November 25, 1996
(Executive Council)

Operation ONLINE Launched

Operation ONLINE is marking the beginning of the implementation of its action plan to advance Newfoundland and Labrador's knowledge-based economy through an investment of $10 million from the Canada/Newfoundland Agreement on Economic Renewal. The announcement was made today by John Manley, federal Minister of Industry and Minister responsible for the Atlantic Canada Opportunities Agency, and Brian Tobin, Premier of Newfoundland and Labrador.

Operation ONLINE Inc. (Opportunities for Newfoundland and Labrador in the New Economy) is a not-for-profit corporation formed to provide investment and leadership in information technology as an engine of economic renewal. Stemming from a 1995 provincial task force on information technology, Operation ONLINE is a partnership of industry with the federal and provincial governments whose aim is to capture emerging opportunities and enhance the province's position in the sector. Its primary role is to deliver Action Plan projects and to serve as a facilitating and advisory body on information technology in the province.

"The potential for job creation and growth through the information highway is immense. Technology represents one of our greatest competitive advantages in the global, knowledge-based economy," said Manley. "Operation ONLINE is a crucial step towards giving the people in Newfoundland and Labrador the opportunity to benefit from this strategic asset."

Premier Tobin said: "We have reached a milestone in the province's transition from a resource-based economy to a new economy in which we are key players in the modern knowledge-based society. Newfoundland and Labrador's advanced technology firms have developed a solid reputation for excellence in several niche areas including communications technologies and software development for the marine sector as well as networks for education, health, and business. I wish the Board of Directors every success in meeting the challenge of building on the significant technological strengths already resident in the province."

The provincial Minister of Industry, Trade and Technology, Chuck Furey expressed optimism about the results anticipated through Operation ONLINE: "By bringing together private and public leaders, we are advancing the province's competitive position through strategic investment in key areas of the IT sector. Furthermore, this approach will reach beyond the IT industry to help other sectors realize new opportunities and create new ways of doing business in world markets."

Mr. Sam Walters, Chairperson of Operation ONLINE Inc., responded to the good news saying: "With the energy and expertise of our newly-formed board of directors and the support of both levels of government, Operation ONLINE is now fully established for implementing a range of projects to fulfill its mandate. This occasion marks the start of an exciting period in the province's economy as we work with partners to meet the challenge of positioning Newfoundland at the forefront of the highly-competitive information technology sector."

The Canada/Newfoundland Agreement on Economic Renewal is a $100 million, five-year, federal-provincial program designed to generate long-term economic benefits for the province primarily in the growth areas of advanced technology, tourism and aquaculture.

• Contact:

  Cathy Dornan
  Office of the Premier
  (709) 729-3960

  Daryl Genge
  Operation ONLINE
  (709) 729-6000

  Ellen Alcock
  Canada/Newfoundland Agreement on Economic Renewal
  (709) 772-5116

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BACKGROUNDER

Operation ONLINE (Opportunities for Newfoundland and Labrador in the New Economy) is the province of Newfoundland and Labrador's Information Technology (IT) development strategy.

This strategy reflects a recognition by government and industry that IT is important as a growth sector in its own right, and as an enabler for economic growth in other sectors.

In 1995, the provincial and federal governments formed a joint industry/government Task Force and Secretariat comprising senior officials representing the information technology sector, the health and education sectors, along with government and industry. They took on as their primary role the preparation of an Action Plan for the strategy, entitled "Investment, Innovation and Action: ONLINE for our Future." The objective of the Action Plan is to achieve growth in the IT sector while capitalizing on the enabling effect of IT in other sectors of the economy. Its success will be realized through investment in the Information Technology industry, commitment to the development of new skills and capabilities, and the formation of strategic partnerships with business and markets to develop new opportunities.

Elements of the Action Plan
"Investment, Innovation and Action:
ONLINE for our Future"

Development and growth in the knowledge-based economy means being able to build a continually competitive workforce, provide the products and services that are in demand, and develop global markets. The Action Plan provides the foundation for IT sector development through and addresses the most pertinent issues in the following areas:

Building our Human Resources
Meeting the requirement for IT skills and capabilities in our human resources and how the education and training system should respond to the needs of industry and individuals;

Networking 2000
The development and deployment of advances in networking and communications infrastructure to support new forms of research, education, and the creation of new business opportunities;

Building the IT Industry
Creating a better environment for small- and medium-sized IT enterprises to thrive by: supporting IT management development; promoting supplier development; facilitating partnering and alliance building; and providing a flexible tax and regulatory regime;

Applications Development and Adoption
Expanding the development and commercialization of marketable IT products and services that build on our existing strengths in communications, networking, and applications development for lucrative niche markets such as health care, education, and the Information Seaway;

Communication with our Stakeholders and Markets
Ensure communication among the stakeholders and with the potential customers of our IT industry so that the image and positioning of the industry and the province are favourable and conducive to increased revenue generation; and,

Government as a Model User
As an example to industry and as a tool for the development of the IT industry, governments must take a lead role in using IT as a tool for economic renewal;

Leadership and Investment
Support for implementation of the Action Plan will be provided through the Canada/Newfoundland Agreement on Economic Renewal. The Task Force and Secretariat has been restructured as an not-for-profit corporation (Operation ONLINE Inc.) with a private sector led Board of Directors and a public-private management team. Its primary role will be to act as an agent for the federal and provincial governments in the delivery of Action Plan projects, and to become a facilitating and advisory body on information and advanced technology implementation in the province.

