Canada’s Cybersecurity Capital
As the capital of New Brunswick, the City of Fredericton is one of the most immensely successful economic narratives right across Canada. A beautiful, resplendent municipality geographically bisected by the majestic Saint John River, it represents an important cultural, artistic, and educational epicentre for the entire province with still a vast untapped future potential.
The continued economic success in Fredericton over the last three to four years can be traced back to 2014, which was a watershed year for economic development and transformation. It was a time that was representative of two entities known as Knowledge Park and Ignite Fredericton merging together under one organizational structure as a means to drive economic development and clustering in the knowledge-based industry.
Ignite Fredericton and Knowledge Park work very much in unison, but they are in fact two distinctly separate entities, functioning under one umbrella. Infrastructure investment is a Knowledge Park driven initiative while Ignite Fredericton addresses such criteria as population growth and workforce development. It all comes together as a single-managed board and operate under three brands: Knowledge Park; Ignite Fredericton; and Planet Hatch; which is the entrepreneurial arm that delivers programming for startups and commercialization of intellectual property that’s being developed throughout the region and is led by Executive Director Adam Peabody.
In addition to providing the economic development backbone for the City, Ignite Fredericton also takes Oromocto and New Maryland into the fold, thus serving a population base of almost 110,000 people. Oromocto is home to CFB Gagetown, one of the largest military bases in Canada and a staging area for most global activities when the military is mobilized abroad.
The Canadian Business Journal recently spoke with Larry Shaw, CEO of Ignite Fredericton and Knowledge Park about the municipality’s incredible economic journey, especially over the past five or six years.
Throughout 2015 and 2016, Shaw and his team implemented the ambitious plan and the positive results have been driven by Vision 2020 and the prime objective of creating a very strong, robust economic development component at arms-length from the City and representative of the community at large.
“When we look at the initiatives that we are responsible for we have also recognized that population growth is strategic and that includes a five-year immigration strategy and includes our partners, including the Chamber of Commerce,” begins Shaw.
The planned course of action and execution of the comprehensive economic plan has proven to be the correct one. There has been significant income and Fredericton is bucking most trends at a national level whether it’s with population or economic growth.
“We have good inward movement in terms of immigration numbers but also with relocation of ex-pats coming back into Fredericton. The results are indicating a very good story,” notes Shaw.
CBJ also had an in-depth discussion with Mayor Mike O’Brien, who spent 15 years as a city councilor prior to becoming mayor in 2016 and as such he’s seen – and been a direct part of – much of the expansive economic growth within Fredericton over the past two decades.
“We managed to get our debt down and that allowed us to put investment into infrastructure renewal as well as new facilities and cultural amenities. It positioned our city as an even more attractive place to live and invest,” he tells us.
A substantive transition was activated within the past six years with a noticeable upturn in entrepreneurial spirit and follow-through was realized. More and more graduates from universities and colleges now have a primary goal to create a business of their own, which has been a growing boon for the startup community.
Full-fledged systems are in place through Ignite Fredericton and others to encourage the creation of business opportunities and to train these budding entrepreneurs and help them secure capital and put forth a robust business plan.
“We have a real bold, young population here that is helping to create jobs and wealth,” says O’Brien.
As the mayor reflects, there was a time when Fredericton was exceedingly reliant on the universities and the seat of provincial government. While those remain vital economic drivers within the community, the buildout of private entrepreneurship is what is elevating new and expanded opportunities.
“Our immigration and retention numbers are both up and they are helping to bring new skillsets that creates a real buzz in our city,” remarks O’Brien. “I was involved in the original creation of Vision 2020 back in 2013 and one of our goals was to be recognized as the startup community of eastern Canada. By 2016 we were identified as the startup community for all of Canada and the year prior to that UNB was recognized as the most entrepreneurial university in Canada.”
“They are educating the students and teaching them entrepreneurship and business acumen and we have the systems in place through Ignite Fredericton and other support groups to take them and help nurture them and grow their business plans and show them how to export their product once they are ready to do so,” continues the mayor.
Ignite Fredericton
In 2013, Ignite Fredericton embarked on a program known as Vision 2020, an economic development framework that took a forward-looking agenda for the City. It was germinated with life on the knowledge a number of patterns needed to modify in order to reach the next level of success, which Shaw readily admits.
“We did that with the intent of focusing on the knowledge-based sector and diversifying our economy and policy structure that allowed investment,” he says. “Even though Vision 2020 is now in its sunset, the outcome of that – and the recognition of where we are going – is still very much in play and gives us a very good template for the coming years.”
Wealth creation isn’t just about increased commercial activity; it’s about nurturing investment-capable jurisdictions and inward investment dollars coming from outside the province. As such, Fredericton is primed and ready to serve as one of the leading potential business locations in Canada over the next five to 10 years.
