New TPC programs the first of several changes linked to innovation agenda

“Stayed tuned.” That’s the advice from the new executive director of Technology Partnerships Canada (TPC) as the program prepares to undergo a major transformation as part of the federal government’s pending ramp-up of its innovation agenda. Jeff Parker isn’t giving away many details, of course, as discussions are ongoing and TPC has grown increasingly tight-lipped following its repeated characterization as a business slush fund by the political right. But TPC’s launch earlier this month of two new programs provides an indication of the direction the five-year-old business assistance program is likely to take (http://tpc.ic.gc.ca/).

Geared towards the small- and medium-sized players in the aerospace and defence (A&D) sectors, the programs — taken from the existing A&D budget envelope with a total cost of $39 million over three years — mark the first time the organization has earmarked funds for development other than R&D. They are also notable for their more generous assistance, less onerous repayment schemes and narrow focus.

“We’re at a major point of shift and change in the program to become more focused, or the focal point for government’s innovation agenda,” says Parker in an interview with RE$EARCH MONEY. “There may well be substantial modifications yet to come in terms of what TPC does and how it does it.”

The new programs were conceived following the completion in 1999 of an aerospace study conducted by PricewaterhouseCoopers and jointly funded by Industry Canada and the Aerospace Industries Association of Canada (AIAC). It showed that smaller firms in the A&D sector were falling behind in their ability to compete globally due to structural changes taking place in the industry. The same year also saw the release of an Industry Canada technology roadmap for the sector, adding fuel to the rationale for different types of programs targeting the manufacturing and management systems of smaller firms, as well as collaborative technology development.

TARGETING NEEDS OF SMES

The Aerospace & Defence SME Supplier Development Initiative (SDI) will provide $30 million over three years to smaller firms that need to increase their internal capabilities in the area of management skills, electronic data interchange and manufacturing systems. TPC will provide 40-50% (to a maximum of $1 million) to the cost of successful projects not exceeding $2 million or two years in duration and undertaken by firms with up to 100 employees and $20 million in annual sales. SDI marks the first time TPC has provided funding for activity other than R&D, although officials say such assistance will ultimately improve the R&D capabilities of funded firms.

“There was a need identified for these companies to increase their internal capabilities and this program specifically targets SMEs and their internal design, information and management capacities,” says TPC VP John Brunet. “It (the program) is providing a greater level of assistance (than regular TPC financing) and it’s also less demanding in terms of repayment.”

The Canadian Aerospace Collaborative Technology Development Initiative has a smaller budget than SDI ($9 million over three years) but it does target R&D and is considered a more complex program to manage. Firms seeking funding must establish multi-partner R&D projects for developing critical technologies that involve sharing of intellectual property (IP) and sharing results. TPC will provide matching assistance between $100,000 and $1 million for each project in return for unconditional repayment over 10 years. The program will be facilitated through the AIAC-National research Council (NRC) Office of Collaborative Technology Development, established two years ago to encourage joint R&D initiatives.

“This is kind of the first step in a cultural change for the industry. We’re expecting that the opportunities will be few in number and more focused and more difficult to accomplish because there will be three or four partners working and sharing to come up with a common agenda,” says Brunet. “In Europe there’s much more of a culture of sharing and collaboration and through the technology roadmap process we identified a need for Canadian firms to work in collaboration in order to gain competitive advantage, not vis a vis each others but for the industry.” Brunet says a typical program may look like the US/Canada Hard Chrome Alternative Technologies project which TPC assisted last year, which sought to come up with materials used in landing gear that were less environmentally harmful than hard chrome plating (R$, October 2/00).

To sell the new A&D programs to the hundreds of eligible firms across Canada, TPC officials will continue to work with the AIAC and will be attending upcoming events of several regional aerospace industry associations. “We want to make sure we’re on the ground with the SMEs, informing them and being directly accessible to them to make sure that the programs are distributed as widely as possible,” says Brunet. “We want industry to take hold of these things and expand and grow their capacities.”

MORE CHANGES COMING

The launch of the new programs comes at a critical point in TPC’s five-year history. Since its inception, the organization has gradually taken on more responsibilities, entering into a jointly-funded program with the NRC’s Industrial Research Assistance Program (IRAP) and delivering a portion of climate change funding. Its annual funding now stands at $315 million a year (including its $15 million contribution to the joint TPC-IRAP program) with two thirds going to A&D and the remainder split between biotechnology and enabling technologies. Revenue stemming from repayment of TPC investments is not expected to reach substantial levels for another three years.

In the meantime, substantial new government funding could be on the way. Recently obtained documents relating to the pending Innovation White Paper (see page 3) show that Industry Canada is requesting additional TPC funds in the area of biotechnology. The proposal is part of a package of initiatives that includes a bio-products institute modelled after Genome Canada and a technology foresight program.

“There are a wide variety of areas where we could potentially put money, but the critical thing for us is ... to be situated as part of the innovation agenda of the government,” says Parker, who took over TPC’s executive reins in February after a three-year stint with the Privy Council Office (R$, January 29/01). “In terms of the articulation of that I think TPC will be one of the areas in terms of looking at commercialization and the pre-commercialization of knowledge. It will become one of the instruments used for that, so there’s a high probability TPC will continue to expand to be an instrument for that part of the agenda.”

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