Ooka Island is a rapidly growing learn-to-read software startup with roots planted in the red soil of Prince Edward Island.

But when the Charlottetown-based company planned to get serious about bringing its product to market, it needed to expand to an urban centre close to venture capitalists, a pool of skilled labour and a broader customer base.

“Once you get to the product validation stage it is hard to be on an island far away,” said Kelly Shaw, CEO of Ooka Island. “We needed an office in Toronto so we had access to a much bigger market and a much bigger network.”

Ooka Island moved into a co-sharing space at Toronto’s MaRS Discovery District nearly two years ago. Its neighbours include other startups, advisors and investors and tech giants such as Facebook, Etsy and Airbnb.

“It’s like planned serendipity — it’s like these introductions and moments of connections happen and sometimes they’re unexpected and sometimes they’re planned,” Shaw said.

Once upon a time, the need for such an ecosystem might have required a move south to Silicon Valley.

But now the stretch of Highway 401 that connects Toronto with Kitchener-Waterloo has many hallmarks similar to that other famous tech corridor along California’s Highway 101.

The success of the tech cluster in Canada’s most densely populated area has inspired cities and towns – as nearby as Stratford and Hamilton to as far as St. John’s to Victoria – to try and emulate the formula by creating tech incubators and accelerators, helped by millions in federal government funding.

But we can’t all be Silicon Valley North.

California’s famous tech region is successful because it connects startups, venture capitalists, late-stage companies’ talent and tech giants, said Alex Kolicich, a 30-year-old venture capitalist and partner at 8VC who moved to the Valley after graduating from the University of Waterloo.

Lately, he’s been on the hunt for more Toronto-Waterloo startups. He sees the region retaining talent that would once have relocated to the Bay Area.

“The Toronto-Waterloo corridor seems to have a lot of the ingredients you’d want in a tech centre,” he said, adding that Canada has less capacity for multiple tech hubs than the U.S., so it makes sense to focus on building just a few.

“The game is to have that concentration and density of talent to create that number one player, so you want to be in a serious tech ecosystem,” he said. “It’s very difficult to do that without concentrating.”

The Canadian government wants to spark a transition from resources toward resourcefulness and is embarking on an “innovation agenda.”

Details are sparse, though it did pledge in the March budget to invest up to $800 million over four years to “strengthen innovation networks and clusters” across the country. The incubators and accelerators will be tailored to the region — clean tech in Montreal and Vancouver, or agriculture in Alberta.

“The government believes that Canada needs to focus on areas where we have the potential to be, or are already known as, hotbeds of innovation,” said a spokesperson for the department of Innovation, Science and Economic Development.

“The goal is to make significant, targeted investments in these areas so that Canada’s clusters can attract the ideas, talent and capital necessary for success.”

However, Canada’s problem is not one of a lack of startups — the bigger challenge is growing those early-stage companies into sustainable companies.

The federal government needs to be very specific about its strategy if it wants to be more competitive globally. Canada ranks 15 on the Global Innovation Index but should be much higher, said Dan Breznitz, chair of innovation studies at the Munk School of Global Affairs.

Loading... Loading... Loading... Loading... Loading... Loading...

Canada has already seen rapid growth in the number of incubators – which provide low rent offices and mentorship to companies for the long-term – and accelerators – which make an investment in a startup in exchange for an equity position and help founders grow for a set period of time.

But Breznitz is worried there is no concrete end-goal in this innovation agenda. And without one, he says, “we’re left to focus on the hot trends of the day,” throwing money into incubators and accelerators.

There is no sense creating multiple accelerators, he said.

“Let’s assume you’re in Labrador and the incubators actually manage to create eight companies,” he said. “Is there the infrastructure for those companies to actually grow in Labrador? Because if not they will have to move.”

Dividing $800 million by dozens of innovation centres is a peanut butter approach, spreading the cash spread too thin, said Salim Teja, executive vice president of ventures at MaRS.

“We need to place some bets on industries, technologies and regions where we can win in the world,” he said.

“I think that these companies really start to accelerate when you put them into an environment where they can connect to customers, capital and talent and all of that exists within one ecosystem.”

Ron Piovesan is a technology business development executive who has been in Silicon Valley since 2001. He attended a reception in April hosted by Toronto Mayor John Tory, along with the mayors of Kitchener, Waterloo and Cambridge.

He’s seeing a lot of this “innovation tourism,” in which officials from various governments come to the Valley to learn about the ecosystem and also make the pitch to move back home.

But he doesn’t believe any Canadian city should try to be the next Silicon Valley.

Instead, he’d like to see the Canadian government focus on regional strengths and developing high-tech solutions in specific areas — similar to Germany’s strategy, which has seen it become a high-tech manufacturing hub — an historic area of strength for the country.

“I think the question for anyone whether they’re in Toronto, St. John’s, Calgary — or anywhere else for that matter — is if we want to build tech companies here what are our strengths and how do we build that up? Rather than trying to take whatever formula worked in Silicon Valley and bring it over here.”

Heather Galt, the vice-president of talent initiatives and executive in residence at Communitech in Kitchener has no desire for the region to be the Silicon Valley North.

“In the same way that companies compete on what makes them different, we want to do the same thing. We want to compete globally on the things that make us different and make us unique.”