Blossom or rot: Anchor firm collapse, entrepreneurship, and labour market effects

Anchor firms are a crucial element in many regional economies. They act as foundations for economic development by attracting highly skilled workers, help build local supply chains, and act as a foundation for the creation of new spinout firms. When these firms go through a prolonged decline or collapse they cause significant dislocation in the labour force, including unemployment and out-migration. However, their collapse also creates the potential for new spinoff and entrepreneurial activity that takes advantage of the highly skilled labour force and global pipelines that anchor firms have helped to create. Using a unique dataset drawn from social media sources, we examine the impact that the decline of Blackberry (Research in Motion) has had on entrepreneurial activity in the Waterloo region of Canada as well as the region’s overall labour market. Despite Waterloo’s celebrated entrepreneurial ecosystem, we find relatively low levels of entrepreneurial activity by of former Blackberry workers, with many finding work at other major employers in the region or leaving the region entirely. This research shows the promise of using new methodologies employing rich but messy social media sources as research datasets.