n the surface, Canada’s Technology Triangle — comprising the twin cities of Waterloo and Kitchener, Ontario, and Cambridge to the immediate south — reflects the development Richard Florida described in his 2002 bestseller, The Rise of the Creative Class. In 2007, Waterloo, with a population of roughly 120,000, was named Intelligent Community of the Year by the Intelligent Community Forum, which cited the region’s 334 technology companies (now listed as more than 450), its post-secondary institutions (the University of Waterloo, Wilfrid Laurier University, and Conestoga College), the co-operation between business and academia, and the high levels of philanthropy and local reinvestment.

The Waterloo region’s evolution followed a familiar North American pattern. It started as an agricultural community, grew into an industrial base and urban hub, achieved rapid expansion (in 1965, Kitchener was the fastest-growing city in Canada), then watched as its industries died and the downtowns hollowed out. The area started with gristmills, and proceeded through tanneries, breweries, television plants, and shoe factories, most of them gone now. Waterloo has been named both the Button Capital and the Rubber Capital. But the city lost manufacturing jobs to offshore concerns, to economic and cultural shifts, and to the rise of the Canadian dollar. Unlike hundreds of similar cities that dot America’s Rust Belt, though, Waterloo went on to flourish.

Part of this has to do with the region’s curious historical combination of conservatism and entrepreneurial spirit, its ability to adapt to new industries as old ones die. Manufacturing remains the largest employer, but it also registered the largest sector decline between 2001 and 2006. The technology sector, while smaller, is the fastest growing.

Technology is viewed as the holy grail of modern economies. It brings in jobs and money; it brings the future. A lot of energy is spent attracting it, growing it, and nurturing it, with varying degrees of success. Waterloo’s tech sector is often equated with BlackBerry pioneer Research in Motion, which has its headquarters there. The two are viewed in lockstep, the way General Motors was linked to Flint, Michigan. But, in fact, Waterloo’s technology boom began more than fifty years ago, and at the centre of it stood the University of Waterloo.

he university was established in 1957 by two local businessmen. One of them was Gerry Hagey, a public relations man for the B. F. Goodrich tire company who became the university’s first president. UW’s initial focus was on producing actuaries for the local insurance companies, and engineers to accommodate the postwar industrial boom. Hagey implemented a co-op program that had engineering students enter the workforce for four months of the year while they earned their degrees, a course of study that began in the early ’60s and eventually expanded to other disciplines at UW. He had seen versions of the program in the US and thought it would work at UW. But the university was just getting started, and the curriculum was greeted with disdain by established institutions. At the time, a deep sense of distrust existed between industry and academia: universities considered industry a crude, bottom line culture, while industry found academics irrelevant and out of touch. Both groups had a case, and Hagey thought each would benefit from exposure to the other.

Most Canadian universities began with either a religious affiliation or an emphasis on the humanities. The University of Waterloo began with engineering, mathematics, and science, at a time when these weren’t especially prized. In the early ’60s, math (like philosophy and English literature) was studied by people who loved the discipline; it had little practical application other than teaching like-minded thinkers who came afterward. But the head of the math department, Ralph Stanton, had the vision to see that his field would become increasingly integral to modern life. He had written a textbook on numerical analysis, a branch of mathematics that is closely aligned to computing. In 1960, the university established its Computing Centre, and suddenly math had a practical application. The department grew so quickly it was expanded in 1967 into a separate faculty, the first in North America.

At this point, computers were still mostly bungalow-sized machines that sat in large, locked, heavily cooled rooms. The centre was run by Wes Graham, who was innovative in letting undergraduates use the equipment. IBM credited him with democratizing what was still an esoteric and largely elitist world, and he eventually received the Order of Canada for his contribution to computer science. Given access to the machines, students responded by designing early computer languages (Watfor and Watfiv) that were later adopted by universities around the world, including the Massachusetts Institute of Technology. He also formed a campus group to distribute the software, and that evolved into a computing company, Watcom, the first of many to be spun out of the university.

By 1984, UW claimed one of the world’s largest computer science programs. At the time, universities were among the biggest markets for computers, and manufacturers courted them heavily, assuming students would end up buying whatever they had used at school. IBM was the giant then, and it offered computers to universities at 80 percent discounts. Digital Electronic Corporation, an IBM competitor, upped the ante in 1984 by giving UW $25 million worth of equipment, further expanding students’ access.

The school continued to develop its science and technology base through several proactive presidents, including Doug Wright, who served from 1981 to 1993 and had been with the engineering department since the beginning. He and another engineering professor initiated a policy whereby students and staff retained the intellectual rights to whatever they developed. This turned out to be a critical decision. Some universities (Stanford, the midwife to Silicon Valley, being the notable example) follow the same policy, but others (like the University of Toronto and Harvard) retain some intellectual rights. However, Wright says, schools that give up patent rights tend to gain more net benefit than those that don’t. The practice creates incentive, and there’s little downside, as a single patent isn’t much use. “You need an armload to open a business,” he says. The arrangement also helps foster a symbiotic relationship between the outside world and the school; UW has spawned more than 250 science and tech companies.

OpenText turned out to be one of the most important. In 1984, UW secured a contract from Oxford University Press to computerize the Oxford English Dictionary. Wright received a letter from a British friend who had noted the approaching end of the OED’s copyright and was looking into digitizing the twenty volumes. “The publisher realized that the technology was very important,” Wright told me, “and that English was becoming the international language for business and technology.” He went to England and met with IT personnel at Oxford University Press, and said UW had the expertise to take the OED into the digital age. No one had heard of Waterloo, and there wasn’t much enthusiasm for using a Canadian university. Back home, the tech people at UW were equally unenthusiastic. They had no interest in the seminal dictionary, and were unconvinced the project would be a worthwhile exploration of computer science.