The purpose of this study is to describe the role of Laurentian University in the development of the Sudbury Mining Cluster. The emphasis is on capacity and commitment. Capacity matters because it is the foundation on which the developing cluster depends. Commitment matters because the future of the depends on the determination and skill of the people who are promoting it. Laurentian is a key corporate player. The success of efforts by the community, three levels of government and the industry depend significantly on how effectively Laurentian promotes the Cluster.

It is no longer necessary to show that a dynamic, export-oriented cluster needs to be associated with high-powered research facilities. It is one of the most clearly established results of two decades of study by researchers around the world. We can take it for granted that if Laurentian fails to develop into the leading Canadian in research and development related to mining then the Mining Supply and Services Cluster in Sudbury will be stunted. There is room to question whether Laurentian's success would be enough to ensure job growth in the region by stimulating the growth of local firms and by attracting new companies from outside of the region. Evidence and theory suggest that Laurentian's success is necessary but not sufficient. The purpose of this report is to assess whether the University is able to play its necessary role.

Capacity can be understood by looking at both the current assets and the history of development. For example, having the best geological analysis labs in the province is clearly a good sign, but it is also important to know if the lab is growing or falling apart. Momentum matters.

Location also matters. It is simply easier to build mining-related research centres where mining is going on than is to build them in cities in which the economy is focussed on other industries. In the language of economics, assessing capacity requires that we assess comparative advantage as well as absolute advantage.

Assessing commitment requires different techniques. There are standard approaches - examining the policy statements and the organizational structure of an organization is the most commonmethod. Sections two and three apply this approach. I

On the capacity side Laurentian comes through with flying colors with one exception - Its engineering program is clearly seriously underdeveloped.

On the commitment side, Laurentian appears extremely weak. Public policy statements show minimal commitment to becoming a leader in mining -related research and education. Structural features - the allocation of administrative resources show even less commitment, and the capacities of the administrative team, while considerable, are not the capacities that one would expect in an university determined to make major progress in scientific and technological areas.

Mining employment nationally is declining as productivity increases, but the demand for inputs of technology, skill and capital is expanding world-wide. By 2001, employment in the major mining firms in Sudbury has fallen from over 27,000 to below 6,000, while MS&S employment rose to more than 8000. Now over 250 MS&S firms are located in an area not much larger than a research park.

A nationally significant industrial cluster is now in place in Sudbury. Of the major sub-sectors of the mining industry in Ontario,

1. Finance,
2. Exploration,
3. Extraction,
4. Smelting,
5. Supply and Services,
6. Education and research and
7. Administration and Policy,

only the Financial sub-sector is not concentrated in Sudbury. Furthermore, for each sub-sector a substantial fraction of the provincial capacity is concentrated in Sudbury.

The most significant fact is that the cluster includes the largest concentrations of most of the sub-sectors in the province and in most cases in the country.

Production in the area has been underway for over a hundred years, and in 2001 there was more exploration in the Basin than in all the rest of Ontario combined. Noting that Ontario produces roughly 30% of Canada’s metals, with a value in 2002 of $3.6 billion provides a sense of the mineral potential of the Sudbury Basin. Many of our geologists speak casually of the next 100 years of nickel production.

The presence of very large mines supported the development of one of the largest smelting and refining operations in the world. The sustained labour demands of mines and smelters gave rise in turn to the largest city in Northern Ontario. The city in turn spawned a university, which naturally tended to develop a specialization in areas related to research – geology, engineering, environmental research and remediation techniques.

The presence of the University, the City, and the mines justified the provincial government’s decision to move the OGS and MNDM to Sudbury. The presence of the OGS has increasingly attracted exploration companies as well as supporting the development of the Earth Sciences program at Laurentian.

The presence of the City and the mines also allowed a supply and service industry to develop. There is anecdotal evidence that the firms in this sector are growing and increasingly able to compete internationally. At a later stage this project will report of the export capacity of the SMEs.

Sudbury is known around the world as a major mining centre. It will remain one of the world’s most productive "camps," the base for significant amounts of exploration, and a major smelting centre.

What we have begun to understand recently is that it is also an important supplier of goods and service to most stages of the mining process. It is the provincial center for disseminating geological information for prospectors and for claim registry. It has companies that conduct exploration and labs that do assays. There are companies that do environmental assessments, handle permitting, drive shafts for mines, and build and install ventilation and pumping equipment. It may not be obvious, but one of the major energy costs for the mining industry is simply pumping air in and water out of the mines. We have companies that develop control equipment, sensor equipment and accounting programs.

