Timothy Fung is holding a hairdryer-like contraption. It blasts light from one end, but you can’t feel the heat.

A small audience gathered around him looks at it oddly.

"Are you familiar with light therapy?" he asks. "A little bit? Ok, so your body is hurting because you have injured or damaged cells, so say carpel tunnel or a shoulder injury."

Fung goes onto explain the device. Officially called the Genesis Pain Relief Light, it projects a high-intensity near-infrared light.

Users hold the light to an area where they experience pain and after a series of therapy treatments, they’ll feel relief, Fung says.

The vice-president of Genesis Health Light, a Hamilton-based small business was speaking to prospective customers at Toronto’s Total Health Show earlier this year.

Genesis had its origins in a conversation between a local chiropractor, Dr. Paul Ziemer, and one of his patients, an engineer, during a visit. Ziemer made a passing comment that he wished his patients had a device to continue treatments at home.

It was a serendipitous encounter. That engineer soon introduced Ziemer to Fung and his colleague, Han Wu.

Genesis appears to have chosen Hamilton wisely. Health is the area’s fastest growing sectors. In the past decade alone, there’s been a 47 per cent increase in the health sector’s workforce, according to the Workforce Planning Hamilton’s 2012 report on the labour market.

The report also states that thousands of new workers will be needed in the health field in coming years.

‘Best of both worlds’

'It's got a lot of resources in terms of people and expertise.'—Timothy Fung 

Fung says the small company determined that Hamilton was the prime location for conducting research.

"If you take a look at both white collar jobs and blue collar jobs as well as income levels and race, Hamilton has a good spread of everything," said Fung, "For our purposes it’s great having Hamilton as our backyard."

Fung grew up in Markham, but has worked in Hamilton since graduating with an MBA from McMaster University, drawn by a city he describes as "increasingly an innovation hub.

"It's got a lot of resources in terms of people and expertise," said Fung.

Geographic location also plays a big part for Fung’s business, since Hamilton is close to both the United States border and Canada’s largest city, Toronto.

"We're actually getting the best of both worlds."

While the number of medium and large businesses have stagnated or fallen in the past three years, small businesses – such as Genesis’ four-person team – are on the rise in the city.

Small businesses with four employees or less have grown by five per cent since 2008.

Stymied by funding

To date, Genesis has sold between more than 400 units in southern Ontario since early 2011 and six local clinics use the device for in-house therapy.

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Genesis Health Light uses light therapy for pain relief. (Julia Chapman/CBC)

The company has applied for approval from the U.S. Food and Drug Administration to sell their product in the States, with the aim of getting a foothold in the global market.

Genesis currently manufactures its products in China to keep costs down, but Fung hopes one day make the product locally.

Despite the resources for startups available in the city, he feels stymied when it comes to finding funds to help expand his business.

Access to capital could be changing. An angel investor group recently set up a regional office that includes Hamilton.

Data released to CBC Hamilton by Thomson Reuters also shows that the life sciences sector increasingly is the driving force for venture capital investment in the city.

In 2011, $10.8 million venture capital was invested in the life sciences sector, according to Thomson Reuters' VCReporter venture capital database. Already in this year's first quarter, $334,000 was invested in the sector.

The amount of venture capital invested in the sector has been rising since 2005 and accounted for the vast majority of investment in recent years.

Fung hopes that his position in Hamilton proves fruitful — and helps him realize his ultimate goal for its Genesis Pain Relief Light device.

"We want every household to have one," Fung said.

Back at the health show, Fung chatted with many customers and discovered that some were from Hamilton, too.

Then, he makes a sale.

This is the second article in a four-part series on innovation in the city of Hamilton.