Editorial

Two organizations are beginning to apply the wisdom of casting the innovation net broadly. Mitacs and the Ontario Centres of Excellence (OCE) have both expanded their scope to incorporate previously under-utilized components of the innovation system, and for good reason.

For Mitacs, its recently replenished internship funding will allow the pioneering former Network of Centres of Excellence to push into industry sectors with low R&D intensity, as well as advocating for the use of social sciences research in addressing company challenges.

At the OCE, the decision to merge with the Colleges Ontario Network for Industry Innovation (CONII) brings Ontario's 24 colleges closer to the decision making apparatus that determines where increasingly scarce public resources can be directed for maximum impact (see page 5).

Proponents of colleges and the social sciences have long argued that their place at the innovation table has been ignored for too long and must be expanded. The word appears to be getting through.

Yet another indication of the broadening innovation policy landscape comes from a study by OCAD Univ on Ontario's mobile industries. The report from OCADU argues, in part, that excellent design is critical in growing a world class mobile sector.

All this is well beyond the traditional technology-centric thinking about innovation and it can only help Canada's quest to advance the transition to an economy that's firmly grounded in knowledge as well as natural resources.

Mark Henderson, Editor

How to make industry-academic partnerships work

By Nancy Hughes Anthony

Running a research centre that involves both academia and industry isn't all that different from running a successful technology company. You need an experienced management team with the marketing and legal know-how to develop new products and services that customers will want and buy. You need an engaged board of directors with the requisite business, legal, financial and technical expertise. And, perhaps most importantly, you need a solid business and financial plan that can meet milestones and change direction quickly if things get off course.

These aren't approaches one would normally see within a traditional research organization. But apply them to a group that puts academic research to work solving industry challenges and you have the basis for an effective collaboration model. Canada has developed two such programs over the past five years: the Centres of Excellence for Commercialization and Research (CECR) and Business-Led Networks of Centres of Excellence (BL-NCE) — tri-council programs managed by the Networks of Centres of Excellence (NCE) Secretariat.

CECRs match clusters of research expertise with the business community to share knowledge and resources to bring new technologies to market faster. BL-NCEs are large-scale collaborative networks headed by not-for-profit industry consortia that increase private sector investments in R&D. A Private Sector Advisory Board (PSAB) comprised of venture capitalists, bankers, serial entrepreneurs and seasoned industry executives provides expert advice and recommendations on these two programs.

These cost-shared networks and centres provide money to support R&D and students with job-ready skills, responding directly to real-world challenges facing Canadian industry. They will stick with your research team or company through the inevitable ups and downs of innovation to help push promising research closer to market.

The first wave of CECRs and BL-NCEs, 11 and four respectively, were true pioneers in this bold experiment. There were no proven commercialization models, no agreed upon best practices, no magic bullets for sustaining a centre after public funding ended and no "right" approach to handling the thorny issue of intellectual property when competitors collaborate in a business-driven research network. There was, however, an unwavering commitment by respected science and business leaders to test new ways of collaborating.

The government has since made the programs permanent and funded another 11 CECRs. Despite the current fiscal belt tightening, new competitions are underway or planned to launch even more CECRs and BL-NCEs, and extend support for existing ones.

Why the confidence in these particular programs? In a word, "results": millions of dollars in venture capital for start-up firms, commercialization centres with a clear path to self-sustainability and, for BL-NCEs, cooperation between competitors to find solutions to shared industry challenges. For every $1 in public funding invested in the CECR and BL-NCE programs, industry contributes $0.76 and $1.68 respectively. This increases to $1.85 and $3.01 respectively when contributions from other partners are included.

Industry engagement key

Inclusive governance is key to a successful centre or network. This requires working from the start with the companies that will make and market these technologies, as well as the customers who will ultimately benefit from them.

This goes well beyond a letter of support or even a financial contribution. With both CECRs and BL-NCEs, you see small and mid-sized companies through to multinationals represented on boards of directors, management committees and advisory boards. They are part of the decision-making process, helping to set the organization's strategic direction, its research priorities and closely monitor each project's progress to ensure its commercial feasibility.

The PSAB has learned much about what works and what doesn't when it comes to commercialization and private sector consortia. As a result, we have raised the bar for what will be expected of new CECRs and BL-NCEs, and those applying for a funding extension. Just because a network or centre was funded in a first round does not guarantee it will be automatically renewed — fewer than half are. New applicants are expected to use best business practices to develop an effective business plan, exit strategy and realistic projections for self-sustainability. These are challenging criteria, even for networks and centres supporting impressive research and commercialization initiatives.

path to sustainability

CECRs are expected to become self-sustaining during their funding period. This sustainability can take many forms. GreenCentre Canada, for example, takes a sweat equity approach, exchanging its technical, management and legal services for a stake in any new spin-off. MaRS Innovation uses a combination of institutional membership fees and takes a percentage of royalty streams from new products or an equity stake in spin-off firms. For other networks and centres, it may be revenues from contract research agreements, product sales, royalties or licensing, as well as contributions from other private and public sector entities. Whatever the model, ongoing involvement from industry is essential.

