Dr Margaret Dalziel

An alternative structure for the NRC

By Dr Margaret Dalziel

As we await the next proclamations on research and innovation from the federal government, the perennial question of how to best leverage our scientific and technological capacities for economic and social gain gets its annual examination. The capacity for change is limited, however, because the lion’s share of resources is already allocated to major initiatives such as the National Research Council, the granting councils, and the Canada Foundation for Innovation (CFI).

But while the granting councils and the CFI are resource allocation bodies with a certain amount of built-in flexibility, the capacity for change among the institutes of the NRC is unduly limited by commitments to people, programs, and infrastructure.

An alternative is for the NRC — net of the Industrial Research Assistance Program (IRAP) and the Canada Institute for Scientific and Technical Information (CISTI) — to be restructured as a council that provides grants, on a competitive basis, to programs put forward by not-for-profit research centres. These research institutes would be initially comprised of the existing NRC research institutes reconstituted as not-for-profit corporations.

The new not-for-profit research centres might be granted initial five-year grants on a non-competitive basis to ease the transition. But eventually they would compete with their peers for various types of program grants available only for not-for-profit research centres: infrastructure, science-driven research, industry-driven research, research driven by national priorities, technology commercialization activities, etc.

They could also compete with private sector companies and university researchers for industry and government contracts. This would allow the NRC to support the best and most important research and technology commercialization initiatives, without being constrained by commitments to existing institutes and personnel. Successful centres would naturally take on more and larger programs and unsuccessful centres would eventually see their funding expire – pretty much exactly what happens to researchers in the university environment.

Just as importantly, by reconstituting the current research institutes as research centres the NRC has an opportunity to increase their relevance and their ability to work collaboratively with companies, university researchers, and other government departments, both domestically and internationally. Each research centre would be governed by its own board of directors and each would devise its own priorities, policies, and programs according to what it perceives as the most important challenges and opportunities faced by it and its community of interest. Some might choose to work closely with university scientists while others might work more closely with companies, some might become integrated into international initiatives while others might see value in establishing operations in multiple locations across Canada. The all important human resource policies could vary according to the conditions faced by the respective centres.

STRATEGIC ROLE FOR NRC CORPORATE

The reformulated NRC corporate office would play a high level representational and strategic role. The NRC is the only science and technology body in Canada that is able to represent the diverse interests of the country and to engage on our behalf with its national counterparts in other countries. This is a role it would continue to perform in cooperation with the Department for Foreign Affairs and International Trade. In its strategic role the corporate office would identify the broad nature of research and technology commercialization priorities as part of the process of designing and managing competitions for program grants. It would retain A base funding and a commitment to funding the program requirements (including overhead) of a population of not-for-profit research centres, but it would have greater freedom in shifting resources among members of that population.

Such an arrangement would respond directly to the concerns of those, including the Auditor General, regarding the current difficulty the NRC has in funding the best projects regardless of their sponsoring institute. Under the current arrangement, budget inertia limits the growth of successful institutes where many strong projects likely go unfunded, and at the same time slows the decline of unsuccessful institutes. If the NRC were to respond to those concerns by developing a systematic approach to comparing projects across institutes, the bureaucratic overlay might be become unbearable. The approach outlined here avoids two layers of bureaucracy by turning the institutes into autonomous organizations that report only to their own boards of directors.

As a resource allocation body, the reformulated NRC would have direct influence over the life and death of programs submitted by the research centres, but only indirect influence over the life and death of the centres themselves. It’s conceivable that under exceptional circumstances a not-for-profit corporation might determine that it can better serve its constituency by transforming itself into a private company, just as US-based Sematech did in 2000, and thereby nullify the influence of the NRC over its existence.

As the federal government contemplates alternatives models for the NRC such as the National Laboratories of the US and the Fraunhofer Institutes of Germany it should keep in mind the distinguishing features of the Canadian situation. Our expansive geography, strong university-based research, and limited financial resources favour the “institutes without walls” approach that has spawned many successful initiatives including the Canadian Institute for Advanced Research, the provincial and national centres of excellence, and fourth pillar organizations such as CMC, Canarie, and Precarn. The NRC has a long and distinguished history of contribution to science and Canadian competitiveness. Its ability to contribute in the future depends on the ability of our federal government to make an unyielding commitment to a process that has designed-in flexibility.

Dr Margaret Dalziel is a professor of innovation and entrepreneurship at the University of Ottawa’s School of Management.