The Invention of Waterloo

Canada’s Technology Triangle has spawned more than 450 high-tech companies, including BlackBerry pioneer Research in Motion. But it didn’t just happen: an upstart university had the brains to embrace mathematics
The Perimeter Institute for Theoretical Physics in WaterlooThe Perimeter Institute for Theoretical Physics in Waterloo
On 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.

The 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.

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13 comment(s)

Mark BetteridgeDecember 09, 2011 12:15 EST

I'm proud to be a Waterloo grad. Perhaps those of us now in the Vancouver region can learn from this!

K. WiseDecember 11, 2011 16:10 EST

Nice article, but there were two small points of fact I'd like to point out. Mike Lazaridis grew up in Windsor, not Waterloo, and the Seagram warehouses are made of Yellow Brick, not stone.

ABVDecember 12, 2011 11:29 EST

Proud to be a Waterloo native.

CatherineDecember 13, 2011 20:46 EST

I'm a grad student at the Institute for Quantum Computing. Caleb Rosado sounds like a prolix who uses bad analogies. Quantum physics isn't a "non-dualistic approach to life". Quantum physics is not a self-help guide or a textbook for urban planning. Quantum physics is a predictive model for the behaviors of very small things. I don't know why I should care about this guy, or what he has to do with Waterloo.

AndrewDecember 14, 2011 22:05 EST

At the same time as Waterloo (although it's really about Waterloo Region, not just the City of Waterloo) has been reinventing itself and looking to the future, there has been an incredible investment in preserving and celebrating the past in Waterloo Region and neighbouring Guelph/Wellington County. During the past three years there have been investments of more than $50 million in new capital at area museums and archives. Nowhere in the country has there been such a major investment in local infrastructure that preserves and celebrates a communities past. In particular, check out the new Waterloo Region Museum's new exhibit Unconventional Thinking: Innovation in Waterloo Region.

Ken December 15, 2011 13:44 EST

Just to say: I agree with Catherine, the slipshod use of lab science concepts & terminology doesn't do the science or the referent any favours. I was thinking of Sokal & Bricomnt's 'Intellectual Impostures' when I read this.

But that doesn't take away from a hopeful piece, well researched, carefully assembled interviews and observations. Never heard of your magazine before (I live in Ireland) but I'll keep an eye out from now on.

MartinJanuary 09, 2012 11:44 EST

RIM employees are not highly paid - they are some of the worst paid engineers in the industry. Where Microsoft, Amazon, Google and Facebook are offering new software engineering graduates $100k/year out of school, a good offer from RIM would be around $60k. This is somewhat tragic, as most of the top talent leaves the region after graduating - the thought of staying in Waterloo for their professional life generally doesn't cross most peoples minds.

M. TurmonJanuary 09, 2012 11:44 EST

Halfway down page 1, we read:

\"The University of Waterloo began with engineering, mathematics, and science, at a time when these weren’t especially prized. In the early ’60s, math [...] had little practical application other than teaching like-minded thinkers who came afterward.\"

This is utterly mistaken. Sputnik was in 1957, which galvanized the space race. And before that, the atom bomb, radar, and codebreaking during WWII proved how obscure math and physics concepts could have critical real-world applications.

Tony A.A.January 09, 2012 11:44 EST

Awesome article. Thanks Don for the elaborate description. And I'm with Ken, despite the misuse of quantum physics as a metaphor, the article is still very well written and makes one feel proud to be associate with the region.

Lynne HageyJanuary 13, 2012 13:40 EST

I'm proud to be a Hagey!

Curiouser January 14, 2012 08:30 EST

Article claim...

“... 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.”

On-line reality check...

1. Stanford’s IP policy: “Requires that potentially patentable inventions created at Stanford with more than incidental use of University resources be disclosed and assigned to Stanford, regardless of the source of funding which supported the work, and regardless of the inventor's association with Stanford University.”

2. Berkeley (the other academic ‘midwife’ of SiliconValley): “The University of California Patent Policy requires all employees, users of University research facilities, and those receiving gift, grant or contract funds through the University to agree to assign inventions and patents to the University, except those resulting from permissible consulting activities without use of University facilities…”

TCJanuary 16, 2012 18:49 EST

Lots of cultural centres in the city as well:

The new Jazz Room:
http://www.KWJazzRoom.com

The Waterloo Community Arts Centre (aka Button Factory):
http://www.ButtonFactoryArts.ca

NUMUS:
http://numus.on.ca

ChrisJanuary 23, 2012 11:26 EST

I am regualrly involved in conversations about urban renewal and vibrant cities. Kitchener-Waterloo is often held up as the poster child of what is possible with some forward thinking and optimizing the resources, knowledge and energy of a university. I grew up in KW in the '50s and '60s and have visited frequently over the past 35 years. The article accurately reflects the transformation that has taken place in my lifetime. Well done!

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