Enterprise zones in the UK are typically based in depressed urban areas hit by the decline of traditional manufacturing industries, places that most people aspire to finally escape from, one day. However, there is a different model that can potentially deliver even better long-term results.
The city of Kelowna is less than an hour’s flight east of Vancouver in the Central Okanagan region of Canada, an area of outstanding natural beauty next to a 72-mile lake surrounded by snow-capped mountains. Its fruit-growing industries were declining, so local entrepreneurs shrewdly switched their crops and the area now boasts several award-winning wineries.
The region might have remained a tourist and retirement destination but for local entrepreneurs Lance Priebe and Lane Merrifield who had the idea for Club Penguin, an on-line social network for children. Riding the first wave of Internet adoption, they soon had 3.9M users before being purchased by the Disney Corporation, who still maintain a 350-strong operation in Kelowna.
Once the city’s credentials as a new media hub had been established, the Central Okanagan Economic Development Commission resolved to attract more hi-tech businesses. Since 1998, Robert Fine has been Executive Director, which involves constant local networking, the promotion of the area internationally and the essential ability to encourage funding and tax breaks from local and national politicians.
The result is a region that punches considerably above its weight. Entrepreneurs have low-cost access to Accelerate Okanagan, a purpose-built incubator that provides membership, networking and serviced office space, as well as practical training, consultancy and market research services.
Unlike the incubators that emerged in London during the dot-com boom, Accelerate Okanagan is not run by venture capitalists focused on generating deal-flow geared for a quick and lucrative exit. This incubator works more like a social enterprise, providing long-term mentor-focused nurturing on a not-for-profit basis.
Government funding meets the basic running costs of Accelerate Okanagan, but the incubator also has commercial targets, with profits recycled to improve and enhance the various programmes.
Ambitious entrepreneurs always crave worldwide fame and fortune, so Fine and successful technology entrepreneur Steve Wandler launched the Metabridge Conference, now in its third year. This attracted venture capitalists and successful entrepreneurs who made their fortunes in successful hi-tech start-ups such as Google, Facebook and Electronic Arts.
These were the conference VIPs who delivered keynotes, appeared on panel sessions and acted as judges for the pitching competition. The conference numbers were deliberately kept small, with 14 companies pitching to twenty VIPs. This enabled all the aspiring entrepreneurs to have quality networking time with world-class business mentors in the relaxed atmosphere of a golf course or boat trip.
This year, two companies won a two-day facilitated tour of influential companies in Silicon Valley. These were Connection Point, whose product FundRazr is a next-generation fund-raising application, and Xomo, who develop mobile applications for live events, including the 2010 Winter Olympics and the Isle of Wight Festival.
As the winners were chosen by some of the most astute technical and funding experts in North America, their future looks bright as well as for the place where they got their big break.
As the Metabridge entrepreneurs and investors grow their companies, I am sure they will look to Central Okanagan not only for good staff, but also as somewhere they can enjoy the more enhanced and relaxed quality of life they will have earned after their own successful exits.
Perhaps this is a better definition of the perfect enterprise zone; not an industrial urban sprawl that most people aspire to escape from, but instead an attractive location to relocate to, once you have achieved success.
The Central Okanagan Economic Development Commission can be found at http://www.investkelowna.com
Originally published in The Financial Times. Copyright ©Mike Southon 2011. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.