The PSAB recognized the inherent difficulty in requiring CECRs to become sustainable in just five years. Different technologies have different development cycles — commercializing a new drug obviously take much longer than a new smart phone app.

In response, the NCE will no longer impose a fixed funding period on new CECR applicants. While the contribution levels will remain the same, that support may be provided over 10 years, for example, assuming applicants have meaningful industry engagement, and provide a realistic assessment of how long it will take to become fully operational, move their innovations to market and become self-sustainable. Similarly, the BL-NCE program will now allow networks to apply for renewed support after five years to achieve research objectives in their sector – up to an additional five years.

Organizations around the world are searching for what works best when it comes to industry-academic partnerships. I'm proud to see Canada continuing to raise the bar for two programs that are breaking ground internationally.

Nancy Hughes Anthony chairs the NCE's Private Sector Advisory Board and is the former president and CEO of the Canadian Bankers Association.

Will someone tell me who's driving the bus?

By Dr Peter Morand

Medical technologies (sometimes referred to as medical devices or medtec) are seen as a key economic driver in many countries that have provided incentives and R&D support for products and services in this exponentially growing sector. This is not surprising in the light of demographic trends that have ensured sustained market growth with global markets in the billions of dollars. But here in Canada, just when we seem to be getting our act together to become a more significant player in this industry, abrupt unilateral actions have been taken that seriously undermine the progress that's been made to date.

First, let's look at what's been done to position medical technologies as one of the pillars in Canada's innovation strategy. Medical imaging is an important component of medtec and many universities have established state-of-the-art facilities for research and training in this area. This could not have been accomplished without the help of Canada Foundation for Innovation grants complemented by investments from provincial governments and other granting agencies. An example is the Robarts Research Institute's Imaging Research Laboratories (IRL), adjacent to the London Health Sciences Centre and Western University.

substantial investments

In keeping with CFI's substantial investment in Canada's medical imaging capabilities, NSERC has given prominence to medical imaging and photonics in its Collaborative Research and Training Experience program. Collectively the IRL and the imaging centres in other provinces have a strong track record of knowledge translation — a very encouraging sign.

CIHR's Regenerative Medicine and Nanomedicine Initiative (RMNI), launched a few years ago, cuts across several of CIHR's institutes and demonstrates how widespread medical technologies have become in many aspects of health research, including tissue engineering and transplants.

Tofy Mussivand, director of the Cardiovascular Devices Program at the University of Ottawa Heart Institute, has organized three Medical Devices Summits (2010-12) with the "ultimate goal of advancing a National Medical Devices Strategy". Very noticeable at this year's summit was the more prominent role of senior executives from industry and of a re-energized MEDEC, the association of Canada's medical technologies companies.

At the provincial level, British Columbia (Life Sciences British Columbia), Ontario (Health Technology Exchange), Quebec (Campus des technologies de la santé, CTS) and others have identified medtec as a growth sector for their respective economies and have put in place policies and mechanisms for nurturing the industry.

The National Research Council (NRC) has been no slouch in building Canada's medical technologies infrastructure going back to the days when Bill Schneider, a world-renowned magnetic resonance spectroscopist, was its president. In 1992, NRC launched the Institute for Biodiagnostics (NRC-IBD) in Winnipeg, which started operations with a staff of 25 and grew to a complement of over 200 with satellite locations in Calgary and Halifax.

As a former member of the institute's advisory board, I was impressed by the quality of its R&D program and emphasis on knowledge translation. The IBD became an integral part of Winnipeg and its economy and the innovation ecosystem was further enhanced with the construction of the adjacent NRC Centre for the Commercialization of Biomedical Technology.

On a website that has now been archived, the Institute's sustained growth was attributed to multidisciplinary R&D that spawns new ideas and encourages technology translation; a focus on R&D directly related to improving health care; and; local, national and global partnerships.

Undoubtedly, execution of this strategy is what led to nine spin-offs and commercialization support entities. The two big success stories are IMRIS Inc (VISIUS Surgical Theatre) and Novadaq Technologies Inc (fluorescence imaging for real-time visualization during surgery) — both publicly traded companies with a combined market cap in the order of $650 million. Not bad for Canada's fledgling medtec industry.