Information Technology is a dynamic and progressive sector that has enjoyed rapid growth in recent years - a trend which is expected to continue for the foreseeable future. Newfoundland and Labrador can benefit from this growth by building on its indigenous strengths, overcoming obstacles, and seizing new opportunities.

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BACKGROUNDER
Canada/Newfoundland Agreement on Economic Renewal

• Early in 1994, the Government of Canada and the Government of Newfoundland and Labrador each agreed to establish a committee of ministers to deal with issues related to the Newfoundland economy. A federal task force was established and the subsequent work of the joint committees comprises the initiatives of this Agreement on Economic Renewal.
• On June 16, 1995, the Government of Canada and the Government of Newfoundland and Labrador announced the general elements of the Agreement on Economic Renewal in response to the collapse of the groundfish industry in Newfoundland and Labrador. The Agreement targets specific sectors outside the traditional fishery which offer the most potential for sustainable development and job growth over the medium to long-term.
• On February 8, 1996, details of the Agreement were announced by both levels of government. The agreement includes a wide range of projects primarily in three sectors: aquaculture, tourism, and advanced technology. The goal of the Agreement is to provide investment and development. It will build a framework to encourage private sector investment and will improve the province's competitiveness by investing in growth industries.
• The $100 million Agreement is cost-shared by the federal and provincial governments. The federal government's share is $80 million and the province's share, $20 million. Of the $100 million program, $20 million is allocated to help the aquaculture industry reach its full potential. Approximately $23 million will fund tourism-related projects. $36 million will be invested in developing the advanced technology sector. $21 million will be provided to fund other economic development initiatives.
• The Agreement is implemented and managed jointly by both governments with the Atlantic Canada Opportunities Agency (ACOA) taking the lead for the federal government and Executive Council representing the provincial government.

ADVANCED TECHNOLOGY COMPONENT

Newfoundland and Labrador's advanced technology firms have built solid reputations for excellence in several niche areas: ice and cold ocean engineering, marine communications, ocean environmental and remote sensing technologies. Information technology (IT) is the fastest growing industry in the industrialized world, employing about half of Canada's labour force. Potential exists to build on Newfoundland and Labrador's base of information technology firms. To accomplish this, the Agreement will invest $36.29 million in advanced technology-related initiatives.

• Post-secondary Distance Education and New Media Learning: Newfoundland and Labrador is a recognized leader in the development of new applications in distance education. This component will strengthen that leadership by helping to integrate and upgrade telecommunications networks, promoting the concept of Open Learning, and helping with a variety of efforts to build competitive strength in the new media learning sector.
• Research Infrastructure Fund: This fund will help Memorial University to compete for national and international research and development funds.
• Innovations Partnering Service: The province's oceans and technology-based companies are world-leaders in certain areas, but have had difficulty gaining access to markets. This service will help local technology-based companies form links with national and international companies, public agencies and research institutions, and venture capital sources.
• Ocean Technology Contract Fund: This fund will identify and support projects which marry scientific excellence in Newfoundland and Labrador with emerging markets.
• Technology Cluster Facility: This component will establish a facility at Memorial University to support science and technology- based firms that are starting up. Specific sectors will be biotechnology, medical and pharmaceuticals, computers and technologies. The Facility will help local entrepreneurs and inventors, spin-off companies from Memorial, and alliances between local business people and Memorial scientists.
• Management Best Practices Library: This is an electronic library to assemble self-help and self-diagnostic tools for owners of small and medium-sized enterprises. This will help them to develop their skills in marketing, planning and management.
• Risk Management Model for Knowledge-Based Industries: Knowledge- based companies frequently have difficulty gaining access to investment capital because their chief asset - knowledge - is difficult to assess as collateral. This model, once developed, will make it easier for potential lenders or investors to decide the credit-worthiness of a company.
• Newfoundland Business Networks: This component will help create up to 20 networks of Newfoundland and Labrador businesses. This will help them to exploit commercial opportunities which would be beyond the capacity of the individual firms.
• Mentorship Service: This component will create a mentorship program for entrepreneurs in information technology. Clients would be referred to this service through various government departments and agencies. The mentor would help the entrepreneur by giving hands-on technological, financial or marketing advice, passing on "tricks of the trade", and acting as a sounding board for the entrepreneur or business person.
• Support for Advanced Technology and Implementing IT Task Force Recommendations: The federal and provincial governments supported the development of a strategy called Operation ONLINE (Opportunities for Newfoundland and Labrador in the New Economy). This component will help implement various recommendations of this strategy, such as building the human resources needed for the IT sector and assisting with access to financing for IT companies.
• Marine Communications Strategic Intelligence and Partnering Service: This province's marine communications, navigation and surveillance companies are world leaders in niche technology areas, but their small size has made it difficult for them to keep abreast of rapidly evolving global trends and to make market penetration. This service will enable these firms to gain information on market trends, growth opportunities, possible alliances and market penetration strategies.