Youth Entrepreneurship Growing Rural Business Ecosystems to Foster Youth Employment

EDCO Presentation February 6, 2014

WHO WE ARE- PELA CFDC PELA CFDC has been a trusted partner of Government for over 25 years by effectively and efficiently delivering the CF Program, CAF Program, OSEB Program and the EODP Program. Key elements of our activities include: • Access to high risk capital through an Investment Fund for loans & equity • Business advisory services and entrepreneurial training- OSEB • Business development and community capacity building- EODP • Strategic community planning that supports innovation and coordination of resources

EDCO Presentation February 6, 2014

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RURAL CONTEXT • Poor rural economic diversity coupled with new, disruptive technologies like cloud computing have jeopardized the ongoing viability of many sectors in rural Ontario including Main Street retail. • Rural economies have come to rely on lower paying, seasonal industry sectors that are now being lost to lower cost, off-shore operations.

EDCO Presentation February 6, 2014

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RURAL CONTEXT • Rural Ontario continues to experience an exodus of Science, Technology, Engineering & Mathematics (STEM) grads specifically and youth in general. Youth re-attraction is challenging without employment opportunities

• Limited existing entrepreneurial infrastructure or mentorship for knowledge sector startups in rural Ontario

EDCO Presentation February 6, 2014

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WHY YOUTH ENTREPRENEURSHIP •Digital Darwinism •Technology & society are changing faster than people and business can react • Software is making some workers more productive but also making others less essential • What will happen when software replaces knowledge workers? •

Jobless recovery following the recession • While SME’s sales are increasing, they are not increasing hiring or wage rates

•For the youth of today, self employment & entrepreneurship is an extremely attractive option

BEING THE BOSS MAY BE THE BEST OPTION!!!

EDCO Presentation February 6, 2014

WHY YOUTH ENTREPRENEURSHIP • World’s 8 best entrepreneurs started companies in their 20’s & 30’s. Combined they account for: – $375 Billion Revenue – 500,000 Jobs • All had access to ecosystems

EDCO Presentation February 6, 2014

PLACE MATTERS Not everyone lives in urban centres. Ontario’s innovation investment strategy should at least have a balance of urban and rural investment. Over dependence on investment in urban centres, with extreme cost of living, often makes it necessary for potential entrepreneurs to seek corporate employment to survive, thereby putting off entrepreneurship and the benefits to the economy of innovation.

EDCO Presentation February 6, 2014

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PLACE MATTERS

Ottawa

Kingston

Why rural? Why eastern Ontario? • PE/LA Counties ideally located relative to Kingston, Ottawa & Toronto • Key proximity to post-secondary institutions- Loyalist & St. Lawrence Colleges, Queen’s University & RMC • $250M investment in broadband by Government provide access to the global marketplace • Quality of Place- lifestyle draw

Toronto

EDCO Presentation February 6, 2014

THE NEW INFRASTRUCTURE • Municipalities are focused on road, bridges and water/wastewater infrastructure (much of it unseen and below ground) • Changes in technology & demographics, the globalization of the world economy and the drive for ever lower costs of operation is changing the composition of our economy • The rise of the knowledge-based industries and stagnation of manufacturing job growth requires a refocus on new sectors • These new sectors need physical office space, skilled labour, high risk capital, access to markets and mentorship and other support programs to succeed • A robust entrepreneurial ecosystem is the new infrastructure EDCO Presentation February 6, 2014

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OUR MODEL Our entrepreneurial ecosystem provides: • • • •

COMMON PLACE for interaction PARTNERS to sustain support network INVESTMENT CAPITAL for promising businesses STRUCTURE companies for dividends, accountability and good governance • LEVERAGE -experience, knowledge and contacts of mentor to train entrepreneurs in creating sustainable businesses • PRODUCTIZING and COMMERCIALIZING expertise to create dividend-focused community based enterprises

EDCO Presentation February 6, 2014

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HOW OUR MODEL DIFFERS Private/Public Early-Stage Equity Investment

Traditional Venture Capital or Angel Equity Investment

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Mentorship & funding

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Funding only

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Return based on dividend

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Return on exit

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Community based

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Financial instrument

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Daily business participation

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Involved to protect self interest

 ECOSYSTEM DRIVEN

 EXIT DRIVEN

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Participate with the entrepreneur

First out with preferred terms

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PHYSICAL FACILITIES • In rural communities, while there are Main Streets (retail) and Industrial Parks, there is often a lack of commercial office space • Start up Incubators/ Business Accelerators are in fashion • Incubators offer:  Co-location with scalable cost structure for start ups with limited

resources  Synergies from working with other start ups including accessing labour and skills  A focal point for economic development partners to provide better support, mentorship and funding

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PHYSICAL FACILITIES • Situated on Picton harbour, the PEC Innovation Centre is a 15,000 sq. ft. business accelerator facility with 24 office suites, guest accommodations, shared boardrooms, kitchenette and recreation space • Spawned a fledgling technology sector in rural Prince Edward County, going from zero technology jobs to hosting 12 new companies and over 40 new ICT jobs , mostly young, recent graduates. EDCO Presentation February 6, 2014

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WHAT HAVE WE DONE

Little Think Tank

EDCO Presentation February 6, 2014

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PHYSICAL FACILITIES • The new Napanee Innovation Academy is a 6,000 sq. ft. gothic architecture, Victorian schoolhouse that is being converted to a start up incubator for youth entrepreneurs • Scheduled for completion in April 2014, it will feature 12 offices, commons areas with board/meeting rooms and the Napanee Makerspace with 3D printers & associated equipment

EDCO Presentation February 6, 2014

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NETWORK PARTNERSHIPS • Proximity to post secondary education institutions provides important competitive advantages for the supply of labour and access to innovation • Examples- Monieson Centre – Eastern Ontario Research Partnership • Queen’s Innovation Connector Partners

• Federal/Provincial program cooperation is essential to maximize outcomes from finite resources and in reducing duplication • RIC/CFDC co-location and sharing of client referrals- access to ONE and MaRS • NRC-IRAP/CFDC co-location and ongoing partnership with Fed Dev

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INVESTMENT CAPITAL • We have created a Private/Public collaboration between PELA CFDC and First Stone Venture Partners to provide $200,000 to $400,000 to businesses • First Stone Venture Partners is a newly formed group of high net worth entrepreneurs that is helping to grow our community-based, sustainable business ecosystem for technology start-ups • Potential startup businesses are selected and investments made based on their ability to generate a consistent, annual return. We encourage sustainable business practices rather than building for quick exits • Critical to the success of our businesses is the constant, expert private sector mentorship provided by First Stone partners and governance controls that are mandated by First Stone thereby avoiding many of the mistakes of new ventures.

EDCO Presentation February 6, 2014

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PRESENTATION TAKEAWAYS 

Partner with Colleges and Universities to drive business development through access to labour (youth) and innovation (youth and faculty).

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Private-Public collaborations are a critical elements for investment, business-university knowledge/innovation transfer and long-term business success. All of this is even more important for youth entrepreneurs

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Challenge CFDC’s (in rural areas) and other Economic Development organizations to share, collaborate and develop efficient methods to support entrepreneurs .

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THANK YOU! Craig Desjardins, MBA Executive Director PELA CFDC 613-476-7901 ex 201 [email protected]

EDCO Presentation February 6, 2014