The mass of mines and smelters is the anchor, but the growth opportunity lies in the upstream suppliers that grew up to serve them. It is this Mining Supply and Services cluster that has the potential to become an important national export sector. While direct mining employment continues to fall, mining demands more and more inputs of capital equipment, technology and skills. Our most recent count identified over 250 firms within the city limits supplying specialized products and services to the mining industry. The list does not include indirect and non-specialized suppliers. It does not include 60 firms in nearby North Bay, and others in the cities of Timmins and Kirkland Lake that form the northern corners of Ontario’s "metal triangle".

Direct mining employment in mining in Sudbury fell from a peak in 1977 of over 27,000 to just over 5,000 today. Employment in the mining supply and services cluster, on the other hand, has grown to over 8,000. If the growth rate can be sustained for another 10 years, it will add 12,000 jobs to the region and perhaps twice that many to the national economy.

The crossover appears to have happened in 1999, but it was not until 2002-3 that the City of Greater Sudbury laid claim to the title "The Mining Supply and Services Capital of Canada." Laurentian University’s Institute for Northern Ontario Research and Development was instrumental in the rediscovery of Sudbury. The community no longer sees itself as the home of a declining primary industry. Sudbury is now the home of a growing cluster of high-tech industries serving the mining industry bat home and abroad. It is one of four cities in the world competing to become the Mining supply and service supplier for the entire world. The others, if you care to keep track of the competition, are Johannesburg in south Africa, Kaligoorlie in Australia, and Antofogasta in Chile.

The Sudbury MS&S cluster has been developing without systematic government support for thirty years. It’s natural advantages have sustained it despite wavering public policy (and university commitment, we might add) and despite massive ups and downs in the mining industry.

What are those advantages? Location is obviously a key in three different ways. The presence of two major metal producers has created the largest city in Ontario’s North. It has also provided an extremely demanding local market. The work of Michael Porter points to the role of demand conditions in encouraging the development of internationally competitive producers. Sudbury is a tough market.

Location has helped Sudbury in another way. Being on the southern edge of one of the richest and most concentrated mining regions in the world, Sudbury has been well placed to serve as a base for exploration and prospecting. It was not the only city that could have filled this role, but size and the presence of the Ontario Geological Survey appears to have created a self-reinforcing cycle of growth.

Location in a third sense gives Sudbury and advantage over its competitors. Both Canada and Ontario are good location for businesses serving the world mining market. We offer political stability, quality-of-life, highly educated workers and a pool of expertise in mining. Even Toronto, which has a world-class cluster of financial institutions serving the mining industry, provides a locational advantage for Sudbury.

The MS&S cluster in Sudbury has another advantage. Sudbury is a university town. Mining made the city and created the university. Not surprisingly, it tends to exert a steady pull, especially on university researchers in the sciences and engineering. Everything that gives the City an advantage in the supply industries tends to give Laurentian and advantage in research and in education related to mining. Does anyone believe that in the long run major urban universities like Queen’s and Toronto can overcome the locational disadvantages? The southern programs developed when there were no Northern competitors.

Every university is subject to growth pressures from outside of the academic community. Laurentian is no different. Each of the major sectors of the Sudbury economy exerts a "pull" on the University, encouraging the development of related programs and research.

The new medical school provides a vivid example of how an economic sector tends to determine the direction in which the university develops. Employment in the Health care sector is comparable to employment in the mining sector. Health-care services are experiencing growing demand. In its early development, Laurentian developed a nursing program, a midwifery program and recently has created a radiology program. It is on its way to having the first new medical school in Canada in decades. The medical school is being created almost entirely by outside demands and with outside funds. It is fair to say that Laurentian did not and could not have "earned" a medical school through academic excellence in related fields. Even now, with the opening date close to being settled there is only the most limited research base related to medicine and health.

In a similar way, the demands of the education sector are driving the development of an English-language teachers’ college.

There is no doubt that in simple size and investment the mining-related fields have had the largest effect on the University. The Earth sciences program, with the University’s first Phd Program , the number of mining related Centres, and the fact that perhaps half of the research funding attracted by the University in 2001-2002 were in areas related to mining demonstrate the "pull" of the mining sector. The growth of these areas has occurred even in the absence of an active University strategy for promoting them.

Not surprisingly, healthcare and the mining sector are the keystones in Laurentian’s strategy for growth. Because of the tremendous community and political support for the Northern Medical School there is a tendency to give the medical school first billing in discussions of the University’s accomplishments and plans. There appears to be a growing understanding that both in terms of current importance and potential impact, mining-related programs and research outweigh the health sector, however.

The reasons for the growing focus on mining are economic. Employment in most sectors varies from community to community. The relative importance of an industry or sector can be measures using the location quotient, which compares the employment share in each community to the average employment share. Communities that produce goods or services that are exported to other communities – so called "tradable goods and services" will have high location quotients because more of their workers are needed to produce the tradable goods. Location Quotients for public services such as education and healthcare are rarely much different from one because these services are provided at roughly the same level in every community.

