Building Human Infrastructure for the Digital Economy:
Ryerson’s Digital Media Zone
Wendy Cukier, Valerie Fox, Hossein Rahnama
To cite this version:
Wendy Cukier, Valerie Fox, Hossein Rahnama. Building Human Infrastructure for the Digital Economy: Ryerson’s Digital Media Zone. 10th International Conference on Human Choice and Computers (HCC), Sep 2012, Amsterdam, Netherlands. pp.156-169, �10.1007/978-3-642-33332-3_15�. �hal01525117�
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Building Human Infrastructure for the Digital Economy:
Ryerson’s Digital Media Zone
Wendy Cukier, Valerie Fox and Hossein Rahnama
Ryerson University, Toronto, Canada
wcukier@ryerson.ca,vfox@ryerson.ca,hossein@ryerson.ca,
Abstract. Drawing upon the policy literature and empirical work, this paper
proposes an ecological model in which entrepreneurial skills are a critical part
of the human infrastructure needed to fuel national Digital Economy and Innovation strategies. While many countries around the world reference the importance of building a “culture of innovation” and some countries, such as Israel, are seen as having this deeply embedded, there are few definitions and fewer
empirical studies assessing this. We suggest that the prevalence of individuals
with entrepreneurial mindsets and a willingness to take risks will drive economic growth and development but that developing this is easier said than done, as
complex factors shape values and aspirations. While University-based incubators have long been seen as important parts of the innovation ecosystem, we
provide a case study of a unique incubator, Ryerson University’s Digital Media
Zone (Toronto, Canada), and suggest that it not only offers short term outcomes
but also offers a model that is critical to fostering a culture of innovation. We
conclude that more needs to be done in Canada to promote this culture of innovation and that it needs to begin long before students reach university.
Keywords: digital economy, digital skills, Canada, ecological model, entrepreneurs, innovation, innovators, incubators
1
Digital Skills and the Culture of Innovation
Recent reports [36] lament Canada’s lagging global performance on innovation and
recommend a variety of interventions at the policy or macro level. At the same time,
the evidence is clear that the challenges are complex, also demanding attention at
sectoral, firm, and individual levels and their inter-relationships. For example, the
availability of venture capital [35], the social acceptance of entrepreneurs, and formalinformal networks all influence the development of entrepreneurial culture [4]. Comparisons of countries have focused on differences in tax policies, investments in research and development (R&D), and regulations [61]. Less attention has been paid to
cultural differences [24]. The characteristics of individual entrepreneurs have been the
subject of much research [71], [28], [29], [53], [85]. However, less research exists on
the effectiveness of specific interventions aimed at developing entrepreneurs and entrepreneurial culture. While globally there are broad discussions of the need to
strengthen the “culture of innovation” [22], [27], [39], [49], [50], [51], [70], this is not
well defined, nor has there been much attention to how it will be fostered.
Canada’s Digital Skills Strategy stresses the importance of a technological infrastructure, the need to strengthen ICT markets, the need to promote applications, and
the importance of developing the human infrastructure. However, critical digital skills
tend to be defined as basic digital literacy (to enable access and use of the internet for
example) or on Science, Technology, Engineering and Mathematics (STEM) disciplines. Less attention has been paid to the importance of fostering entrepreneurial
skills in order to grow digital companies [15].
Previous research [3], [19] [31], [67] has also explored social networks that constitute innovation ecosystems and the geographical clustering of technology company
entrepreneurs in innovation hubs. Universities often play a critical role in these ecosystems and university-based technology transfer centres and incubators have been
successful in effectively mobilizing research knowledge [52]. Stanford University in
Silicon Valley and MIT in Cambridge, Massachusetts are key players in well-known
hot spots for digital innovation and fostered many wildly successful high-tech companies [10]. University-based and other incubators have a long history in many nations
in promoting local economic development and the creation of new businesses. Canada, for example, is home to more than 200 distinct technology incubators and accelerators, including at least ten specifically focused on digital media. In some countries,
national networks of small business incubators are an explicit part of national innovation strategies [65]. Yet there are still numerous unanswered gaps in understanding
the process of startup success and the role that incubators may play [59].
