Xerox Canada opens Mississauga labs to SMEs; in talks with province to expand model

By Debbie Lawes

Xerox Canada Limited is pitching the Ontario government on a new commercialization model that would see large multinational corporations open their doors to early stage companies, SMEs and universities needing access to specialized research, testing and scale up facilities. Its 120,000 sq ft Xerox Research Centre of Canada (XRCC) in Mississauga ON officially launched the model in October and expects to sign up its first clients by the end of the year.

"For years people would come to Xerox, knowing what we had in terms of labs and pilot plants, and ask if they were available for them to access. But those requests were always turned down by the corporation," says Patricia Hawkins, Xerox Canada's business manager of research agreements and innovation services. "Now, with such a focus in Ontario and Canada on commercializing, we felt it was important that we play a role in helping small companies, start-ups and even some large companies, because we have all this infrastructure in place."

Xerox Canada's R&D spending has changed little over the past decade, according to Research Infosource's Top 100 Corporate R&D Spenders List. The company spent $25.6 million on R&D in 2010, a 17.1% increase over the previous year. In 1999, it spent $22 million.

XRCC executives recently met with the ADMs of the former Ministry of Research and Innovation and the new Ministry of Economic Development and Innovation to sell them on taking the model province-wide. Under the plan, research-intensive multinational companies would provide SMEs, start-ups and eligible universities with access to specialized infrastructure and technical competencies to conduct process and product development.

"We're looking at perhaps a staged approach, where there would be a network structure where SMEs or start-ups could link their needs to the specialties of multinationals in the province. The first step is for SMEs to know what's available," says XRCC's VP and centre manager, Paul Smith, who was promoting the new model at the Canadian Science Policy Conference in Ottawa this month.

In terms of funding, Hawkins says the Industrial Research Assistance Program "is an excellent example of a model which would work well for this initiative." IRAP officials toured the Mississauga facilities recently and Smith said they were "very interested" in the idea.

"We're not looking for government funding to flow to Xerox or multinationals — it would be for SMEs who would use the money to contract the research with a multinational," says Smith, who was promoted to his new position in August. "We are getting support at the provincial level for this. They'd like to run through a trial with us first to see how it works, then begin talking to other big companies to see if they're interested."

Xerox's announcement comes as the City of Mississauga, like many cities across Canada, is looking to grow companies and create jobs through research and innovation. A recent report prepared for the Research, Innovation, Commercialization (RIC) Centre — An Action Plan for Innovation in Mississauga — suggests identifying incubation, lab and other specialized R&D space within established firms or other underutilized industrial properties throughout the region that can serve the needs of start-ups and SMEs.

BOOSTING XRCC'S RESEARCH CAPABILITIES

Hawkins says their initiative is driven, in part, by a desire to leverage XRCC's capabilities to help smaller companies de-risk technologies and accelerate time to market. It will also feed innovative ideas back into Xerox Corp that can be translated into new research capabilities and new materials for new markets. The model will also help XRCC grow incrementally, by about 10%, beyond the core services that it provides to Xerox Corp, she notes.

"There has to be a business value or we wouldn't be able to do this," says Hawkins. "But it's so much more. This isn't being driven primarily by under-utilization of our facilities or the need to generate more revenue. It's about making sure that our facility stays in Canada for the long term."

The model was first pioneered in 2002 at Xerox's PARC research centre in Palo Alto CA. XRCC will be the second of its five global research centres to adopt this contract research model, which is also being considered at Xerox's headquarters in Rochester NY.

With a staff of 140 people — 37 of whom have PhDs — XRCC is a global leader in advanced materials research, including toners, coatings, colorants, composites and electronic materials.

XRCC says its new service offerings are much broader than a typical contract research organization. Its three research labs in Mississauga ON will work with clients through all stages of the commercialization process — from basic chemistry through to technology transfer. Potential customers include companies from the renewable energy and entertainment sectors.

"The whole value chain is all in our building, which is unusual for most companies," says Smith. "We can take materials from the test tube right through to 500 gallon reactors. Then we would transfer it back to the client to take to a large manufacturing facility."

The Mississauga centre will supply its own patented materials, or assist in the design of new ones. XRCC would hold the patent on any new materials and the client could apply for a separate patent on applications related to the use of the materials.

XRCC plans to hire an additional 10 scientists, engineers and other support staff to work with clients. They will be hired on contract, which would enable them to move to the SME once a technology is ready to be commercialized.

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