As Shaw and his professional team have advanced the economic development agenda with the strategies set forth in Vision 2020 there have been a number of pieces that have come together with impressive results.
“By and large most of them have worked out quite well. Those that haven’t, we’ve altered them and modified them in a way that they have become effective – particularly in the Export Igniter,” he says.
Export Igniter
As part of the overall economic plan, Export Igniter is an acceleration program that helps growth-stage companies navigate the complexities of international business and break into new markets. During the course of 12 weeks participants receive workshops, mentorship and other required resources. Each company is also paired with a team of undergraduate students from the University of New Brunswick’s Faculty of Management who undertake market research and develop an export strategy for the entrepreneur they are paired with. Graduates leave the program ready to tackle new markets with an efficient, comprehensive export and sales strategy.
“Export Igniter is a unique and impactful program for pre-export companies in Atlantic Canada,” says Peabody. “Eighty-five per cent of our graduates from the first three cohorts are now exporting with growing sales, creating over 20 new jobs in the process. We aim to help this year’s cohort achieve similar levels of success.”
The Export Igniter program was developed in 2016 through a partnership between Ignite Fredericton, Planet Hatch, the Fredericton Chamber of Commerce, Opportunities NB, the University of New Brunswick, and Canadian Manufacturers & Exporters. January 22, 2020 marked the start of the fourth cohort of this program.
Established companies that enter the Export Igniter are those that are proven ready to expand their marketplace and when they do, Ignite Fredericton is there to provide a wide variety of services around that specialized program.
“We match those companies with a team of third or fourth-year students from the business faculty here at the University of New Brunswick,” offers Shaw. “It gives value to the company in the Export Igniter so they can access skills they may not have in residence. The students will have gone through such things as market analysis and a lot of theoretical training for business. It allows business to get access to valuable labour and the students have a work-ready assignment that they can take into the workplace as experience.”
Almost all of the programming with Export Igniter involves putting in the experiential learning aspect within it, which is the evolution of how people learn. Several other similar-type programs have also been launched, including the likes of the Sales Accelerator, with great statistical results from there as well.
Sales Accelerator
The Sales Accelerator program helps entrepreneurs build their sales pipeline, develop skills to close deals fast, and drive revenue for scalable growth. Participants in the Sales Accelerator receive: comprehensive sales training from industry experts; up to $25,000 in funding for market entry and business development activities; and access to a fully-funded, post-secondary student intern to help.
Graduates of the Sales Accelerator program leave equipped with an entirely developed sales plan and pipeline, qualified leads, necessary skills to negotiate and ‘close the deal’, and predictable recurring revenue to scale. On average participants from the 2019 program reported the following post engagement:
• 32% increase in number of customers
• 190% increase in MRR
• 270% increase in forecasted revenue over 12 months
Cybersecurity
Without doubt the most predominant transformation that is spearheading an entirely new and exciting level of economic prosperity in Fredericton is within the expansive field of cybersecurity. The calculated strategy of moving in this direction has been planned for quite some time and now much of that planning is coming to fruition with the execution. In fact, Knowledge Park is widely recognized as leading the single-largest cybersecurity infrastructure program in the country.
“We are $29 million in on a $37 million purpose-built facility that will act as the collaboration centre – a privately held, privately developed business model at Knowledge Park – a collaborative centre where academics, business and governments bring their cybersecurity requirements in critical infrastructure,” explains Shaw. “Protecting all of those systems is what we’ve positioned as our strength. It’s the militarized capabilities of a nation. It’s the food protection system. It’s the energy and telecommunications networks and the financial backbone.”
Critical infrastructure is what Shaw and his team focuses upon. Cyber experts across the country point to Fredericton as the leader in critical infrastructure protection in Canada – if not the world. That is a momentous level of responsibility to bear.
Knowledge Park is putting that $37 million into a dedicated purpose-built facility that has the capabilities of operating at a Level 2 Security Operations Centre (SOC). At the same time it has the ability to be post-disaster operative for 96 hours. If there was some form of natural disaster, the Cyber Centre at Knowledge Park could become the potential operating facility of local government due to the rigorous standards to which it has been constructed.
“The organizations occupying the building would be able to operate at a Level 2 capability and therefore be able to work on National Defense programs,” confirms Shaw. “We’re running a Pan-Canadian organization called CyberNB, which is bringing in together thought leadership in critical infrastructure across Canada.”
There is not another privately-held building of this nature anywhere in Canada. Even prior to the initiative reaching maximum output, about 400 new jobs have already been created in the cyberspace realm in Fredericton.