Our paper suggests that:
1. Entrepreneurial Skills and Entrepreneurship must be a critical part of national Digital Economy and Innovation strategies;
2. The prevalence of individuals with entrepreneurial mindsets and a willingness to
take risks will drive economic growth and development, and are a critical aspect of
a “Culture of Innovation”;
3. University-based incubators can not only offer short term outcomes such as the
creation of technologies, companies and jobs, but are also a critical element in developing the skills and mindset needed to foster a culture of innovation.
We will first review the relevant research on entrepreneurs and entrepreneurship,
entrepreneurial culture, building entrepreneurial skills and the role of incubators. We
will then describe the Canadian context broadly and provide a case study of a Canadian digital media incubator at Ryerson University in Toronto, Ontario.
2
Entrepreneurs and Entrepreneurship
The ‘entrepreneurial mindset’ includes the ability to sense, act, and mobilize under
certain circumstances – characteristic of entrepreneurs and entrepreneurial behaviour
[32]. But the question of how this is defined and measured and, more importantly,
where it comes from, is the subject of much debate.
There have also been efforts to define entrepreneurship and identify the characteristics of entrepreneurs through profiles [9], [81] or psychographic testing and surveys
[8], [40], [73], [90]. Some scholars have focused on refining the measures and instruments used to assess entrepreneurial traits such as self-efficacy [55]. Various instruments purport to measure key entrepreneurial characteristics such as the need for
achievement, a locus of control, and creative tendencies [13], [16], [63]. Nonpsychological variables such as education, family, and life experience influence the
tendency to behave entrepreneurially [17]. Donaldson [18] suggests that the single
most important factor is an individual’s belief that starting a business is a suitable
course for them and this, in turn, is affected by many factors.
The prevalence of individuals with entrepreneurial mindsets and a willingness to
take risks will drive economic growth and development [18], [88]. Entrepreneurial
culture is defined as a set of “values, beliefs and attitudes commonly shared in a society which underpin the notion of an entrepreneurial ‘way of life’ as being desirable
and in turn support the pursuit of ‘effective’ entrepreneurial behavior by individuals
or groups” [25]. Social norms reflect the interplay of many variables including historical context, institutions [43], and political and economic systems [42], [47], which
have a significant impact on the decisions to pursue entrepreneurial activities [30],
[62]. Similarly, national culture, as reflected in institutions, laws, and policies, may
also influence the propensity towards entrepreneurship [38], [41], [46], [66], [72].
Some studies attempt to measure the national culture of innovation [33] and entrepreneurship based on aggregate measures such as creation of new enterprises on a per
capita basis or by national productivity [12], [37]. The Global Entrepreneurship Monitor (GEM) assesses country entrepreneurial attitudes and general societal attitudes
towards entrepreneurship. Other studies consider the relationship between national
culture and the characteristics of individual entrepreneurs, attempting to assess the
values, beliefs, motivations, and cognitions of entrepreneurs across cultures [44], [87].
Building on Hofstede’s [34] cultural indices, some scholars have attempted to link
national culture with individual entrepreneurial characteristics. For example, Licht
and Siegal [44] suggested that cultures that were ranked as more individualistic had a
higher likelihood of an internal locus of control orientation, one characteristic often
associated with an entrepreneurial orientation. This is also more likely in low uncertainty avoidance cultures. Rates of innovation are most closely associated with the
cultural value of uncertainty acceptance, but a lack of power distance and individualism also are related to high rates of innovation. This research suggests that nations
may differ in their rates of innovation because cultural and religious values [6], [11],
[23], [56], [82].
There have also been a number of studies to assess whether or not, in addition to
building knowledge and skills, entrepreneurial intentions are affected by education
[83]. The findings make logical sense when one considers the relationship between
knowledge, skill and self-efficacy, which are important traits of entrepreneurs. Although research has been specifically directed at developing entrepreneurial skills for
engineers, scientists, and physicians [20], the impact of entrepreneurial training and
education programs in promoting innovation is inconclusive [23], [78], [85].
3
Incubators
Specialized services and infrastructures (e.g., incubators, research centers, business
parks, and technology transfer offices) can promote entrepreneurship and foster the
commercialization of research and new ideas to stimulate scientific entrepreneurship
[2], [14], [75], [77]. A business incubator is an organization designed to accelerate the
growth and success of new entrepreneurial companies by nurturing them at their inception. Globally, there are high profile university-based incubators. For example,
MIT in Cambridge, Massachusetts; Imperial College, London; University of Houston,
Twente University; University of Monterrey and many others [5], [21]. Case studies
which have documented the impact of individual incubators at universities including
the University of Central Florida [69], the United States Market Access Center
(USMAC) at San Jose State University [57], Northwestern and the University of
North Carolina [58], in Sweden [68] and France [54], an Irish Dublin-based university
campus incubator [1] as well as two in Canada [54].
