Innovation

A SMALL PLACE TO THINK BIG

Ideas and deep pockets are transforming Waterloo

PAUL WELLS April 18 2005
Innovation

A SMALL PLACE TO THINK BIG

Ideas and deep pockets are transforming Waterloo

PAUL WELLS April 18 2005

A SMALL PLACE TO THINK BIG

Innovation

PAUL WELLS

Ideas and deep pockets are transforming Waterloo

IN JANUARY 2001, Jim Balsillie, the chairman and CEO of Research In Motion, convened an odd collection of academics, diplomats and assorted other thinkers at his cottage on Ontario’s Georgian Bay. John English, a historian and former Liberal MP, was there. So was Paul Heinbecker, then Canada’s ambassador to the United Nations, David Johnston, the president of the University of Waterloo, Margaret Wente, the Globe and Mail columnist, and several others.

Balsillie didn’t make his guests wait long to hear what was on his mind. “He said, ‘We’re

making a stupid amount of money and we want to do something constructive with it,’ ” Heinbecker recalled.

“Stupid” was about the right word for it. In 1999, Waterloo, Ont.-based RIM had introduced the BlackBerry wireless email device. The little black boxes had already become required hardware in various niche markets in business, media and politics. Even the bursting of the tech market bubble in 2000 didn’t stop several RIM executives, including Balsillie and his partner, Mike Lazaridis, from becoming very rich indeed.

But almost as soon as they started making serious money, RIM principals began giving it away. They have shown as much imagination in their philanthropy as in their entrepreneurship. The results are beginning to transform Waterloo, a quiet little city that used to be indistinguishable from 20 other quiet Ontario cities.

Balsillie’s Georgian Bay cottage conference gave rise to the Centre for International Governance Innovation, an audacious international-politics think tank in Waterloo. Balsillie put $20 million of his own money into the project. Lazaridis added $10 million. Mike Barnstijn, another RIM principal, and his wife, Louise MacCallum, later chipped in more than $3 million. CIGI styles itself as a key meeting place for serious thinking about the future of global governance. Last week, it played host to a major conference on United Nations re-

form barely two weeks after UN SecretaryGeneral Kofi Annan released his report on the subject.

But this would be just another heartwarming tale of philanthropy if CIGI was the RIM principals’ only extramural project. In fact, it’s not even the biggest. Across the street from CIGI’s opulent headquarters in a converted Seagram warehouse is Mike Lazaridis’s own pet project: the sleek, cleanlined new home of the Perimeter Institute for Theoretical Physics.

If CIGI is about the future of the world, Perimeter is about the future of everything. It has already become a magnet for dozens of mathematicians and physicists from around the globe. They settle in for a few weeks or several years at Perimeter’s stunning new building, designed by the Montreal architects Saucier + Perrotte. The researchers are fed plenty of espresso and surrounded with natural light, comfortable chairs, crates of chalk and vast expanses of blackboard. They are given no specific project to accomplish or gadget to design. Instead, Perimeter researchers are free to ponder “foundational questions”: the deepest secrets of time, space and matter.

For this, Lazaridis donated $100 million of his RIM profits. Balsillie and yet another RIM principal, Doug Fregin, added $10 million each. Why? Because as an engineering student in the early 1980s at the University of Waterloo, Lazaridis discovered that the

courses that excited him most were the ones that dealt with the biggest, most abstract questions in science. Quantum physics. The nature of black holes. String theory.

The closer you look at the way the universe works, the more you find phenomena that are “almost nonsensical,” Lazaridis says. “But that nonsensical nature is specifically why computers work. Lasers work. All these amazing technologies work because the quantum world is so bizarre. But it has rules we can use to produce effects.”

So, as an undergrad, Lazaridis told himself it would be good to have a place where

the brightest minds could pursue the pure research that historically has driven technological advances. Two decades later, he decided that place would be in Waterloo.

Why? “One of the great things about philanthropy is that, you know, you can change the world one community at a time,” he says. “Pick your community, if it’s got all the ingredients that make sense to you. And this is an amazing community. We’ve got less than 100,000 people and we’ve got two universities and a community college. And not just any universities: we have, like, the top university in Canada. It’s the first and most

successful co-op school in Canada. Computer engineering. Computer science. The largest math faculty in Canada.”

In three and a half years of operation, Perimeter has built a formidable reputation in international physics. “The Perimeter Institute is viewed worldwide as a potentially leading place if its development continues the way it does,” says Anton Zeilinger, a leading physicist at the University of Vienna who delivered a public lecture in Waterloo last month. “Actually, considering the short time of its existence and the fact that it is still expanding, I would rank it

already now among the world’s top places in theoretical physics.”