In the last two decades Canada has succeeded in creating a viable medical technologies infrastructure with bioengineering programs in many of its universities/colleges and state-of-the-art facilities in imaging and lab-on-a-chip capabilities across the country, anchored by NRC-IBD.

Among advanced technology start-ups in Canada, medical technologies (imaging, diagnostics, home care, etc.) dominate the scene and provinces boast of their achievements in this sector as key elements of their strategies for economic growth. These are all signs that the infrastructure being built is feeding into a dynamic and growing industrial sector, creating the momentum needed to greatly improve Canada's position as an exporter of medtec products and services.

decision to close NRC-IBD

But wait a minute. NRC recently decided to shut down NRC-IBD and its satellite operations and to wind down all its other imaging facilities, including the magnetic resonance facility partnered with the University of Ottawa. No public announcement has been made about any of this and nothing has appeared on the NRC web site.

Notwithstanding the huge investment in capital and human resources that is suddenly being abandoned, these actions will have a significant impact on what appeared to be a well-conceived long-term strategy to position Canada in a sector of great relevance to health care costs in Canada and around the world. As well, it flies in the face of the timely investments that have been made by many players to support this sector.

What's most disturbing is that no one seems to know what is happening at NRC, except through the rumour mill and leaked memos to staff. One rumour has it that NRC has yet to succeed in getting its strategic plan approved by Cabinet. But this is apparently not an impediment for NRC's current management to make decisions that, in my opinion, are blatantly at odds with a cohesive innovation strategy for Canada. We need to improve our innovation performance not undermine it.

Dr Peter Morand is former Dean of Science and Engineering, University of Ottawa, past President, NSERC and past President & CEO, Canadian Science & Technology Growth Fund. petermorand@rogers.com.

Primary aim to increase industry R&D

Government extends Mitacs Accelerate internship funding from two to five years

Industry Canada is betting that a relatively modest investment of $35-million in graduate student and post-doctoral fellow internships will help tackle three main objectives in its innovation and propsperity agendas: job creation, improved industrial productivity and increased business expenditures in R&D (BERD). The enhanced funding envelope — up from $14 million over two years as announced in the last federal Budget — will allow Mitacs to support nearly 5,000 internships at approximately 1,200 companies and develop several pilot projects that will see its reach and influence greatly expanded.

Mitacs was spun out of the original Mitacs Networks of Centres of Excellence (now Mprime) and has become a major force in the interface between academia and industry, providing industry with access to graduate students at a relatively modest cost.

Mitacs CEO and scientific director, Dr Arvind Gupta, says the decision to expand MITACS funding from two to five years came as a pleasant surprise. Mitacs was negotiating with Treasury Board on the terms and conditions of the two-year funding envelope announced in the Budget (R$, May 22/12) but "not the time lines.

"Industry Canada and Treasury Board made that decision, says Gupta, adding that the longer commitment also provides a major boost to his unofficial objective of creating 10,000 internship positions. "It's a long-term strategic goal and I won't give it up. That's the kind of deployment required for increasing BERD (business expenditures on R&D) and this is a very systematic way of doing it," says Gupta. "My sense is, if government is making this five-year commitment, it is also signalling that this is a long-term commitment."

The funding envelope is equal to the government's previous internship investment, which provided $30 million to Mitacs and $5 million to ConnectCanada, managed by the AUTO21 NCE in conjunction with the Univ of Windsor's Centre for Career Education (R$, May 2/11). That funding was delivered through the NCE's Industrial Research and Development Internships (IRDI) program. A mid-term review is currently underway, with site visits to Mitacs and ConnectCanada scheduled for March.

With the new funding, Mitacs will continue to develop several pilot projects that will see its reach and influence greatly expanded – all focused on the objective of increasing Canadian BERD. Its pilot cluster strategy is aimed at boosting impact by injecting specialized skills at various stages of a firm's R&D activities.

"Companies that have significant research challenges often don't know how to deal with them. We help them break it down and bring people in at the right time. We've got a good handle on this and we're negotiating with a few companies," says Gupta. "We want to build ourselves into their development. It's a huge value-add to them."

Under the Mitacs formula, each internship is measured as a unit of 4-6 months and a company can agree to take several units for each internship contracted.

trojan leading user of mitacs internships

A recent memorandum of understanding with London ON-based Trojan Technologies – a wholly owned subsidiary of Danaher Corp, Washington DC – is Mitacs' single largest internship project to date. Under the agreement, the world-leading developer of ultra violet water purification systems – will co-fund 100 four-month internships over the next four years, with 54 already approved or submitted.

