Canada’s top university startup accelerator is seeking funding from the federal government to expand its programming into rural Ontario communities outside its Toronto headquarters, and in cities across Canada.
Toronto-based DMZ had previously shelved plans to expand its programming into smaller cities and towns. Now, the startup accelerator is reviving those ambitions as COVID-19 popularizes remote work.
The Ryerson University-based DMZ registered to lobby the federal government in August for “grants and contributions” for its rural expansion in its home province as well as across Canada.
In an interview with The Logic, Sherif El Tawil, senior director of programs and partnerships at the DMZ, said the tech hub has long had ambitions to expand its programming into small cities and towns outside major urban centres. In 2017, the Ontario government under Kathleen Wynne granted the incubator funding to offer its programs outside Toronto. The DMZ engaged with about 20 rural communities on the opportunity, but the Ford government pulled funding for the initiative before it could deploy its curriculum.
Now, the DMZ is seeking out new opportunities in rural communities as COVID-19 popularizes remote work. “Cities no longer have to be the epicentre of where talent needs to be for growth and economic prosperity,” said El Tawil. “There is an opportunity in smaller townships and cities.”
Ryerson is exploring expanding at the same time MaRS Discovery District is planning a $60-million accelerator in Calgary. The Logic first reported details of the planned expansion, which the Toronto-based accelerator is pursuing in partnership with the University of Calgary. While accelerators have been popular in major Canadian cities for the past two decades as resource hubs for supporting local startups, smaller municipalities across Canada have more recently adopted the model to help grow their tech ecosystems.
The DMZ has already started growing outside Canada’s biggest city. Last September, it launched the Niagara Falls-Ryerson Innovation Hub in partnership with the city, and in May, it announced an expansion into Innisfil, Ont., a town of fewer than 37,000 people. El Tawil said the DMZ partnered with the town—almost 100 kilometres outside Toronto—in part because of its talent pool and because the municipal government had already shown interest in innovation, through initiatives like its partnership with Uber and its system for paying property taxes with cryptocurrency. While COVID-19 has pushed the program fully online for now, virtual coaching and mentorship was central to the program’s design even before the pandemic, said El Tawil, a model that could serve as an example for other expansions.
Marcy Burchfield, vice-president of the Economic Blueprint Institute at the Toronto Region Board of Trade, said the rural incubator strategy could play a role in Southern Ontario’s economic recovery, after losing more than 600,000 jobs across the 34 municipalities that make up the Ontario innovation corridor. At its Regional Recovery Summit this month, the Board of Trade presented recommendations for the economic recovery, in which it described the need for municipal governments to work with the tech community to improve efficiencies in how they deliver services in a bid to cut costs after having their budgets depleted through the pandemic. At the same time, the pandemic has opened up possibilities for entrepreneurs to launch and grow businesses from anywhere; not just major cities, said Burchfield. “We estimated that, across the innovation corridor, about 50 per cent of jobs have the capacity to work remotely. There’s new opportunities to live outside of the innovation core.”
Burchfield noted, however, that improving rural broadband and public transit are critical gaps that governments need to fill if startups are to thrive in smaller municipalities.
On top of internet-connective and good mobility options, the DMZ is looking for a few specific characteristics in potential satellite hubs. “There needs to be local talent, whether it’s existing or potential for talent to move to that community; regional customers or investors; and connections to industry,” said El Tawil. While DMZ is mostly focused on potential hubs in Ontario, the director said the incubator would “absolutely consider” programs across the country.
El Tawil did not say which specific towns or cities Ryerson was prioritizing for its next expansion. He did, however, say Collingwood, a town about 150 kilometres north of downtown Toronto, is a potential candidate. “They’re evaluating their [tech] ecosystem right now, and we’ve been a part of that process,” he said.
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The Ryerson DMZ has long ranked among the top five university-based accelerators in the world, according to UBI Global’s annual ranking based on performance indicators like job creation, sales revenue and fundraising dollars. The DMZ has managed to avoid provincial cuts made last year to non-university-based accelerators, like MaRS Discovery District, Invest Ottawa and Communitech. However, further expansion would likely require more outside financing. The launch of DMZ Innisfil, for instance, was possible because the town agreed to fund the program itself, and the Niagara Falls-Ryerson Innovation Hub received $3 million from FedDev Ontario for its launch.
El Tawil said representatives from the incubator haven’t yet met with government officials, but that prospective meetings “are to talk about what we see as the potential to share our story of Niagara Falls and Innisfil with the government and perhaps use it as a model for economic recovery in the future.”