Sooner or later, all this philanthropy starts to become contagious. Balsillie and Lazaridis each contributed money to the other’s pet project. Lazaridis donated more than $33 million to the University of Waterloo’s Institute for Quantum Computing, which seeks to apply theoretical physics to a new generation of computers whose speed and compactness would be unprecedented.

Over at the new Waterloo Regional Children’s Museum, Barnstijn and his wife, a former RIM employee, contributed $5 million

to lead a $ 17-million fundraising drive. The couple have given $12 million to the Kitchener and Waterloo Community Foundation to set up the Musagetes Fund, which is contributing to a myriad of smaller arts and culture-related projects around Kitchener and Waterloo.

Of course, the philanthropic impulse extends beyond the RIM alumni. The University of Waterloo is more than 88 per cent of the way to its $260-million fundraising goal. Two years ago, Klaus Woerner, founder of one of the first Waterloo tech firms, Automation Tooling Systems, donated his palatial country house to CIGI, and it now serves as a venue for smaller conferences and to put up international guests in comfort. In the Waterloo area, says John English, CIGI’s executive director, “there always have been people with money in their pockets. It’s tended to stay in their pockets.” Once the RIM principals started spreading the wealth, “there’s been an opening of pockets.”

Why the extraordinary generosity—and why so early in the lives of the RIM principals, who are almost all still in their 40s? “This sounds glib,” Balsillie says, “but it comes to a point where it’s easier to make money than to give it away responsibly. So you have to be active and responsible or you’re just squandering it. And I thought, might as well do something when you have the wherewithal to influence its productive application, rather than dying some day and some great administrator decides everything.”

The new burst of energy only accelerates a broader transformation that is especially striking to English, a historian by trade who served from 1993 to 1997 as MP for Kitchener. (Kitchener and Waterloo are so close they appear to be one city to any visitor. With nearby Cambridge, they are marketing themselves as “Canada’s Technology Triangle.” The longest line in the triangle would be about 45 km.)

“I wrote a history of Kitchener that ended in 1981,” English says. “And I was very pessimistic because the industries were the rubber industry, the meat industry, there was the remnant of a button industry, there was a leather industry that was dying. And there were auto parts things, and people were already saying the auto industry was dying out. And I had to rewrite the history in the late 1990s because, unexpectedly, there was this flowering of new industries,

things like RIM, things like ATS. It just transformed the community.”

Over lunch at last week’s UN conference, a few Canadian participants grumbled privately that the only problem with an organization as ambitious as CIGI is that it’s stuck in a backwater like Waterloo. It’s the kind of talk that annoys Lazaridis and Balsillie mightily. But what is far more impor-

THIS sounds glib,’ says Balsillie, ‘but it comes to a point where it’s easier to make money than to give it away responsibly’

tant is that their rebuttals are so persuasive. “The implied assumption is that we’re obscure,” Balsillie says. “It’s a colossal assumption. We’re no more obscure than most of the other places I’ve had to go. Ever tried to get to Redmond? [Redmond, Wash., is the headquarters of Microsoft, the mightiest of RIM’s rivals.] It’s a pain in the butt. You’ve got to fly there, drive 45 minutes. We’re incredibly central—we’re 45 minutes from Pearson airport.”

Generous donors and good location can take you pretty far. The next step is a dose of vision. Lazaridis appears to have found that, in the unlikely person of Perimeter’s bookish, bearded executive director, Howard

Burton. In 1999, Burton was fresh out of Waterloo with a Ph.D. in theoretical physics and no particular idea about what to do next. He’d landed a job on Wall Street, doing mathematical finance for brokerage firms: very lucrative and exceedingly boring. So he wrote to the CEOs of a handful of firms, asking whether they had a better idea.

Lazaridis called him back. They had “a lively conversation,” Burton recalls, but he still wasn’t sure what role he might play at RIM. “I said, ‘What do you want me to do, if this is a real job?’ And Mike said, T don’t want you to do anything. I just want you to think.’” Six years later, it has become more complex than that. Burton founded Perimeter, contracted the architects for the new building, raided the world’s best faculties for bright young talent, organized an audacious and wildly successful public-outreach program that gives ordinary Waterloo residents regular access to the most exciting new ideas in science. But sometimes, even today, he just thinks.

“There would have been very few people who would have bet on the Bern patent office as a place for the incubation of revolutionary physics in 1904,” Burton says. Yet Bern was where a patent clerk named Albert Einstein did his first great work the next year. “I think we’ve got an off-scale opportunity here,” he says, referring to all of Waterloo. “We’re in a small town. We shouldn’t pretend we’re in anything other than a small town. But we have an opportunity to get— as this hackneyed, clichéd expression goes— a critical mass at a very high level.” ÏÏ]