"They (Trojan) want to build us into their development. It's of huge value to them," says Gupta. "We provide a cluster of interns to solve problems. Interns say they learn more in multidiscplinary group setting which pulls various disciplines together."

With 30 PhDs on its research staff, Trojan engages in an annual strategic planning exercise to identify technology needs for the coming year. After determining what can be handled in-house, Trojan contacts its Mitacs supervisor to source the requisite talent, drawing on Western Univ, Univ of Guelph, McMaster Univ and Univ of Toronto.

"The biggest value of Mitacs is to be able to get access to expertise quickly that is not available in the company," says Dr Domenico Santoro, a senior research scientist and research team leader at Trojan. "It helps us build collaborations with universities in a way that's extremely effective and we can always add new universities as we go. There's a huge appetite for this type of expertise at Trojan"

Trojan is utilizing the Mitacs program for expertise in areas such as biology, chemistry and engineering, as well as mathematics and physics. Santoro says the company tends to hire post-docs and keep them on for one to two years.

"We bring in a mix of expertise but post-docs tend to work out better. They're free of campus commitments and they're also more qualified," he says. "We use the program as much as we can to accelerate innovation. We're excited about its potential and will use it intensively for the next five years."

The Accelerate program is also proving a valued source for future personnel. Trojan has already hired a previous intern and is grooming another for full time employment. Another major user of Mitacs internships – Vancouver-based Recon Instruments Inc – has used the program to add to its employment base. At the press conference announcing the new Mitacs funding, Gary Goodyear – minister of state for science and technology – noted that Recon's first intern, Dr Reynald Hoskinson, was retained by the firm and is now its manager of R&D.

breaking into new industry sectors

Another Mitacs Accelerate pilot is designed to expand internships into industries that traditionally don't spend much on R&D. Gupta says they are looking at replicating their initial success with the construction industry with the mining sector.

"We're actively talking to the mining sector through the Canadian Mining Innovation Council," he says. "More preliminary discussions are underway in sectors such as forestry, transportation (ports), agri-foods and food manufacturing. We're being systematic about it."

Perhaps even more ambitious is Mitacs' attempts to better engage the social sciences research community. It is working with a group of professor from the social sciences disciplines to "identify where the innovation bottlenecks are". Innovation policy work by companies holds particular potential.

"How do companies relate to customer and to government? How is technology used and adopted? This is where we get real traction with the social sciences," says Gupta. "It's moving a little too slowly for my taste but we're making progress."

ConnectCanada

The AUTO21/ConnectCanada internship program has nearly 100 graduates either placed or pending with automotive companies as well as those in the advanced manufacturing category, including aerospace, construction and green technologies.

And like Mitacs, ConnectCanada has also found internship opportunities for humanities and business students in marketing roles and other non-technical areas.

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Six agencies from five countries

CDRD spearheads creation of global alliance of drug commercialization organizations

The Vancouver-based Centre for Drug Research and Development (CDRD) has spearheaded the creation of a unique international alliance of organizations with mandates to accelerate the movement of promising drug discoveries into the marketplace. The Global Alliance of Leading Drug Discovery and Development Centres is poised to take advantage of shifts in the drug development landscape by pooling resources, eliminating redundancy and sharing best practices.

The alliance was initiated by Dr Karimah Es Sabar, CDRD's recently appointed president and CEO and its former VP external relations. Working with the Canadian High Commission, Es Sabar identified a handful of other fully integrated, similarly focused organizations and pitched an alliance that would facilitate collaboration.

One joint initiative has already been launched although it's too early to be publicly divulged.

"We are task-driven and outcomes-focused and the number one reason for creating the alliance is to move assets further down the pipeline in a more accelerated way," says Es Sabar. "Collaboration could be bi-lateral, tri-lateral or all six centres. We've identified areas where we can come together to pool resources, share large platform technologies and even apply for global grants."

massive pooling of research talent

Together, the six centres represent nearly 400 drug developers working with tens of thousands of academic scientists on more than 165 projects targeting "significant unmet medical needs". Together they have entered into alliances with a majority of the world's biggest biopharmaceutical companies, enhancing the potential for discoveries reaching the marketplace.

"There are six partners in the alliance and they vary enormously in size and each has a different funding model. CDRD is quite new and our funding is relatively diversified (and) we leverage 10 times as many people through our network and affiliations," says Es Sabar. "For me it made sense. Drug development is such a long-term cycle costing as much as $1 billion or more to get to market. This helps to optimize resources. Since we announced the alliance we've been inundated with inquiries and suggestions for participation."

The environment for drug development has changed dramatically in recent years, with waves of consolidation and R&D outsourcing resulting in the closure of R&D facilities around the globe. Canada has not been immune from the downside of these global trends, and Quebec has been particularly hard hit with the shuttering of R&D labs by several of the major drug firms.

