Mississauga hatching plan to stop fledgling startups from flying away

Mississauga has proven to be a great place for fledgling businesses to get their start, but a new study suggests when those companies become successful they tend to locate elsewhere.

Hamid Alemohammad founded AOMS Technologies with two partners five years ago. The start-up embeds sensors in concrete construction sites to collect and analyze data so engineers can make decisions based on the performance of the concrete.

"Our expertise is in having sensors for very difficult environmentally demanding places," explains Alemohammad. Now his company has grown to 18 employees and has outgrown its space in Mississauga's Research Innovation Commercialization (RIC) Centre.

"The company is growing and really needs to expand and we need to move out," he said. "So it's like the stage of the company is. We graduate. We are now adults."

When the company moved out of the non-profit incubator — which is funded by the University of Toronto-Mississauga (UTM), and the Ontario Ministry of Economic Development, Job Creation and Trade — it relocated to North York.

Alemohammad says it's nothing against Mississauga, but it was a staff decision.

But it's a trend that Mississauga's Economic Development Office noticed and asked the Canadian Urban Institute to investigate.

Researcher Charles Plant says a report presented to Mississauga city council June 26, found that over the past decade, when start ups are ready to go to the next level, they are leaving the city.

And Plant says Toronto and Kitchener-Waterloo are benefiting from Mississauga's loss.

"You have a situation where you've got two large competitors that have been magnets and that has influenced the rate of startups and the rate of scale-ups in particular."

In fact, Mississauga has the third-lowest rate of scaling companies, ahead of only Calgary and Edmonton.

Shirley Speakman is the chair of the Research Innovation Commercialization (RIC) Centre, a successful incubator that helps bring innovative products to market. It currently has a portfolio of about 500 companies at different stages of development.

Speakman says what Mississauga needs is a place for companies to go when they need to get to the next level.

"Does it surprise you that Mississauga is low on that ranking. No, I don't think it surprises me," said Speakman, adding the city needs space for companies that are ready to leave the nest.

"As it goes from your mum and dad's garage, through that scale  ... you need to move out of the garage and start the next stage of your company's life."

Bonnie Brown, Mississauga's director of economic development, says the city needs an innovation hub — a large place where many people can get together, where entrepreneurs can meet with their peers, encourage each other and learn from one another.

"This idea of mentorship for business-to-business connections, intersections and collisions," she said 

Brown added the city is home to many large multinationals, but what about the companies that are in the process of growing out of the startup phase?

"Mississauga has a strong business community. Could some of those larger corporations work with those growing companies and so providing that space and opportunity?" she asked.

Aleksandra Allen, the project leader for the city's Economic Development Office, is looking at the business case for building such an innovation hub.

"One of the key recommendations from the [Canadian Urban Institute] was to investigate and figure out a way to build up that innovation space," Allen said.

She says Mississauga is ideally located in the middle of the Toronto-Kitchener-Waterloo corridor. The only missing piece of the puzzle is a place for businesses to go to transition from startup to scale-up.

"Our role right now is to take leadership and identify how that business innovation space could look like through a solid business plan."