For Sudbury the location quotients for education and healthcare are between 1.2 and 1.3. These unusually high values are result of the fact that Sudbury is a regional service centre. The implication is that between 20 and 30% of the education and healthcare services are provided to people outside of the community. These ratios are not surprising for a city that provides services for a large region.

Very little of the healthcare and education services are competitive in the sense that they can be marketed outside of the immediate region. In fact, if we look at the location quotients for the entire region we find that they are less than one. The implication is that while Sudbury is providing services outside of its boundaries, it is actually unable to capture its proportional share of the regional market in either sector.

Given both the competitive weakness of the healthcare sector and the fact that the local market is limited by population sized, the capacity of the healthcare sector and the medical school in particular to generate growth at the university an jobs in the community is necessarily fairly limited.

The location quotient for mining, on the other hand, is between 15 and 18, depending on the method of calculation. Furthermore, this standard location quotient analysis actually underestimates the significance of the mining sector in Sudbury. Part of the educational intensity measured by the location quotient is actually related to the mineral industries. Laurentian has a mining engineering program and a The location quotient for public administration in Sudbury is between 1.3 and 1.4. much of the excess is accounted for by the presentce of the ministry of Northern Developmengt and mines and the Ontario Geological Survey.

Everything produced in the mining sector is traded. Furthermore, the market for mineral products is essentially unbounded from a local point of view.

It is important to place Sudbury in the proper context. Sudbury is the largest city in Canada’s Precambrian Shield. The shield covers 1.9 million square miles, very nearly half of Canada's total area, and produces more than two thirds of Canada’s metals - over $6.6 billion annually, almost all of which is exported. (As a matter of interest, four provinces including Alberta produce $58 billion worth of fuels largely from the ancient seabeds west of the shield.) Mining in Precambrian formations is important in many other regions of the world. Laurentian’s earth sciences program, one of the leading geology departments in North America, specializing in Precambrian geology and mineral production, has as its domain the principle metal producing region of North America.

The Canadian Shield

The mining supply, service, and research cluster, however, was not recognized as a potential national technology cluster until 2002, after researchers at Laurentian began to document the cluster and it’s potential.

Fednor initiated research in 2002 when it became clear that growth of Sudbury firms supplying the mining industry had created the foundation for regional economic development and the potential to contribute significantly to the national and provincial economies if they could capture a larger share of the export market.

An examination of Laurentian’s role in the development of the Sudbury cluster provides considerable insight into the role of universities in the development of both a regional economy and an export oriented cluster. Laurentian contribution has been crucial despite the fact that until recently the university lacked a coherent strategy.

Founded in the 1960’s, Laurentian’s primary role was to provide undergraduate education for a diverse community of relatively low educational attainment. The university has succeeded brilliantly, although its reputation continues to suffer because we continue to take in large numbers of northern students with weak educational attainment.

From the beginning, however, visionaries in the community believed that the university would be the fulcrum for economic development, and indeed it has. Laurentian spawned Science North, a leading Science Education centre and now an exporter of science education programming. Dr. David Pearson, of Laurentian's Earth Sciences Department was a key figure in the development of Science North and will receive the McNeil Prize for the Dissemination of Science later this month in part for his contribution to Science North. The university was the sine qua non for the development of the new Northern Medical School wit campuses in Sudbury and Thunder Bay. These dramatic examples of Laurentian’s impact on the local economy and culture are signs of the growing maturity and capacity of the region.

Mining, however, was the economic base for the region and it continues to be the region’s comparative advantage. From the top floor of the administration building at Laurentian we can see five headshafts out of 14 active mines within Sudbury City limits. I can see the stacks of three major smelters. (We can also see a sea of green, that accounts for the recognition the city has gained internationally for dealing with the environmental problems created by mining and smelting elsewhere.) The Sudbury "Camp" and the geologists call it, is one of the worlds richest mineral deposits.

By the 1970’s Laurentian was on its way to becoming a leader in mining engineering. The recessions that began in the 1970’s led to a collapse in demand for mining engineers. More importantly, the recession came at a time of rapid technologically induced productivity gains in mining. The result was a reduction in the mining workforce in Sudbury from over 27,000 in the mid-1970s to the current levels of just over 6,000. Productivity increases were remarkable: production did not fall, but the community and the university, not to mention the governments of Ontario and Canada, lost confidence in their future in mining-related activities. Economic growth stopped and population began to fall. Sudbury and with it much of Northeastern Ontario was transformed from a high-income, high employment region to a region with all the marks of a depressed economy.