"There's been pharma failure in early-stage development because there's so much duplication. The same projects are being developed in the same three or four companies and as a result only one in 10 projects can be replicated within the same company. In Quebec big pharma R&D centres are being disbanded," says Es Sabar. "They didn't work together but we can. We're not married to any one project or institution. We can be objective and move forward on the best projects."

strategy for sustainability

The majority of the centres within the alliance receive their lion's share of funding from their respective federal governments, but CDRD is an exception. The federal government accounts for just one third of its funding, with the other two thirds coming from the province of British Columbia and industry.

Alliance Members

Centre for Drug Research & Development (CDRD), Canada Lead Discovery Center (LDC), Germany (spin-off Max Planck Innovation) Scripps Research Institute, Scripps Florida, Us Centre for Drug Design & Discovery (CD3), KU Leuven R&D, Belgium Medical Research Council Technology, UK Cancer Research Technology, UK

To ensure sustainability, CDRD established CDRD?Ventures Inc, a for-profit subsidiary with a mandate to generate revenue stemming from CDRD's commercialization activities. Its role will become even more critical in the future as federal funding — through the Networks of Centres of Excellence's Centres of Excellence for Commercialization and Research (CECR) program — is reduced.

For the first five years, CDRD received $15 million, but in the recent competition for extended funding, that amount was cut to $8 million (see page 7).

The alliance also offers opportunities for funding. Es Sabar says the alliance will pursue "major funding around a bundle of projects".

"We're preparing a proposal. None of us want to waste funding, resources and manpower. We've already identified areas of duplication so we can tailor our resources," she says. "The goal is not volume but quality and outcomes."

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12th Annual RE$EARCH MONEY conference

First-of-a-kind report from OCADU

Research capacity and access to capital key to boosting Ontario's mobile sector

Ontario has considerable strength in mobile technology research, highly qualified personnel, infrastructure and a solid base of companies in several industry sectors — but it lacks sufficient mechanisms and access to capital to boost commercial development, says a new report on the province's mobile sector produced by OCAD Univ (OCADU).

The 460-page report — one and a half years in the making at a cost of $500,000 cash and in-kind — is the most comprehensive study of its kind in any province. It seeks to demonstrate that, in terms of patents, industry diversification and talent, Ontario has the potential to successfully exploit the exponential adoption of mobile technologies, network and content.

"Mobile is the gateway to services that we need in daily life but we need exploit our capacity in research to have global impact. We have great research bench strengths from fundamental sciences and device engineering to problem solving of the next-generation technologies, as well as a nice mix of fundamental and applied research, companies and small developers," says OCADU?president Dr Sara Diamond, who co-authored the report with Dr Vera Roberts. "We also have a strong ecosystem of companies but we need residents to have mobile services to increase productivity."

Entitled Taking Ontario Mobile: Research-based recommendations for how mobile technologies are part of the financially responsible solution to providing better access to services for Ontarians, the report is a comprehensive study of Ontario's mobile environment. It builds on the experience of the OCADU-initiated Mobile Experience Innovation Centre, and provides a detailed assessment of five critical sectors where mobile must make gains (see chart).

Access to capital remains a major challenge given the fiscal belt tightening at the provincial and federal levels. The report recommends considering a consortium approach to build further industrial research capacity, using a model such as the highly successful TR Labs (now TR Tech).

It also calls for the "modernization and broadening of Business Development Bank of Canada definitions of qualified industry sectors to include mobile product and service firms ... Ontario should ensure that media industries qualify for government-backed private capital".

sectoral focus

Lifelong learning Health Government services Entertainment Commerce

Other industry financing recommendations include refundable tax credits, and levies on media acquisitions by telecommunications firms to finance an investment fund for "development and commercialization of innovative mobile content".

companion report

The Taking Ontario Mobile report is a companion piece to Mobile Innovation: Ontario's Growing Mobile Content, Services, and Applications Industry 2012, which was released last October. That report profiles the current mobile content, services, and applications ecosystem; assesses the economic impact of the industry and financial climate; identifies key trends affecting industry growth over the next three to five years ; identifies opportunities and gaps for industry growth; and, develops a collaborative framework for strategic partnerships and ecosystem support.

Ontario is a leader in three significant emerging technology movements:
1. The "Internet of Things", an emerging concept that is in the process of being recognized by analysts as "the next big thing". It is an array of connected everyday devices (such as appliances) that may be controlled or send data through digital networks.

2. The "maker" movement of do-it-yourself technology tinkerers who work on ideas, experimentation and pre-commercial prototypes.

