Delegates call for greater coordination and collaboration to stimulate business innovation

RE$EARCH MONEY Atlantic Conference

Partnerships, regional coordination and a greater focus on global markets were just a handful of themes that emerged from RE$EARCH MONEY’s first Atlantic Canada conference earlier this month. The one-day event in Moncton NB drew more than 125 delegates from all provinces and sectors to participate in a series of panel discussions to debate the challenges and opportunities of growing the region’s base of technology-based businesses.

The theme of tech-based business in Atlantic Canada takes on a sense of urgency when a breakdown of the region’s R&D performance is considered. The private sector accounts for less than 20% of all R&D performed in the region, compared to more than 50% nationally and up to 70% in some industrialized nations. Regional R&D intensity is just half the national average.

“In this region we have our backs to the wall,” said Univ of Prince Edward Island president Dr Wade MacLaughlan. He estimated that the region has a five-year window to develop an effective, focused strategy for becoming more innovative. MacLaughlan pointed to the PEI Bio Alliance and efforts to create a sustainable bioscience cluster in the province as the kind of activities that must be pursued, as well as the need to support graduate students.

As in the rest of Canada, the role universities and colleges play in the innovation system was the subject of considerable debate. The discussion was brought to a head by comments from Robert Orr, president of Halifax-based Ocean Nutrition Canada, the continent’s largest privately owned marine natural products research facility. A member of the conference’s private sector panel, Orr contended that while universities are critical for generating skilled talent, they should leave commercialization to the private sector.

“If the aim is commercialization, why in God’s good name would you want to entrust that to universities … Canadian universities are horrific at commercialization,” he said. Instead, Orr argued that government has a role in assisting companies during certain stages of development. He pointed to funding from InNOVAcorp, Nova Scotia’s commercialization agency, as the right approach, but added that its fund is too small to be really effective.

Orr’s comments drew strong reaction from several participants, including Dr Nancy Mathis, a fellow panel member and president of Mathis Instruments Ltd. Her firm is a university spin-off and she contended that universities have a critical role to play in the area of technology transfer.

Defence of the university role in commercialization also came from Dr Yves Gagnon, a researcher at the Univ of Moncton and head of the NSERC Atlantic Canada regional office. Gagnon said there seems to be “a complete misunderstanding of the university world” and that universities must remain in the knowledge business.

SUCCESSFUL INNOVATION POSSIBLE

Despite the low level of private sector R&D in the province, several companies have been spectacularly successful in securing global markets for their products and services. Industry keynote speaker Paul Kent, COO of Xwave and senior VP of parent Aliant Inc, says his firm is providing information technology and communication (ICT) services to a wide array of international clients in several sectors. Xwave is a subsidiary of Aliant, which is majority owned by Bell Canada.

“We’re a home-grown company with an international presence and a full service ICT provider” of secure wireless management systems for specialized industries, said Kent, adding that Xwave has developed a near shore model targeting US companies, especially in the northeast.

Scarcity of venture capital in the region was another key topic of debate, with most participants agreeing that there were gaps in the financing continuum where government can play a role.

Peter Forton, senior VP investments with GrowthWorks Atlantic Ltd, said governments have critical role to play at the early stages of capital formation.

“It’s tough to make money on a seed fund. The acceleration of company development is critical for venture capital,” said Forton. “You have to close the gap through people and leadership to get venture capital. You need to help companies pay for executive recruitment to bring expertise into the company and into the region. But if you recruit a CEO to head up a company, you don’t have to insist that they move to the region. They should be close to the customer.”

Jeff White, VP Deloitte & Touche, Corporate Finance Inc, emphasized the need for an attitudinal change to increase business innovation. He said Atlantic Canadian businesses need to become more regionally focused rather than concentrating on specific cities or provinces. He also lauded initiatives such as the New Brunswick Innovation Foundation and InNOVAcorp, saying that Atlantic Canada could benefit from similar organization except with a pan-regional scope.

Dr Doug Barber, former CEO of Gennum Corp, also weighed in with his prescription for Atlantic Canada, which essentially replicated his prescription for innovative businesses regardless of location. He emphasized the need for companies to focus on markets and customers, noting that most of the nations that rank ahead of Canada in terms of prosperity actually have smaller populations.

“You have to trade to be prosperous,” said Barber. “You have to start with customer needs and they are not simple. You can’t sell into a market unless you know what the customer wants.

The RE$EARCH MONEY Atlantic Conference was supported by several organizations, with the Atlantic Canada Opportunities Agency (ACOA) as the lead sponsor. Doug Robertson, ACOA’s director of innovation policy and research projects, said discussion on finding the right balance in public support for research was helpful, as was the growing recognition that customer innovation was the key to establishing successful niches.

“At the front end of the innovation spectrum should be a customer — market demand. There’s a lot to that message,” said Robertson. “One of the things that’s becoming evident is a unity of purpose ... There’s a sense of urgency and there’s an opportunity. We need to be focused and have the collective will to move the region ahead. That’s starting to pay off. We’re turning it around.”

The complete proceedings of the conference will be posted on the R$ web site shortly at www.researchmoneyinc.com.

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