Scholars have examined the evolution of incubators and research parks in the
commercialization of research at universities [26], [58]. Many focus on their role in
commercializing technology, nurturing firms and new products. However, incubators
can also support broader objectives related to developing innovation ecosystems [60].
Among the benefits to client firms are access to student and faculty talent. Discussions of “entrepreneurial universities” in developing skills and attitudes have also
emphasized their role in fostering technology entrepreneurs.
While the definitions of success vary, several studies have attempted to address
performance issues [45], [74]. There are different ways to approach the question of
effectiveness, the goal of the approach, the system resource approach, the stakeholder
approach, and the internal processes approach [58]. The proposed University Technology Business Intelligence model included performance outcomes (program sustainability and growth, tenant survival and growth, contributions to the university
mission, and community impacts). Management policies and their effectiveness particularly the effective use of resources (e.g. governance, finance and capitalization,
operational policies, and target markets), services and their value added with a focus
on the perceived value of the services provided (e.g. space, business assistance, human resources, and consulting) have also been studied. Sun et al. propose a framework of critical success factors [86] which includes environment-related, incubatorrelated and incubatee-related factors.
Bergek and Norma propose a model of incubator best practices that is contextual
and goals-based [7]. They suggest that the incubator performs several functions 1)
selection, 2) business support, and 3) mediation. In effect, the incubator is a mediator
between the company and the external innovation system, acting as a bridge with the
intention of leveraging talent and resources. Critical resources include knowledge and
technology, capital, market-related resources, and human capital. Incubators may also
engage in network mediation, matching incubatees with other actors, and institutional
mediation by helping navigate and even shape laws, traditions, values, and norms.
One of the most important success factors to be considered for technology-based
incubators is the selection of incubatees [84]. Support in the development of markets
and products are also key factors. However, other determinants of success lie within
the incubatees and in their relationship with the incubator [86]. A common thread in
the literature is that the major functions of an incubator, apart from subsidizing early
stage growth, is to provide access to social networks, which in combination with intellectual capital, increase the chances of an entrepreneur's success [48].
Some studies have suggested that incubators simply prolong the survival of companies that would normally fail sooner. Rigorous evaluation early in the process by
experienced entrepreneurs is the most effective way of increasing success rates by
producing a survivor bias. This then raises questions about the role of the incubation
process. Consequently, some research has focused on case control assessments of
incubated versus non-incubated startups. The results, however, are ambiguous [1],
[79]. The evidence on the value of specialization in incubators is also mixed [80].
4
Ryerson’s Digital Media Zone
In Canada, there are more than 200 incubators that are members of the Canadian Association of Business Incubation. These incubators serve a range of sectors and purposes from general small business support, to fostering social enterprises in small
communities, to large scale commercialization. They also operate across and within
specific sectors.
The Digital Media Zone (DMZ) was established in 2010, at Ryerson University, a
former polytechnic based in Toronto, Ontario, with deep roots in experiential learning
and applied research. With more than 30,000 undergraduate students, Ryerson has one
of the largest undergraduate entrepreneurship programs in Canada’s largest business
school (with more than 8,000 students). A high percentage of faculty members bring
business experience along with academic qualifications. The University also has active student entrepreneurship clubs and competitions including Students in Free Enterprise (SIFE), Advancing Canadian Entrepreneurship (ACE) Canada, and Students
Advancing Global Entrepreneurship (SAGE), which involve a substantial proportion
of students and promote entrepreneurial activity.
The Digital Media Zone (DMZ) was created by the President of Ryerson University, Sheldon Levy, in response to student requests. He invested in prime real estate and
infrastructure with a clear focus on supporting students with ideas for new businesses.
In April 2010, the University rented 6,400 sq. ft. at the busiest corner in Canada,
Dundas Street East and Yonge Street. The location was then equipped with state of
the art technology [76] and a rigorous application processes for students to qualify for
entry was established. The goals of the DMZ evolved beyond meeting student needs,
however. It aspires to become a critical part of the downtown Toronto ecosystem:
To strengthen the collaborative community of entrepreneurs;
To improve and promote commercialization of technology;
To help build industry clusters (in areas such as context-aware computing, for example) that can compete globally; and
To help keep intellectual property and talent in Canada.