The additional business platform is building on a cluster that was already in place. Shaw believes that the combination of a bit of good fortune combined with a plethora of dedicated, hard work and solid vision has pushed towards a successful direction in terms of where Fredericton stands now. Over the past few months UNB operated an accelerator-focused on clean-tech and cybersecurity.
“We now have about 10 companies that have emerged and are commercializing cybersecurity capabilities. They are gaining a significant footprint,” Shaw proudly states.
The figures are truly astounding when it comes to wrapping the cybersecurity element inside some of the expansive dynamics that are being monitored. On average, there are now 39 cybersecurity attacks every second of the day throughout the world. For that reason, it’s easy to understand why this is such an expanding and constantly evolving field due to the urgent requirements of capping these nefarious outbreaks, and as such there is a critical requirement for many more highly-skilled, qualified people to work within this all-important industry to ensure the security and safety of an infinite number of systems in Canada and around the world.
“We are somewhere in the magnitude of two million people short in the cybersecurity field,” emphasizes Shaw. “Due to the shortage, by 2021 about 300,000 of those don’t even have job titles yet. It means the industry is evolving in such a way that jobs are becoming obsolete before they even get filled. It’s an indicator of just how fast this field is changing.”
UNB is a recognized leader in cybersecurity and cyber defense throughout the nation. The university, the government and the city have created North America’s first Level 2 cyber park and its 135,000 square-foot facility, which will open this fall.
“It will establish Fredericton as one of perhaps two cyber epicentres in Canada and one of the leading ones in the world. It will create hundreds of jobs immediately with the potential for thousands of jobs over the next three to five years and take our economy to a completely different level,” O’Brien proudly states.
“The province came aboard and created CyberNB and has been executing extensive training of high school students to fill the workforce requirements that will be necessary in leading the charge along with Ignite Fredericton and the University of New Brunswick,” explains O’Brien.
Economic Transformation
In harkening back to the business landscape of New Brunswick in the late 1980s and early 1990s it likely would have been considered the call-centre capital of Canada. Skillsets, training and incentive programs attracted about 125 companies in what was an extremely successful venture. Many of those same macro-level dynamics now apply to cybersecurity. One clear difference is that cybersecurity brings with it notably higher wage scales and skills, but the theory behind the successful development has many similarities. The result is the creation of $150,000 jobs entering into the Fredericton marketplace.
“We had the largest capital program this past year that we’ve ever had in our history with $170 million in capital programs. Much of that was led by the cyber initiatives that Knowledge Park is spearheading,” remarks Shaw.
“We have a growing population, bucking the trends of the Atlantic Canada region,” he continues. “A momentum is gaining and we have inward migration with a diversified economy. We have 24 different ethnic groups in the City now and our unemployment level is below the provincial average.”
Once the cyber park building is completed it’s expected there will be about 1,500 employees working at about 70 companies. The 135,000 square-foot cyber building is a four-floor, twin tower complex and sits on an 11-acre plot of land with gated parking and berms and bollard protectors, keeping it safe from any nefarious-minded plans.
There are three elements of security in the new building. The physical element and two levels of electronic security are invoked. An individual requires a secure card, a finger print and a retinal scan or combination of those in order to be granted access to the building premises.
Foundational Elements
By focusing on the foundational elements of what drives the municipality’s economy is something both O’Brien and Shaw rate as vital. Ensuring an adequate labour supply and the educational framework in providing the right skillsets along with an immigration policy to enhance population growth are all poignant markers. It’s also about ensuring policy development at the federal and provincial levels and assessing every aspect of what helps companies thrive.
An obvious connection path to external partnering sources is the airport, which serviced more than 427,000 passengers in 2019. Over the past five years Fredericton has been averaging about 7% growth year-over-year at the airport. Those numbers are both business and tourism related. The airport is undergoing a two-year expansion project, which is now at about the halfway point. The upgrade will allow it to accommodate expanding air traffic, both commercial and private.
“The airport is a direct link to international markets. It’s now undergoing a significant $35 million expansion,” reveals Shaw. “There is a high level of construction happening in the downtown core and we’ve got the peripheral areas such as Knowledge Park expanding to be mixed business and residential. All the little bits and pieces come together to form one big, successful story.”
The traditional backbone that first created the main characteristics of Fredericton is the downtown core, which remains a vital component of the City’s effervescent personality. A wonderful convention centre is often called upon to host business symposiums and conferences as well as numerous entertainment events.
“It’s part of the value proposition,” notes Shaw. “When it opened we were able to track a different element of those trade shows and conferences. There has been significant growth in terms of events and utilization. A new hotel was built next to it to accommodate visitors.”
Two new complexes are being built downtown to accommodate continued business and residential expansion. Both are being developed as mixed-use structures with office and retail on the ground floors. Meanwhile, the City has finalized an agreement on a plot of land that had been run by the Exhibition Centre. The land is being repurposed and will be used for additional high-density construction.
