Newfoundland taking an aggressive approach to stimulating industrial and academic R&D with two new initiatives

The Newfoundland government is ramping up its R&D and innovation support efforts with two new strategic initiatives aimed at strengthening the research base and accelerating the industrial output of key technology. Conceived within an environment of booming oil revenues, the two programs pump $53 million over five years into a host of targeted initiatives ranging from academic research to global marketing for rapidly growing companies.

The initiatives help to flesh out A Blueprint for Prosperity — the province's innovation strategy released in 2006. They also underscore the importance Newfoundland is placing on energy and ocean technologies, as well as the role played by Memorial Univ – by far the largest research engine in the province.

The strategy is explicitly focused on increasing Newfoundland's R&D performance, which currently is about half the Canadian average with particularly weak performance by the private sector. That will almost certainly change as new and forthcoming provincial initiatives come on stream and R&D funding related to oil and gas revenues pumps more money into collaboration between business and academia. The challenge is to ensure there is enough public and private capacity and skilled personnel to effectively utilize the new monies, hence the strategy's focus on dramatically boosting business R&D performance.

At the core of Newfoundland's innovation strategy is Research and Development Corp (RDC), a new arm's length Crown agency armed with a first year budget of $25 million. The RDC assumes the delivery of the provincial Industrial Research and Innovation Fund (IRIF) as well as two new programs directed towards business – R&D Vouchers to improve access to research facilities and expertise and R&D Proof of Concept for taking products, processes and services closer to market.

Initially called the Newfoundland and Labrador Research and Development Council, the RDC will have an advisory board and the ability to both protect commercially sensitive information and carry forward and manage its own funds.

Further programs are under development that will target specific sectors including ocean technology and energy – the two industries upon which Newfoundland hopes to build vibrant new industries with global reach. Future funding will come in the form of annual calls for proposals for multi-year awards focused on the needs of industry.

The IRIF – which has a $10-million budget and was established five years ago as a matching mechanism for Canada Foundation for Innovation and other federal funding bodies – will be enhanced to move beyond simple leveraging in the academic space. New functions will include targeted research awards for undergraduate and graduate students and funding for collaborative research at the local, national and international level, as well as research chairs and embedding academic researchers in industry.

"We were created as an entity to get out there and be an active player. Our genesis or our origins stem from the (2006) strategy ... There are three things we learned from our consultations: you have to be timely, we have to protect commercially sensitive information and we have to be flexible," says RDC CEO Glenn Janes, a Newfoundland native who was repatriated from Imperial Innovations Group plc in London to head up the new organization. "Our legislation is probably one of the most robust pieces of legislation for a Crown corporation in this province and on some measures in the country."

flexibility is key

RDC's flexibility is a key hallmark that the province hopes will enable the agency to accelerate and respond to the development of key evolving sectors, stimulate collaborative research, build capacity and generate strong return on investment. And while policy development falls outside its area of jurisdiction, it has the scope to provide advice to government and in some cases even champion issues where it perceives particularly promising opportunities.

But perhaps the biggest opportunity lies in the area of communications, both between the sectors in the provinces and externally.

"We are to be the focal point, so those who do R&D within the province will look to us and see us as that entity. We should also be that entity for those outside the province," says Janes, adding that the potential for advances in tech-based business has never been brighter. "As a province, we are probably at a seminal moment in our recent history with an opportunity, a confluence of events that happened that have positioned us to make a real sizeable change in what this province looks like and what its future is. … Economically the province has turned a corner but I think more importantly, the mindset of the population has changed philosophically, the expectations have changed and there's an incredible opportunity for a lot of positive changes."

Ocean Tech Strategy

The second major new R&D initiative is Oceans of Opportunity: Newfoundland and Labrador's Ocean Technology Strategy, a $28-million, five-year strategy to boost the number, size and scope of businesses developing various ocean technologies.

Positioned further downstream than the RDC, the Ocean Technology Strategy (OTS) aims to further stimulate the sector which is already experiencing rapid growth. Between 2001 and 2005 the number of companies increased 57% from 3 to 51, including the creation of 16 new firms. Private sector revenue doubled during the same period to $230 million and the OTS aims to quadruple that amount to $1 billion by 2015. It will also issue a new report detailing the sector's growth from 2005 to 2009.

Developed within the Department of Innovation, Trade and Rural Development (DITRD), the OTS relied heavily on input from OceansAdvance Inc (OAI), a regional cluster initiative aimed at making St John's an internationally recognized centre for ocean technologies.

"We set a target of $1 billion for the sector but some companies feel we could exceed that. The province has endorsed the discussions they have heard in the community and the new provincial money goes hand in hand with the needs and opportunities in the cluster," says OAI executive director Les O'Reilly. "The ocean technology cluster is one of the fastest growing sectors in the province and has tremendous potential to grow. It's a pervasive economic opportunity and a major building block of future economic growth."

The OTS offers a suite of programs designed to stimulate sectoral growth across the spectrum of company formation and growth from business incubation and industry-university R&D collaboration to support for industrial R&D projects and international marketing assistance.

The cluster currently has technology strength in several areas including fisheries, vessel safety and security, fishing gear, ocean observation and monitoring and simulation.

"The RDC is positioned at the leading edge of technology while the OTS is further down the life cycle," says a provincial government official. "The market for these technologies is exclusively global markets."

While the strategy is firmly focused on the private sector, it draws on provincial and federal strengths in ocean technology resident in the province. This includes the National Research Council, the Department of Fisheries and Oceans and Memorial Univ, which is increasingly aligning its programs with ocean technologies, energy and oil and gas.

"It makes sense that we align our research objectives to the province so our emphasis is on oceans and energy — areas that the province wants to grow," says Dr John Quaicoe, dean of Memorial's faculty of engineering and applied science. "It's important and provides great opportunity for us."

Quaicoe says his faculty has been adding elements to its programs to reflect emerging business and employment opportunities, such as oil and gas options for students.

"The faculty has responded to growth in that sector. Chemical engineering has experience sustained growth in the past three or four years and part of that is because of the growth of the oil and gas sector in the province. Chemical engineering has about 90 students and half are taking the oil and gas option," he says. "We've also established an industrial outreach group to connect with the community. There may be a small company wanting to try out an idea. We can identify expertise in the faculty to help them and give them the ability to continue to generate more wealth."

Memorial is also increasingly attuned to the needs of the ocean technologies sector and is hopeful that the new sectoral strategy will provide new opportunities. Quaicoe says his faculty is currently examining federal S&T priorities as part of updating its research plan and is finding that many of the priorities are already being addressed.

"It's not a question of trying to re-direct our efforts to those priority areas. We have already been working in those areas and now the provincial and federal governments are recognizing them as areas of importance, which align with what we've been doing ... We've also been doing quite well in the area of encouraging entrepreneurship (and) we'd like to put a bit more emphasis in that direction."

O'Reilly credits the Atlantic Canada Opportunities Agency and its Atlantic Innovation Fund with providing major stimulus to the growth of the ocean tech cluster

"AIF has been instrumental in projects and innovation helping this cluster grow. It's a founding piece and is helping build critical mass," he says.

Quaicoe agrees, adding that the AIF program combined with the provincial IRIF funding has had a dramatic impact.

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