In less than two years, the size of DMZ has more than doubled – it now consists of
16,450 sq. ft. with plans for further expansion. To date it has reported:
41 startups incubated and accelerated;
More than 64 projects initiated;
382 jobs fostered and created through newly formed startups and market-driven
research, plus 56 new jobs at Ryerson itself;
Eight companies which have outgrown the space and since leased their own;
One company has more than 50 employees, while one has failed; and
Currently, the DMZ houses 161 innovators in 36 teams.
One of DMZ’s principal differentiators is the focus on communications and outreach facilitated in part because of its location. In the past year, there have been approximately 430 tours to the DMZ including by government ministers and financiers
as well as leading business people and industry associations. There has also been substantial press coverage, with over 600 instances of positive media coverage locally,
nationally, and internationally. High profile presentations have been made at the Toronto Economic Club (a prominent business network) and at conferences and events
around the world – including in India, Brazil, China and Russia.
4.1
The DMZ Approach
Like other incubators, the DMZ performs the three basic functions identified and
proposed by [7]: 1) selection, 2) business support, and 3) mediation. Companies apply
to enter the DMZ and must pass an initial evaluation, have a unique innovation in the
prototype stage, and a strong business plan that demonstrates a clear market need. The
selection committee consists of industry leaders, faculty experts, peers, and mentors.
Prior to entering the DMZ, prospective entrepreneurs typically have some experience
with a project as well as coaching on basic business planning, provided via SIFE.
The DMZ provides open, flexible workspace, equipment, utilities, and services
such as business plan counseling, mentoring, and workshops. It also provides training.
While the typical DMZ company has entered the Zone with strong training and technical skills in their discipline, they receive support with business plan development
and have ongoing access to coaching and training. Increasingly, there is a focus on
progress monitoring with mandatory check-in meetings scheduled every few months
to provide guidance and advice, monitor progress, and ensure companies are receiving
the help they need to achieve their set milestones. Companies must submit monthly
reports to ensure the DMZ has current information. The DMZ also helps provide human resources to companies including funded internship and student employees. Finally, as noted above, the DMZ provides extensive marketing and communications
support including key marketing and communications materials such as sell-sheets,
website pages, news releases, video pitches, and photoshoots.
In terms of “mediation”, the DMZ actively promotes networking through special
events, networking sessions, workshops, etc. for incumbent entrepreneurs. This helps
companies tap into resources which include experienced serial entrepreneurs or men-
tors, financing, customers, other incubators, and media (which fuels access to the
others). The DMZ provides a directory of available mentors and profiles networking
opportunities through a variety of events and tours. The DMZ identifies sources of
funding and assists its companies with grant applications as well as with finding and
securing other forms of financial support, such as Angel Investments. Given its high
profile, the DMZ ensures a steady stream of prospective corporate customers. It also
organizes joint events with other incubators as well as complimentary passes to
startup related events in Toronto. Finally, a dedicated Media Relations Officer pitches
stories, fields calls, and helps Zone companies with media training and PR strategies
in order to build profile and fuel traffic. Apart from the formal services, there is ample
anecdotal evidence of peer-to-peer mentoring and collaboration across companies.
4.2
The Results
Although a formal evaluation is yet to be undertaken, the DMZ has produced tangible
results in a short time frame. Table 1 (next page) provides a brief description of some
of the DMZ companies and results that they have achieved.
5
Conclusions
Based on a cursory assessment of the data, Ryerson’s DMZ appears to produce a high
number of companies and jobs relative to similar initiatives. While longer term tracking is needed, along with additional empirical analysis, it seems that among the key
factors affecting positive outcomes are the rigour of the original screening process and
the heavy emphasis on outreach and communications which, in turn, ensure that the
companies are exposed to a wide range of investors and customers. This is also facilitated by the central location of the incubator site.
However, beyond the specific results with respect to firm and job creation, the impact of the DMZ seems to be broader in terms of fuelling a culture of innovation. The
importance of the educative effects of the experiential learning in the DMZ along with
the influence of the DMZ in shaping entrepreneurial intentions among the broader
Ryerson community (students and professors) should not be overlooked. Further research is needed to explore this in detail.