Culture and Entertainment
The City of Fredericton is known as a cultural, artistic and educational epicentre in the province with a bustling tourism sector throughout the entire year, highlighted by the legendary Harvest Jazz and Blues Festival, which is one of the largest events anywhere in Atlantic Canada every autumn. It is often described as ‘the best international festival experience on Canada’s east coast’, and attracts hundreds of musicians and performances.
“It’s one of the premier events in Eastern Canada,” O’Brien proudly says.
Fredericton is blessed with having a very robust tourism sector with visitors from across Canada and throughout the world to stay at a number of hotels and eating at many fine restaurants and taking in a variety of entertainment options.
“Two years ago we created a Thursday Night Market in our downtown cultural centres. It attracts anywhere from 6,000 to 8,000 each night and that in turn has created a demand by the public for more of these types of events,” responds O’Brien.
“In the winter we have a large event called FROSTival. It began with a couple of local bar owners booking east coast bands and it’s grown over the years,” continues the mayor. “Now it is two solid three weeks of events, much of it focusing on music but also outdoor activities in late January and early February.”
“Overall, tourism has gone up by 7% over the past two years and it continues to grow,” notes O’Brien. “We have an abundance of natural parks and green space along with outdoor amenities such as swimming pools and tennis courts.”
Fredericton frequently manages to attract a variety of regional and national sporting events. The City has held more national and international curling events out of its state-of-the-art facilities in the last few years than anywhere else in the Atlantic Provinces, with a dedicated team tasked with focusing on sports tourism and winning those types of hosting opportunities.
An attractive feature is that so many amenities are within financial reach of the middle class in Fredericton, whether it’s housing, access to entertainment or the ability to take a nice vacation. The City has about 450km of walking trails and the highest density of microbreweries and alcohol producers in Atlantic Canada. Fredericton was also one of the first jurisdictions to offer free Wi-Fi in its downtown core.
“When you look at making investments that allows the city to have one of the lowest tax rates in the region and at the same time maintain all services we don’t have the same challenges in our infrastructure. It’s been invested in for quite some time now and has been maintained properly,” remarks Shaw. “One of the things we talk about with clients is ensuring them we will make time for them. You don’t have two-hour commutes to get here from home. You can live 10 minutes outside the city in a beautiful rural city or live right downtown.”
A Bright Future
The widespread diversification of business development within the city puts Fredericton in an enviable position for the future. There is also a robust cross-section of very large, mid-sized and small enterprises that are trading within the community, including very well-known international brands such as IBM and Siemens. There is also a substantial bioscience and biotechnology sector in the community as well as continued natural resources development with the presence of Irving Oil and Enbridge Gas New Brunswick.
“Our city is growing and our businesses need people and we have a robust immigration strategy to help with that,” mentions O’ Brien. “We need talented new immigrants to come to our community. We are aggressively promoting that and support those people when they come here. We’ve been using this strategy for about a year in what is a five-year program plan.”
Fredericton has been a national leader on environmental sustainability, reducing its operational energy consumption and environmental footprint by about 38% over the last decade. In recognition of its ongoing proactive stance on environmental protection, Fredericton has been selected as one of the top 20 cities in Canada on climate change adaptation for reducing greenhouse gases.
“We have a great team at the city along with strong community leaders that want to work hand in hand as we plot our exciting future,” says O’Brien.
The economic team, led by Shaw, recognizes it will be imperative to continue a strong focus on a sound export strategy. The more jobs that can be brought in to existing businesses and export their intellectual property is an efficient way to maximize investment. Cost structure, both business and individual, will also be high on the agenda. It’s about keeping the development community happy but also do not wanting to create an unreachable restricted market, which drives up prices.
“Over the next number of years we’re looking at having between 1,000 and 1,500 people each year come to our city in terms of population growth. We’re going to look for continued expansion in the diversification of our economy,” forecasts Shaw. “Right now our sights are heavily on cyber but we’re also looking at what’s beyond that – so digital health is an area we believe will have critical growth. We’re started to put a lot of effort in biosciences including biofuel and biomass.”
During its impressive economic growth, Fredericton has become a natural magnet for private-sector investments thanks in large part to the efforts of Shaw and Ignite Fredericton. Additionally, the city has just adopted a new 25-year municipal plan and growth strategy and it’s being championed by city councilors and the mayor.
“I’ve been out talking with non-profits and small groups and real estate companies to explain the plan in greater detail. We want it to be attractive to the private sector in order to fund the growth and ensure it is respectful of the environment,” pledges O’Brien. “We plan to continue making this one of the most exciting and resilient cities in Canada.”
www.ignitefredericton.com
www.fredericton.ca
