Christie Digital Systems is one of many companies in the Region of Waterloo boasting incredible growth. The company, employing 300 workers in Kitchener, celebrated the installation of its 1,000th digital cinema projector this past June.

With more studios releasing movies in pixels rather than on film (George Lucas's Star Wars: The Phantom Menace in 1999 was the first full-length feature to be projected digitally), Gerry Remers, president and COO of Christie Digital Systems, already feels that his milestone is old hat. The company expects to install its 2,000th system by this December.

"We started last year running at 25 installations per month," Remers says. "By October 2005, we were up to 100. By this October, we'll be up to 300."

Despite this growth, Christie Digital is not a new company. Although its digital projection operations were established in 1999, the company's roots in Waterloo region can be traced to the foundation of Electrohome in 1907. Electrohome was one of Canada's largest manufacturers of television sets between 1949 and 1984.

Photo courtesy of Christie Digital Systems
Star Wars: The Phantom Menace is on the screen at the Galaxy Cinema in Waterloo, thanks to one of the projectors from Christie Digital Systems.

"I joined Electrohome's projection systems division in 1994," says Remers. "The division, which Electrohome founded in 1979, performed the first data projection in the world. In 1999, Christie Inc. in California purchased Electrohome.

"At the time, Christie was a film projection manufacturer," he adds. "We were a good combination. Christie was looking to establish a digital cinema arm, and we were looking for a strong parent company with deep pockets. We've grown in leaps and bounds since."

Christie Digital Systems expects sales to exceed $350 million US this year.

This story of new companies and industries emerging from old is told often in the Waterloo region, where diversity, innovation and entrepreneurship are keys to the area's success.

The Region of Waterloo comprises three cities - Kitchener, Waterloo and Cambridge - which have grown together at the edge of the Greater Toronto Area into an urban area of half a million people. The City of Waterloo is already associated with a high-tech boom, headquarters for such companies as Research in Motion and Open Text.

Waterloo's tech sector is complemented by a large manufacturing sector in Kitchener and Cambridge, with companies such as Toyota operating large plants in the area.

The convergence of established industries with emerging technologies is the secret of the area's success, says John Tennant, CEO of Canada Tech Triangle Inc. (CTT Inc.), a not-for-profit public-private partnership dedicated to marketing the region to the world.

"Our economy has a history of reinventing itself," says Tennant. "At one time, we were Canada's button capital, at other times Canada's furniture capital. Cambridge was called the Manchester of Canada because of the concentration of textile industries. As industries come into more challenging times, we've been able to move onto the next leading edge."

In 2004, Waterloo region had a gross domestic product as high as Newfoundland and exported more goods than five provinces in Canada. The area's unemployment rate stands at 4.9 per cent, well below the national average and not far behind that of oil-rich Calgary (3.6 per cent).

"The community attracts a strong workforce thanks to its quality of life," says Remers. "Then there is our proximity to Highway 401, the American market and Pearson International Airport.

"The quality of the workforce extends to our suppliers," he adds. "The local base is very skilled, built up by the auto industry. We have excellent machine shops, tool and die makers and board manufacturers which compete well with global vendors. The projection systems Christie offers require a fast turnaround of prototypes, so the proximity to good local suppliers is an advantage."

High tech leads the area's growth, now comprising 40 per cent of its economic activity.

The manufacturing sector remains strong, however, with more than 10,000 workers employed in automotive-related industries, and another 10,000 employed in companies involved in automation, tool and die manufacturing, logistics and transportation.

Ortwin Stieber founded Ontario Drive & Gear Ltd. (ODG) in 1962 as a subsidiary of his gear and transmission manufacturing company.

Today, under Ortwin's son, Joerg, ODG is a world leader in amphibious vehicle technology, employing 162 staff in a large facility in New Hamburg, at the western edge of Waterloo region.

"We are known for our flagship product: The 6x6 or 8x8 Argo, first built in 1967," says Stieber. "It started when we produced a gearbox for an amphibious vehicle called the Amphicat for a company that went out of business, so we decided to build amphibious vehicles ourselves. We've since built 30,000 units, more than any other company in the world.

