regions

4. NORDEP: Objectives and Major Outcome Objectives: • Build the capacity Russian partners and participants to promote effective governance and sustainable economic development in the North and Far East • Establish new and strengthen existing governance and economic development partnerships between Canada and Russia Expected Outcome: Create sustainable partnerships that will last beyond the mandate and time frame of NORDEP

5. Pilot Cluster Development Project: Background • One of 36 independent NORDEP projects • Ministry was awarded the contract for the Pilot Cluster Project through a competitive bid process • Russian partners were the All-Russian Non-governmental Organization of Small and Medium Business (OPORA) and seven Targeted Northern Region of the Russian Federation • As the Canadian partner, the Ministry provided information and expert advice on regional economic development, research and development, cluster development, and trade programs • Project consisted of visits by two delegations: • May 2009: Three member Canadian delegation that visited Russia participated in a Clusters and Competitiveness Seminar and the Northern Partnership Conference • October-November 2009: 14 member Russian delegation that visited Ontario took part in presentations, site visits, meetings, and a round table discussion

6. Pilot Cluster Development Project: Goal and Major Outcome Goal: To support the development of regional industrial clusters in the Targeted Northern Regions through the transfer, adaptation, and study of the Canadian experience with clusters. Expected Outcome: To strengthen the capacity of the Targeted Northern Regions to undertake sustainable cluster development

7. Definition and Examples of Clusters Cluster (noun) a group of inter-related industries and institutions that drive wealth creation, primarily through innovation and the export of goods and services. Clustered industries mutually reinforce and enhance each other’s competitive advantage. • What is the cluster approach: • Brings together multiple constituents that normally that normally would not talk to one another into constructive dialogue, i.e. Business, government, labour, and industry associations • An integrated, comprehensive approach to sustainable economic development that breaks down silos • Examples of clusters include: • Houston’s Oil and Gas Cluster • India’s Diamond Cutting and Polishing Cluster • Swedish Forestry Industry Cluster • Canada’s Telecommunications Cluster • Niagara’s Wine Cluster

8. Key Lessons Shared Through the Pilot Cluster Development Project • The competitiveness polices and programs of the Federal, Provincial, and Municipal governments impact one another. • Federal, Provincial, and local governments have distinct, but interrelated roles to play in the support of science, research and development, commercialization, and innovation. • Ability to support successful innovation is a key determinant of gains in productivity and prosperity in the knowledge-based global economy. • Regional economic development programs must be tailored to meet the unique needs of the communities and industries that they are intended to benefit. • The National Research Council’s experience with clusters indicates that mobilizing stakeholders to participate in cluster development is easier in small communities. • The example of the Ontario Mineral Industry Council suggests that natural resources can support sustainable economic development in northern regions

9. Key Lessons Shared Through the Pilot Cluster Development Project (Cont’d) • Small and medium enterprises play critical roles in innovation, job creation, economic growth, and the creation of prosperity. • It is important to create organizations dedicated to the delivery of the programs and services that drive innovation and commercialization, such as the creation of the Ministry of Research and Innovation in Ontario • Sector Councils serve as platforms for bringing sector stakeholders together to express their opinions and positions to government and for government to receive the opinions and positions of stakeholders. • Clusters develop because government both applies pressure to industries and provides support to industries. • Small communities can attract creative people and create economic growth by promoting tourism and aesthetics like small size, environmental quality, outdoor recreation, and cultural and community events.

10. Key Lessons Shared Through the Pilot Cluster Development Project(Cont’d) • Small First Nations can use cutting edge technology to make the transition from diesel electricity to renewable forms of electricity • Natural resource-based clusters typically go through four distinct phases. Each phase appropriate policy interventions and supports. • Government support, such as attractive tax incentives, the provision of geological data, and the security of tenure, are critical to the development of the mineral sector. • Economic development programs are successful because they bear tangible results • Partnerships, networks, and relationships are critical to success because they facilitate cooperation, collaboration, and innovation in the global economy.

11. Partnership Opportunities Between Ontario and Russia • Partnership between the All-Russian Non-governmental Organization of Small and Medium Business (OPORA) and Research In Motion • Transfer of knowledge, expertise and technologies related to modern manufacturing in natural resource-based sectors (i.e. forestry) and emerging sectors (i.e. nanotechnology) • Exchange programs for students, academics and researchers, and government officials • Internship programs and mentoring opportunities for business people and entrepreneurs • Potential to identify a Russian Region that will take the lead in organizing a Minister led Ontario mining delegation to Russian Regions with rich mineral endowments

12. Partnership Opportunities Between Ontario and Russia (Cont’d) • Partnerships relating to environmental research and rehabilitation between the Mining Innovation, Rehabilitation and Applied Research Corporation and Moscow State University • Partnership between Bauman Innovation and the Institute for Competitiveness and Prosperity • Information exchange between the Prospectors and Developers Association of Canada and OPORA on e3 Plus: A Corporate Social Responsibility Framework • Collaboration with Queen’s University on mining health and safety. • The National Research Council and OPORA collaborate on cluster development • Provide information on ‘Smart Regulations’ to the Innovation Forum that will be held in Moscow in March 2010 • The Ontario Centres of Excellence and the Russian Corporation of Nanotechnologies

13. Benefits • Learning about the Ontarian and Canadian policies, programs, experiences, and best practices relating to cluster development increased the capacity of the Targeted Russian Regions to undertake cluster development • Canadian partners substantially increased their understanding of Russian culture, government policies and programs, and the needs and desires of Russia’s Northern Regions • Potential for longer-term sustainable business-to-business, institution-to-institution, and government-to-government relationships between Ontario, Russia and its regions • Participants developed personal and professional connections that can be used to establish long-term partnerships.

14. Next Steps • Develop work plans that will support the ongoing development of partnerships between Ontario and Russia • Provide information in areas in which additional information has been requested (i.e. Northern Ontario Heritage Fund Corporation, Industrial Research Assistance Program); then • Potential to identify a Russian Region to take the lead in organizing a Minister led Ontario mining delegation to Russian Regions with rich mineral endowments to further develop relationships

15. Thank You Indira Singh, Director, Executive Projects Office Ontario Ministry of Northern Development, Mines and Forestry Executive Director, Ontario Mineral Industry Cluster Council Thunder Bay, ON Indira.Singh1@ontario.ca