In this period, thinking about economic development shifted to diversification, and away from an emphasis on the region’s comparative advantage. At Laurentian, predominantly a liberal arts university with roots in denominational colleges, Engineering and Geology fell out of favour. There was serious talk about cancelling both programs.

The context is significant. Mining engineering went into decline at Queen’s and the University of Toronto as well during this difficult period. These well established programs with international reputations and alumni throughout government and industry were better able to weather the decline in demand and funding than Laurentian was. It began to look as though the dream of a northern university serving as the centre for research and training for northern industries had come to nothing

In 1987 the provincial government under David Peterson intervened in a crucial way. Peterson moved the offices of the Ontario Geological Survey and much of the Ministry of Northern Development and Mines to Sudbury. In Peterson’s mind, as his speeches of the period show, this was a step in building an internationally competitive mining cluster. Research, education and government services for the mining industry would be concentrated in a single region. It proved one of the most successful public sector regional economic initiatives of the decade.

Success, however, came slowly. In the early 1990s the provincial commitment was cut back by NDP and conservative governments facing recession induced deficits. Laurentian’s 1993 Strategic Plan mentioned mining as a focus. Senate made a tentative commitment to maintaining the faltering engineering program at the end of the 1990s, but with declining enrolments in most programs, discussion focussed as much on whether as on how to maintain the engineering.

An effective collaboration emerged between the OGS, in its new building with a purpose designed state-of-the art analytical laboratory, and the Earth sciences program at Laurentian. By 2002 collaborations had allowed both institutions to emerge as leaders in their fields. The OGS developed world class geological information systems. The Earth Sciences program succeeded in introducing a PhD. Program in Precambrian and mineral geology. The PhD program was the first PhD program in Northern Ontario build on one of the two major Northern Ontario industries.

The Earth Sciences program was only one of several streams that continued to build through the 1990s. A major report on economic development for the region ob served that there was no mining-related research and no mining-related research institutes at Laurentian. The report was not strictly accurate, but was true that the university had limited strength in these areas at the time, and a weak commitment to an active, industry-related role in the region’s economy. By the end of the 1990’s, however, there were eight research institutes or centres with various mining-related missions. There are now twelve.

MERC is an interface with the mining industry – it has a Director (a university faculty member), a part-time secretary who also administrates the current Ontario Mineral Exploration Technology (OMET) program, and is staffed by DES faculty and adjunct professors from the OGS, the mining industry and other universities. For the past 5 years DES and MERC researchers have attracted 0.8-1.0 million dollars each year in research funding.

This list does not include the research at Cambrian college, Norcat , the CanMet labs, which belong to Natural resources Canada, or the facilities of the Ontario Geological Survey. The list does not include CAMIRO, the Canadian Mining Industry Research Organization, and the Deep mining research program. Nor does it include the research dome in the private sector locally. One estimate places the number people engaged in mining-related research in Sudbury at over 700.

Within this list CIMMER was created first, with the goal of encouraging the development of Mining-related research. MIRARCo has developed under Peter Kaiser into our flagship institution, conducting primarily commercial research. It now serves as the umbrella organization for many of the others. INORD, created at the same time as CIMMER to promote social Science Research, has played an important role analyzing and drawing attention to the economic role of the emerging mining cluster. It was INORD research that drew attention to the size of the cluster, and led the community to identify the Mining Supply and Services Sector as the growth engine for the region.

The names of other institutes and centres reveal a heavy emphasis on environmental issues, an area in which Sudbury has become an international leader. A region that was once an environmental disaster area is now a model of environmental remediation, and the recipient of international awards for re-greening and environmental remediation. Laurentian researchers have led much of this work.

The proliferation of institutes and centres at this stage was driven largely by an increased general emphasis on research and by a few visionaries in the trenches. The commitment to the mining sector mentioned in the University’s 1992 Strategic Plan was still permissive, rather than directive. There was as yet almost no genuine institutional commitment.

A landmark for the university and for the cluster occurred when the university hired a leading industry researcher to head the engineering program. Greg Baiden had led INCO drive to develop the next generation of mining technology based on Robotics and Telematics. He was given a mandate to make the engineering program a leader in engineering related to the mining industry. This represented the first major commitment by the university and heralded a major shift in direction.

Another landmark was passed when President Judith Woodworth made Vice President Dr. Harley with the responsibility for the university’s mining initiative. For the first time the mining-related programs and projects at Laurentian had a representative in the management committee and on the Budget committee. Dr d'Entremont will coordinate the development of a comprehensive five-year rolling plan for the university, one that will include all the varied programs and players and which will be linked systematically with the community efforts. His challenge is to take the university to the next level - to make Sudbury and Laurentian the undisputed leader in Canada in the area of mining research and development. An unspecified amount of internal funding has been set aside to support this strategic initiative.