"My father came to Canada from Germany because of the possibility of another war in Europe," he adds. "He selected Kitchener because of a visit by a delegation from the KW area, led by Mr. Beingessner Sr., father of Jim Beingessner, a past chair of CTT Inc. The area's German heritage was a factor in his decision.

"I took over the helm of ODG in 1985," says Stieber. "We revived the gear business to reduce our dependence on the Argo, and we implemented a program of continuous improvement, including upgrading our plant with state-of-the-art, computer-controlled production equipment."

CTT Inc.'s Tennant says: "The future success of manufacturing will depend on the manufacturers' ability to adopt the latest technologies. The latest transformation has been driven by IT. What needs to follow is the ability to work with advanced electronics, communications, biotechnology and even nanotechnology. What's reassuring is that our post-secondary institutions are paying close attention to these areas, fuelling start-up companies which are developing these technologies."

Glenn Turchan, executive vice-president of Conestoga Rovers and Associates (CRA), agrees that the area's post-secondary institutions, the University of Waterloo (UW), Wilfrid Laurier University and Conestoga College, are key to the area's culture of innovation.

Conestoga Rovers, an environmental engineering firm headquartered and employing nearly 500 people in the City of Waterloo, and more than 2,300 internationally, was founded in 1976 by Don Haycock and Frank Rovers, engineering graduates from the U of Waterloo.

They merged their consulting firms to take on the job of cleaning up Love Canal. The skills CRA demonstrated led to work dealing with many other environmentally contaminated sites across the United States and Canada, including the Sydney Tar Ponds.

"We get people who come to UW from outside the region, who come work for us and settle here," says Turchan. "We are heavily allied with UW's co-op program and we routinely employ between 10 and 25 co-op students at any given time. When they graduate, it provides us with a revolving group to talk to about career opportunities.

"You could say that CRA is a spinoff from the University of Waterloo," he adds. "Our founders are UW graduates, as are almost half of our 46 current shareholders. We have a couple hundred UW alumni working for us.

"In our area, engineering and environmental sciences, especially hydrogeology, the University of Waterloo is a world-class institution. The talent the university produces makes our work possible."

Producing skilled workers to operate the manufacturing and high-tech companies that locate here is one thing.

Maintaining that growth is another challenge.

"We need to bring in skilled immigrants who are a match for our needs," says Tennant. "Fortunately, we've long had a reputation of being an area with good jobs, and our ability to attract immigrants will be helped by the fact that we already have a significant immigrant component to our population - 22 per cent - as high as any area our size in Canada."

Joerg Stieber says: "The challenge for the region will be to provide the infrastructure to support the area's growth. This includes maintaining a stable electrical supply. In our case, we have to deal with competition from China, the high Canadian dollar and shortages of skilled labour."

Tennant says: "Projections from the province suggest that we'll grow to 730,000 by 2031. Supporting this will require improved public transit, brownfield redevelopment and downtown revitalization, as well as good management of our water, sewage and other essential services. We're fortunate to have a growth-management strategy that's aligned with the province's strategy. This will help co-ordinate investments from the local and provincial governments."

The regional chairman of Waterloo, Ken Seiling, agrees. "We just finished creating a research and technology park, which the region and the city and UW took the lead on. We built an accelerator centre there, to support the creation of new startup companies. We're also building a medical school in downtown Kitchener to address the shortage of doctors. We don't wait for somebody else to do it; we do it ourselves."

"We need to deliver a livable environment that appeals to knowledge workers," says Tennant. "This means a strong sense of community, a thriving arts and culture scene, recreational opportunities, wi-fi hotspots and more.

"The fact the City of Waterloo was named one of the world's seven most intelligent communities is an important part of that strategy. Attracting the world's best minds means offering them a sophisticated and lively environment in which they can live. These are the challenges the region is undertaking."

(James Bow can be reached at bow@businessedge.ca)