3. Augmented reality, a live view of the world enhanced by computer-generated media such as sound, images or GPS data.

Among its recommendations are calls to improve access to capital by developing compelling new investment vehicles to attract additional private capital to the mobile sector in collaboration with the financial services community and improve collaboration between existing regional support organizations to make it easier for mobile companies to gain access to support services such as market intelligence, mentorship and infrastructure.

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CRA announces changes to SR&ED

Canada Revenue Agency (CRA) has announced several changes to the administration of the Scientific Research & Experimental Development (SR&ED) tax incentive program "to improve the predictability of the outcome of SR&ED claims". The changes were made in response to new measures relating to SR&ED in the 2012 federal Budget (R$, April 17/12).

The CRA will conduct a pilot project to determine the feasibility of a formal pre-approval process (FPAP); enhance its on line eligibility self assessment tool; improve the Notice of Objection process; and work collaboratively with industry representatives to address emerging issues.

The feasibility of the FPAP concept will be tested through a pilot project that will begin this spring, with the objective of developing a service that will "result in faster claim processing as it will eliminate the need for a post-filing, on site review of SR&ED claims".

The decision to work collaboratively with industry doesn't appear to be any different from practices that were established following the 2007 decision to eliminate the SR&ED Partnership Committee, which was comprised of industry representatives who provided advice to ensure that the program operated with consistency and fairness while evolving along with changes in industry (R$, April 10/07).

The CRA says that it is only committed to continuing to meet with industry representatives to discuss and address emerging SR&ED issues by holding forums and "developing stakeholder case studies". The latter will serve as the basis for discussion at a symposium being held by the Association de planification fiscale et financière in Montreal, February 21-22.

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College gets boost as commercialization network joins Ontario Centres of Excellence

A college network that facilitates collaboration and the development of niche expertise among its members will become part of the Ontario Centres of Excellence (OCE) program effective April 1st. The Colleges Ontario Network for Industry Innovation (CONII) will be integrated within OCE's programs and services, boosting the college offerings OCE will be able to offer and giving CONII's 24 member colleges input into future program development and strategy.

The merger has been under discussion since last fall and was unanimously approved by CONII board members in January, with continuing financial support from the Ministry of Economic Development and Innovation (MEDI).

"This is an amazing development. It shows that colleges are perceived as a key part of the innovation system. It will help us develop closer linkages and better coordination," says Vanessa Williamson, CONII's program manager and now OCE's director of college programs and academic relations. "It also demonstrates that the OCE is a leader in innovation and helping businesses."

Founded in 2007, with $3.5 million from MEDI predecessor, th Minister of Research and Innovation, CONII links colleges along the Ottawa-Windsor corridor. It was refunded in 2009 with $10.2 million over three years, allowing CONII to link up all 24 colleges in the province and establish industry liaison offices at each one. That funding didn't start to flow until late 2010 and is now set to expire March 31/13, making it an opportune time to complete the merger.

"We're trying to help the province's colleges to become more integrated into the technology transfer programs we have with our universities and try to do a better job meeting the needs of colleges and industry clients in the programs we offer," says Dr Tom Corr, OCE's president and CEO. "It will give colleges a voice when we're developing our programs and make this as seamless as possible. When we sat down with (CONII board chair) Don Patterson and the provinces, we found that there were no cons and lots of pros (to the merger)."

Since its 2009 funding agreement with MRI, CONII has received an average of about $3 million annually. The amount has dropped to about $2.2 million but Williamson says CONII can now be more effective in assisting colleges to tap into other funding sources.

"CONNI had some additional funding through NRC/DTAPP (the Industrial Research Assistance Program's Digital Technology Adoption Pilot Program) but individual colleges also got funding from IRAP, NSERC (Natural Sciences and Engineering Research Council) and Fed Dev (Federal Economic Development Agency for Southern Ontario)," she says.

"We will continue to help with this funding and also develop a more diversified funding stream."

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Ontario Colleges

Algonquin College La Cité Collégiale College Boréal Lambton College Cambrian College Loyalist College Centennial College Mohawk College Conestoga College Niagara College Canada Confederation College Northern College Durham College Sault College Fanshawe College Seneca College Sheridan College Fleming College George Brown College Georgian College St Clair College Humber College Canadore College St Lawrence College

Research paper probes financing challenges facing R&D-intensive firms

A new research paper from Industry Canada suggests that smaller R&D-intensive (RDI) firms have more difficulty obtaining debt financing than other companies. Using Statistics Canada data from 2004 and 2007, report author Owen Jung contends that the financing challenge face by RDI firms with less than 500 employees and $50 million in annual revenues hampers their ability to increase productivity and penetrate global markets.

