Local IDEAs

Local Indicator Database for Economic Analysis

Research on the impact of Nortel’s demise on the Ottawa-Gatineau ICT cluster

On August 21, 2015 along with my colleague from University College Dublin, Dieter Kogler, I presented preliminary research on the impact of Nortel’s demise on the Ottawa-Gatineau ICT cluster at the 4th Global Conference in Economic Geography at the University of Oxford, UK. We are specifically looking at the resiliency of the cluster via the career paths of former Nortel inventors. Below is the abstract and link to the PowerPoint slides.

 

Title:

Anchors Away! The evolution of an ICT cluster after the sinking of its flagship company

 

Abstract:

In early 2009 Nortel Networks filed for bankruptcy. Less than a decade earlier it had been at the pinnacle of the telecommunications industry and accounted for over a third of the total valuation of the Toronto Stock Exchange. While it was headquartered in the Greater Toronto Area its main presence in Canada was in the national capital region of Ottawa-Gatineau which had developed a strong ICT cluster. The failure of Nortel has been blamed mainly on financial issues relating to ill-advised mergers and acquisitions along with highly suspect accounting practises. Even with these fatal problems Nortel was a highly innovative company that generated a great deal of highly valuable intellectual property. In this paper we examine the impact of Nortel on the inventive capacity of the Ottawa-Gatineau ICT cluster by tracking patent levels between 1975 and 2012. We find that the collapse of Nortel had a significant impact on the patenting rates of the region, but that it ultimately recovered within five years. We track recent inventors who previously patented with Nortel to their new firms and locations in order to better understand the sources of this resiliency.

 

Slides: GCEG Presentation (Kogler Spencer) 21AUG2015

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