The research on entrepreneurship and a culture of innovation suggests that shaping
entrepreneurial intention is a complex process. It is reasonable to assume that the
publicity around the DMZ and its companies, as well as the competition to enter the
DMZ, plays a critical role in building culture by shaping values and narratives of
entrepreneurial successes (and failures). Culture is about stories and values and can,
therefore, play an important role in broadening the aspirations of young people. We
need to understand how this can be done earlier, as many students in the DMZ have
self-selected themselves based on earlier experiences. More work is needed to push
this experience upstream, so that young people are exposed to these opportunities
earlier and see the full range of entrepreneurial opportunities. Exploring this will be
the focus of further research.
Table 1. The DMZ company summary
Company
Outcomes
(number of employees, sales etc.)
500px
DMZ Graduate
Founded in April 2011, 500px is a fast
growing photography website.
Their iPad app is one of the top free photography apps in iTunes.
Voted the number one startup in Toronto in
January 2012 by Techvibes, Canada's leading
technology media property.
Has 16 employees; left the DMZ in December
2011.
Bionik Labs
Currently Incubating
Founded in March 2011, Bionik Labs is a
medical engineering research and development corporation with a focus on
prosthetics and rehabilitation devices.
Working with major hospitals in the United
States and Canada on clinical trials related to
assisted technology for paraplegics.
Has over 20 employees.
Finizi
Currently Incubating
Founded in February 2011, Finizi is a
free online platform where financial
institutions bid for the business of customers in live auctions.
Recently completed a three month beta pilot
for GICs during which it processed over $Can
30M in auction requests and $Can 2M in
completed sales.
Finizi has been featured in the Financial Post,
Investment Executive, Business News Network, Yahoo Finance, and several other
online finance and technology publications.
Flybits
Currently Incubating
Founded in April 2010, Flybits is a Canadian leader in mobile context-aware
computing.
Developed Toronto’s GO Transit’s first official mobile application.
The app was downloaded over 150,000 times
in its first eight weeks.
Their software solution running on Motorola
Golden-I product, the world’s first hands-free
and wireless headset computer received
Motorola’s Golden-idea Award.
Developed the first Connected Vehicle Mobile Solution as part of a research project for
the Ontario Ministry of Transportation.
Department of Foreign Affairs and the Ministry of Economic Development and Innovation
selected it as a top 10 Canadian company to
present at the Mobile World Congress in 2012
and CTIA Wireless in New Orleans in the
United States; has 17 staff.
HitSend
Currently Incubating
Founded in April 2010, HitSend is a
community crowdsourcing tool for gathering, prioritizing, and executing ideas. It
integrates these into existing online
communities.
Chapters/Indigo Canada’s largest bookstore
uses their technology as part of its recently
launched Indigo Ideas campaign for improving customer service.
Has five staff.
HugeMonster
Currently Incubating
Founded in April 2011, HugeMonster
builds casual social games that blend
traditional storylines with interactive and
viral elements.
Approximately 3,000 players play their game,
Code of War, daily.
Has 12 staff.
Shape Collage
DMZ Graduate
Founded in September 2010, Shape
Collage is an online collage maker that
optimally arranges photos into collages
of different shapes.
The product has been downloaded more than
five million times since 2009 and has been
translated into 22 different languages.
Has five staff.
Sound Selecta
Currently Incubating
Founded in April 2010, Sound Selecta
makes ArtJam, a mobile platform that
blends music, art, and technology to
bring users new interactive media experiences.
Apple named ArtJam’s Nursery Jam as one of
its Top 10 apps for toddlers.
Has five staff.
Phosphorus Media
Currently Incubating
Founded in April 2010, Phosphorus
Media specializes in high impact media
systems and interactive displays.
Select clients include: Sony, Ikea, Club Med,
The Gap, Starbucks, Red Bull, L’Oreal, Adidas, and Pampers.
Has five staff.
Teamsave
DMZ Graduate
Founded in April 2010, Teamsave is a
social buying website and platform.
Partnered with Kijiji; both the Kijiji deal site
and Daily Deals run on the TeamSave platform.
TeamSave operates in 20 cities in North
America and has over 50 staff.
Viafoura
Currently Incubating
Founded in May 2011, Viafoura is a
cloud-based plug-and-play commenting
platform targeted to premium digital
publishers.
Currently partnered with 12 of the world’s
largest digital publishers.
Expanded from two employees to 17 in only
six months.
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