Commercialization: Best Bet is Market-Facing, Community-Based Organizations

By Greg Barratt

The federal government has challenged Canadians to be more innovative. Among many key measures, two notable objectives have emerged for 2010. One is to move from 15th to 5th internationally in national research expenditure. The other is to triple the commercialization rate of research. Our country needs research to be commercialized because this is a substantive measure of innovation that will impact national productivity and wealth creation.

Commercialization of new ideas can occur by either creating new companies, or by introducing the ideas into the products or processes of existing companies. Our national challenge is how to get the best commercialization bang for the buck. Two factors must be considered as a part of this challenge. One is how to stimulate and support more private sector research and development. This discussion warrants a separate article. The other factor, that will be discussed now, is how to get more public sector research converted into private sector development.

Kudos to the federal and provincial governments. They have already begun to meet the challenge to fund more public sector research in universities and arm’s length organizations. But government funding alone will not result in sustained innovation.

While universities and government labs have a large responsibility for conducting research, it doesn’t follow that they are the most logical drivers behind delivering this research into business applications. Universities excel at research and teaching. Government labs excel at research. In neither case can their core strength be considered commercialization. So, if we are to meet the mandate of tripling our commercialization rate, we need to bridge the research being conducted with opportunities in the business world to successfully enable commercialization.

One way to better facilitate the link between public sector institutions and the business world is to build market-facing, community-based commercialization centres. These multi-stakeholder organizations would speed the creation of new technology businesses, and support pulling technology out of research sources to inject it into existing private sector companies.

Commercialization centres would have many benefits. As opposed to most research institutions, market-facing organizations would be one step closer to being able to understand the constantly evolving needs of businesses. These centres would bring focus and expertise to the difficult task of linking ideas to businesses. They would also reflect the fact that sources of new business ideas are varied. While many ideas spawn from public sector research, others are spun off from existing companies, and still others evolve from basement operations. Community-centred organizations could be the galvanizing force for commercialization. Most Canadian cities are ideally sized to utilize such a centre to bring together the efforts of multiple public sector research institutions with those of the business community.

These commercialization centres should be funded by a variety of sources. Local municipalities should have a funding stake because the creation of new businesses and the strengthening and growth of existing businesses is a natural economic development imperative. Public sector research institutions should have a funding stake because the commercialization centres will be key partners in exploiting research and generating both wealth and feedback from the market. Senior government should have a funding stake because these public-private partnerships can help fulfill the vision of increased national innovation. Finally, the private sector should have a funding stake because it will see these centres as a mechanism to complement its own R&D efforts, thus improving its own productivity and profitability. Overall, with cooperation and collaboration, these commercialization centres will succeed because they are viewed as valuable community initiatives.

Commercialization centres represent the best of all worlds. Being market-facing and community-based, these organizations would understand local business interests by maintaining relationships with key industry sectors. With a pulse on ongoing research being done in academic and other institutions, they would be able to pull ideas out of the research and link them to business needs and challenges.

If we truly want to foster innovation, we need centres staffed with people whose full-time jobs involve networking with industry and business, and whose strengths lie in being able to pull research out of academia and bring it to business ventures. Armed with the right mixture of technical know-how and market insight, the commercialization centres will be a viable solution to bridge the gap between research and commercialization. These centres should be accountable to funding partners, and operate under a governance model that reflects each partner’s stakes and priorities.

To realize our vision of tripling commercialization rates by 2010, Canada needs a firm commitment to developing mechanisms that bridge sources of research with development of business applications. Market-facing, community-based commercialization centres are a great way to achieve this goal.

Greg Barratt is president of Communitech Technology Association Inc, representing the innovative technology cluster in the Waterloo region.