The report is significant for those engaged in the policy debate over whether governments should give preference to knowledge-based, R&D-intensive firms when providing assistance to the private sector.

"Enhancing the pace of innovation development can have a profound impact on the country's wealth and prosperity," states the report. "With the rising prominence of emerging economies in the global economic landscape, improvement in Canada's productivity growth becomes increasingly imperative."

Data suggest RDI firms have a poor credit history compared to their non-RDI counterparts, and tend to have young owners with less management skills — factors that hinder their chances of securing credit. RDI firms are far more likely to be in knowledge-based industries than non-RDI firms.

The scope of the problem is exacerbated by the fact that RDI firms are more likely to have growth intentions and are more willing to share equity in the business. Ontario is particularly vulnerable as RDI firms are overrepresented in the province.

"For higher levels of R&D intensity only, the higher the R&D intensity, the greater the probability that the firm will be denied financing." — Industry Canada research paper

Entitled Credit Conditions Faced by Small and Medium-Sized Enterprises Investing in Research and Development, the report found that RDI firms experienced an average loss of $21,000 compared to an average profit of $80,000 for non-RDI companies, making the need for obtaining credit all the more acute.

"RDI SMEs were, in general, younger and smaller than non-RDI firms, yet they were significantly more likely to engage in exporting activities and to declare growth intensions," states the report.

"Financing R&D activities is frequently a challenge not only because of the often non-trivial costs but also because such activities are inherently risky as the payoff is not guaranteed."

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News Briefs

Ontario pledges $15M for Ottawa innovation complex

The Government of Ontario has pledged $15 million towards a proposed innovation complex in Ottawa that will include business incubation and acceleration space and a new home for Invest Ottawa (formerly the Ottawa Centre for Research and Innovation). The 14,000-sq-m building is being proposed for the Bayview Yards, a 1940s-era municipal public works garage located near the Ottawa River just west of the urban centre. The Ontario government's commitment allows the project - still in the early stages - to move forward. The city says it will contribute $15 million worth of in-kind provisions and has approved $1.2 million to stabilize the structure and conduct an environmental cleanup. This is the second attempt to establish an innovation cluster in Ottawa. In 2009, a proposed $100-million Innovation Hub and business incubator failed when the province withdrew financial assistance, opting instead to support small-scale interconnected business ecosystems....

Wavefront signs agreements with Deutsche Telekom & HP

Vancouver-based Wavefront has entered a long-term agreement with Deutsche Telekom which will see the German telecommunications giant provide access to its machine-to-machine (M2M) resources for use by small and early-stage wireless firms seeking to accelerate their product and services into the marketplace. Wavefront - a Centre of Excellence for Commercialization and Research - recently opened an M2M facility in Vancouver and showcased Deutsche Telekom's resources at its M2M Summit this week. Wavefront has also has agreed to become a premier reseller of Hewlett-Packard's software for accelerated mobile application testing, automation and monitoring....

Feds launch pilot to attract skilled entrepreneurs

The federal government has launched a pilot program to attract skilled foreign entrepreneurs to Canada and help ease the shortage of skills required to manage and grow early-stage technology firms. Start-Up Visa will begin April 1st and run for five years. The Department of Citizenship and Immigration has solicited the assistance of the Canadian Venture Capital & Private Equity Association (CVCA) to provide a list of member VC funds and submit regular reports on program utilization. Applicants will require the support of a Canadian angel investor group or venture capital fund before they can apply. Successful applicants will receive permanent residency status and immediate access to a wide range of business partners...

Accenture opens Toronto development centre

Dublin-based Accenture plc, a multinational management consulting, technology services and outsourcing company, has opened an Innovation Centre for SAP?Solutions in Toronto. The centre is the 11th in Accenture's network of innovation centres with the goal of demonstrating SAP management software and developing production-ready technology. Accenture has more than 250,000 employees worldwide and was previously headquartered in the tax haven of Bermuda....

CIHR launches mental health research network

The Canadian Institutes of Health Research (CIHR) and the Graham Boeckh Foundation have joined forces to choose a partnership lead and selection panel for a new mental health research network. Dr Jacques Hendlisz, chairman of Research Canada has been chose as the partnership lead while the nine-member selection panel is chaired by Dr Dennis Furlong, former New Brunswick Minister of Health. The network will be called Transformational Research in Adolescent Health (TRAM) - A Patient-Oriented Initiative and is the first of several networks planned under CIHR's Strategy for Patient-Oriented Research (R$, March 29/12)...

