Canada in discussions to become the latest member of EUREKA program

Success will require champions

Canadian companies will be gaining access to a major European R&D program if high-level negotiations are successfully concluded later this spring in what some observers are describing as a done deal. Officials from Industry Canada and the National Research Council (NRC) are in discussions to join the EUREKA program, which has funded approximately 4,000 industrial-driven projects worth more than 29 billion Euros since its formation in 1985.

Canada's participation would make it only the second non-European Union country to be granted associate membership status in EUREKA, which also runs the Eurostars program specifically geared towards research-intensive small- and medium-sized enterprises (SMEs). About 60% of EUREKA projects involve biotechnology and information and communications technologies (ICT) and 90% of companies use the program to develop products or processes.

RE$EARCH MONEY has learned that Canada is exploring the use of the NRC's Industrial Research Assistance Program (IRAP) as its conduit into the program, raising questions over how Canada will fund projects in which it wants to participate. IRAP's budget has fallen to its pre-economic stimulus levels. Although the last federal Budget provided it with $80 million in new funds, the money is targeted towards a pilot initiative supporting collaborative projects between colleges and SMEs in ICT.

At the recent RE$EARCH MONEY Conference in Ottawa (see page 3), Luuk Borg, the head of the EUREKA's secretariat, outlined the advantages of the program and revealed that Canada is on track to become a member by end the of June. The fee for joining would be about $100,000 and Canada must provide funding for any project in which it wants to participate. EUREKA's current member count stands at around 40. Borg met with NRC officials including president John McDougall May 13th. (McDougall declined to be interviewed for this story.)

Canadian membership in EUREKA has caught the attention of politicians in both Canada and Israel, with the latter eager to demonstrate that its one-year term as chair of EUREKA has generated tangible benefits such as new member nations. Canada has also been strengthening its R&D and business connections with Israel and its EUREKA membership is seen as a strong sign of continued cooperation. The two countries have collaborated on business-led R&D for many years through the Canada-Israel Industrial Research and Development Foundation.

EUREKA appears to be an ideal mechanism for addressing the needs of research-intensive SMEs seeking ways to commercialize their technologies and bring them to the marketplace, particularly with the program's recent emphasis on entrepreneurship and innovation. Borg says it is designed to fast-track projects with reduced time to market by supporting smaller companies along their life cycle rather than their value chain. By being more responsive to company needs, Borg says it helps to prepare firms for venture capital or other forms of support.

Canada is already a leader in EUREKA among third-party project participants, with companies engaged in 55 projects since the program's inception.

project types

As an intergovernmental initiative, EUREKA projects are financed using national public and private funding through a bottom-up process in which the consortia decide on project direction. With no thematic restrictions, it supports three types of projects:

* Cluster Projects for medium-term, strategically-significant initiatives for developing key generic technologies involving a large number of participants;

* Individual Projects for smaller, shorter-term projects involving at least two member countries; and,

* Eurostars Projects for small, short-term projects, involving participants from at least two member countries in which the consortium leader is an R&D-performing SME. The latter is programmed jointly with the European Commission.

key advantage

"The key advantage (of EUREKA) is leverage. When Korea joined, it committed $1 million to get access to projects. It's by far the best advantage," says Dr Denys Cooper, a consultant and former director of IRAPs strategic alliances branch and international collaboration. "EUREKA pushes for the links between the research idea, commercialization and venture capital … You get more out of it if you put time into it to drive it but you need a champion and money."

Cooper was involved in an attempt to bring Canada into the EUREKA program more than 10 years ago. But he says those discussions quickly collapsed over the fee structure being charged for non-contiguous nations.

Technically, the latest initiative wouldn't be the first time Canada has joined EUREKA. In the late 1980s, Canada launched its Technology Opportunities in Europe Program (TEOP) to gain access to EUREKA projects.

"The problem was uptake. The government contributed about $20 million to TEOP to help companies participate but Canadian companies were not at the table," says Paul Dufour, principal of PaulicyWorks and a former policy advisor with the federal government specializing international relations. "But for a government complaining about the lack of private sector initiative in R&D, innovation and partnerships, this is a pretty useful thing to do provided they have the money to support it."

Dufour adds that finding champions both in government and industry is essential or "it's dead in the water like the last time".

"It's a good idea to encourage European partnerships as market opportunities are growing in areas in which we have skills," he says. "It's a joint venture. Industry should take ownership."

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