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Old 09-17-2008, 07:07 PM   #1
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Default Cluster development - Progress House Incubator

June 1, 2007


Community Futures Stuart Nechako Report on Bio-Energy Cluster Development in the Stuart Nechako Region


Community Futures Stuart Nechako (CFSN) is established as an independent, locally autonomous non profit corporation and is made up of a volunteer Board and member Volunteers, which together with professional staff, become actively engaged in helping the communities of the Stuart Nechako to develop and implement community-based regional economic development strategies. The objective of CFSN is to enhance the overall well being of the community by not only increasing economic activity, but also empowering community members to take an active role in the development of their community to build resident capacity to manage the forces of economic change and labour force adjustment.

CFSN, is a ‘Not for Profit’ corporation directed by a group of citizens concerned about the economy and the development of their community. These people, and the staff employed by CFSN have experience, expertise, and commitment. Their commitment has been established because they care about their community. CFSN is one of many community led groups in the region such as churches, youth organizations, recreational associations and civic societies and committees driven by resident volunteers. The list is long and honorable. However, CFSN has placed itself in an area where others don’t usually go– the economy.

The members of CFSN believe developing a healthy economic future for our communities requires community involvement and that the more people are involved in Community Economic Development, the healthier our economy will be. The overriding principle that frames CFSN activities is our conviction that grassroots entrepreneurship and cultivating local innovation is the preferred method of economic transition/renewal in small rural Canadian communities.

Through interactions with our clients CFSN has determined that the potential for a bio-energy cluster has evolved in the region. This brief discusses:

· Regional cluster development to date;
· Cluster benefits;
· Utilizing the cluster model in industries other than bio-energy;
· Obstacles in financing the clusters in small rural communities.

Bio Energy Cluster Development in the Stuart Nechako Region

The method utilized to date by Community Futures Stuart Nechako has been to link Small and Medium Enterprises (SMEs) where a collaborative approach will provide both parties with an advantage and leverage opportunities presented to maximize their impact on the regional economy as a whole, while respecting the individual’s right to privacy and to take profit from their respective innovation.

Our understanding of a cluster method was used to identify the opportunity to develop a bio-energy group into a cluster to support the Stuart Nechako region’s economic transition. For this summary, a cluster is defined as an ongoing collaborative process between interested parties to maximize the opportunity presented by innovation in a targeted industry. As a result, a cluster development opportunity has been identified for consideration. At least 4 local clients have been identified in the past year that are pursuing the following bio-energy innovations and products:

Client 1 Portable wood pellet production, wood pellet appliance (boilers) development and production and power utility development.

Client 2 Wood gasification development to power turbines.

Client 3 The Fabrication of bio-fueled boiler components and the development of designs for small-scale remote location gasifiers.

Client 4 Development of charcoal production equipment and the development and application of charcoal powered appliances for heating, cooling and locomotion.

Since that time, further potential industry participants have been identified and include established local pellet fuel producers, area metalwork shops, logging harvesters and construction companies. The initiation of a cluster in bio-energy is occurring as a result of the diverse number of entrepreneurs working towards new bio fueled appliances and fuel types.

Potential Community Benefits of Cluster


Establishing an engineering firm in the region is a side benefit of the Bio Energy Industry strategy. With an engineering firm comes the opportunity for the increasing of the productive capacity of the local construction industry through local and timely access to project opportunities. Currently, CFSN is working to help locate an engineering firm to the region that has a contract to design a bio-energy power station to replace a diesel generating station.There is also the potential for more contracts for 4 additional communities.

Construction and Metalwork Trade Development:

While we may consider our local metalwork and construction industries to be somewhat robust for the region, the base of the practice is essentially fabrication. Fabrication is a transitory area of the metal trades. The opportunity to fabricate bio energy appliances provides the opportunity to upgrade our regional skill base by expanding our metal trade activity in the areas of precision machining and fitting.

Bio Fuel Operations Development:

Should the development of fuel boilers and power systems be refined to domestic and international standards, the emergence of training bio fuel system operators would be developed in conjunction with the commercialization of the applicable technology.

Technology and Capacity Development:

There are many capacity development opportunities due to the potential interface between researchers, education and industry. Currently, CFSN is proposing a multi functional technology centre driven by industry to innovate and assist SMEs in the commercialization of the opportunities for innovation represented by bio mass energy production and appliance development. This proposal is called “Progress House”. The purpose of Progress House would be the development of infrastructure for research and education interfaced with industry. CFSN has submitted a proposal to National Research Council of Canada (NRC) to assist in the funding of a feasibility study into the establishment of “Progress House”. Progress House is considered a mid to long-term infrastructure strategy.


The establishment of a trading room or exchange would be a proactive response to provide local contractors and suppliers with access to business and government tenders and procurement requests. This operation would be similar in operation to a “Plan Room” such as operated by the Prince George Construction Association.

Leveraging Cluster Development:

In learning how to initiate local cluster development, further opportunities for cluster creation are being identified. For example, CFSN has 2 clients interested in the following:

Client 5 Utilizing unused heat energy from energy production to consider root crop vegetable dehydration as a potential strategy for diversifying the local agriculture industry.

Client 6 Addressing specific needs of developing countries in energy production by designing and manufacturing appliances such as small-scale gasifiers to replace fossil fuels in powering stationary engines, such as irrigation pumps.

Financing Obstacles;

One of the issues not yet addressed in cluster development is access to appropriate financial resources necessary in the development of an industrial cluster of SMEs. Access to adequate patient capital and operating liquidity are ongoing concerns for small business and are considered the primary obstacle for cluster development by our clients. If strategies for economic diversity using the cluster model are to be successful, the investors and financing institutions should be engaged early in the development of the cluster model. This will allow investors and financiers to study and the nuances of clusters and establish effective practices in advance of cluster development.

CFSN will act as a catalyst in establishing favourable conditions to support new clusters using the method evolving from the development of bio-energy in the region.
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