CECR and BL-NCE funding extensions announced

The Networks of Centres of Excellence (NCE) secretariat has released the results of its competition to determine which of the original recipients of its two industry-facing programs will receive extended funding. The competition awarded renewed funding for four of the original 11 Centres of Excellence for Commercialization and Research (CECR) and one of the four Business-Led NCEs (BL-NCE). The successful CECRs are the Centre for Drug Research and Development (CDRD) ($8 million); Centre for Probe Development and Commercialization (CPDC) ($13.8 million); MaRS Innovation ($14.95 million); and, Prostate Centre's Translational Research Initiative for Accelerated Discovery and Development (PC-TRIADD) ($11.33 million). The successful BL-NCE was the Quebec Consortium for Drug Discovery (CQDM), which will receive $11.7 million over five years. A full report will be in the next issue of RE$EARCH MONEY...

Calendar

February 19-20 in Toronto: Business Innovation Summit 2013: Innovation for the Corporation. Presented by the Conference Board of Canada. FMI: www.conferenceboard.ca....

People

Dr Reno Pontarollo has been appointed president and CEO of Genome Prairie, succeeding Dr David Gauthier effective April 1st. Pontarollo, who is currently Genome Prairie's chief scientific officer, will work will Gauthier over the next two months developing the organization's long-term strategy. Prior to joining Genome Prairie in 2005, Pontarollo was research director for Pyxis Genomics leading a research program on innate immunity. He holds a PhD in veterinary microbiology from the Univ of Saskatchewan and an MBA from Athabasca Univ. Gauthier remains on Genome Prairie's board of directors….

Gilles Leclerc has been appointed acting president of the Canadian Space Agency (CSA), following the departure of Dr Steve MacLean (R$, January 21/13). Leclerc is DG space exploration with the CSA and will serve as president until a permanent replacement is selected – a process that is expected to take several months. Taking over Leclerc's duties in the interim is Jean-Claude Piedboeuf, director of space exploration development….

Peter Garrett has been appointed president of Innovate Calgary after serving for a year in an interim capacity. Garrett is a former executive with the wireless division of Nortel Networks Corp and was CEO of Global Thermoelectric until 2003. Since then he has worked as a technology investor and business and technology consultant. Garrett holds a BSc in electrical engineering from the Univ of Calgary. Innovate Calgary is a full service technology transfer and business incubator organization….

Dr Camille Limoges has withdrawn his membership in three organizations while holding onto the honorary doctorates he received over his long and illustrious career as an academic, researcher and S&T policy maker. In late January, Limoges resigned from the Order of Canada, following his withdrawal from the Royal Society of Canada and the International Academy of the History of Science. In addition to his honorary degrees, he will also hold on to his Prix Armand-Frappier, which he received from the Quebec government in 2004….

Letter to the Editor: Gary Goodyear

Recently, Research Money published an article that cited Statistics Canada figures for gross domestic expenditure on research and development (GERD) (R$, December 17/12). From the article, it appears that, as a country, our investments in research have declined.

This may lead some to believe we are under-investing in scientific research. However, the bigger picture reveals Canada is among the world's leaders.

This past year alone offers some of the strongest evidence yet.

In September, the Council of Canadian Academies (CCA) published a report on the state of Canadian science and technology (S&T). This country has established a strong reputation for S&T, the report said.

Canada ranks fourth in the world for the quality of its scientific research in a survey of more than 5,000 top-cited international researchers. Moreover, the Organisation for Economic Co-operation and Development continues to rank Canada first in the G7 in higher-education expenditures on research and development expressed as a percentage of GDP.

Canada is punching well above its weight. This speaks not only to Canadian productivity in science, but also to our widely recognized reliability as a source of sound knowledge and leading-edge thinking.

Since 2006, our Government has provided $8 billion in new funding for science, technology and the growth of innovative firms. While we continue our strong investments in basic science, we also believe in the transformative potential of science in the marketplace.

But we need to improve business-led support to research and development. We are focusing on investments that will support researchers and the private sector in designing new products and creating new markets.

Canada's Economic Action Plan 2012 provides $1.1 billion in additional funding to support science in the marketplace and improve business expenditures on research and development (R&D). We are doubling the size of one of our most successful initiatives, the Industrial Research Assistance Program, to significantly enhance support for R&D performed by small and medium-sized companies across the country.

We are redefining the way governments, business and the research community come together to drive economic activity through science.

At a time when innovation is increasingly dependent on collaboration, we are taking a leadership role by providing programs that bring the private and public sectors together. This leads to a supportive climate for start-ups, and attracting and retaining world-class talent.

Innovation creates jobs, growth and long-term prosperity for all Canadians. In today's modern economy, our quality of life demands nothing less.

These are our goals. We are confident we are on the right track.

Gary Goodyear
Minister of State (Science and Technology)