Set to emerge as full-fledged RTO

The National Research Council (NRC) is on the cusp of rolling out its new portfolio and program offerings to position the organization as Canada's answer to Germany's network of Fraunhofer institutes. With a beefed-up Industrial Research Assistance Program (IRAP) and a growing contingent of business-focused personnel, it will soon unveil the most ambitious transformation in its 97-year history, aimed at boosting the productivity and competitiveness of Canadian industry.

Few details have been publicly released on the transformation of the NRC into a research and technology organization (RTO), although the strategic plan it's currently executing was developed in 2011. That will all change this spring when the government officially announces the new structure, complete with revamped business lines and operating divisions. The unveiling is designed to send a strong signal to businesses — both large and small — that the NRC is positioning itself as a credible, multi-disciplinary partner for technology development and exploitation.

"Everything in the organization has changed. We've rebuilt every business support system, accounting system, performance management system and project management system, so everything's at play and has been for the past couple of years," NRC president John McDougall said in an exclusive interview with RE$EARCH MONEY. "Our job is really economic development through industry and technology and innovation. That's the part (of the innovation ecosystem) that we support and that's been our mandate for a long time … We may have drifted away from it but we're drifting back to the sweet spot where we can have the most value."

Throughout the long process of gaining approval for the new strategy plan, the federal government has continued to support the NRC, re-purposing funding for its sunsetted cluster strategy and doubling IRAP's budget for assisting small- and medium-sized enterprises (SMEs). Recently released estimates show a significant increase in NRC's budget from $698.5 million in FY11-12 to $852.3 million in FY12-13. The estimate for FY13-14 is $820 million but that's before new funding was announced in the most recent federal Budget (R$, April 3/13).

"The bottom line is, (the budget) is going up. My takeaway from it all is that we are clearly seen as an important part of the productivity agenda," says McDougall, who was recruited in early 2010 to overhaul Canada's most venerable S&T institution. "The IRAP program received a significant bump in the (2012) Budget … and the interesting thing is, the Budget made a change in the base — rather than a time-based commitment — which is really nice. So the base budget stays high."

strategic focus

There's no doubt in McDougall's mind that the NRC was ripe for change. When he arrived, he took the helm of a major S&T enterprise that he says was many things to many people but lacked a cohesive focus to drive forward its mandate.

"We had institutes, we had centres, we had clusters, we had all kinds of stuff. And they were all sort of intertwined and nobody was quite sure what they all were but they were exciting," he says. "The portfolios were notionally in place as of last year ... We're close to the point where we can now say we understand but it's not pervasive throughout the entire organization. The leadership has come to grips with it and it's slowly working its way down. The time when people will learn is when they are doing — then it becomes real. We're probably 50-60% there."

The transformation has not been without controversy. With the elimination of the institute structure, many former DGs chose to leave the organization while others were dismissed when certain lines of business were discontinued. The most contentious was the decision to cease R&D on magnetic resonance imaging (MRI) at the former Institute for Biodiagnostics in Winnipeg and the sale of its custom-made building.

all operations must meet mandate, criteria

McDougall says the viability of all of NRC's activities were examined from the perspective of interest to industry, strategic alignment with Canadian needs or ability to capture the benefits of the R&D. Programs that failed to meet those criteria were closed downed.

"Part of what we're trying to do is recognize the reality of today. Things are not really disciplinary, they're multi-disciplinary. You want solutions, you don't want components. You want things you know are going to work together as a system, not grind each other's gears. That's a totally different mindset than we've had and it requires people to start thinking way more collaboratively than they have historically. It's about us, as opposed to me. It's about our customers as opposed to us. It's about benefit to Canada, not about publication. It's a huge, huge culture shift." — NRC president John McDougall

"We've essentially moved out of the MRI business. But that's not a reflection of whether life science is important or not. It's a reflection of the fact that we were doing some work that didn't make a lot of sense for an organization that's trying to stimulate the Canadian economy," he says. "It was intellectually interesting and it had some great international benefits but there were limited benefits to Canada and it was quite academic in nature. So we pushed that off and said ‘that's not our business.'"

NRC is also pulling back from some of its information technology R&D, much of which was undertaken in cluster initiatives established over the past decade. McDougall says there is well-established capacity in many areas of IT with players other than NRC doing essential development work.

The closure of operations across the country has led to concern within some provincial governments, as many have made their own investments to leverage NRC's presence and funding. While it's understandable for provinces to resist the withdrawal of NRC operations, McDougall says continuing activity must pass the criteria for demonstrating relevance.

"No government ever wants to see us shut things down but I would argue that if there's a national leverage, and there's really something that has staying power, the likelihood is it's not going to end anyway," he says. "The things we do have to matter to Canada and obviously matter to different regions ... How you get there is by talking to people — industry and governments both — to find the areas that matter."

Those kinds of discussions led to the creation of four major platform programs — printable electronics, algae as a CO2 solution, biocomposite materials and resilient wheat — that have leveraged as much as $400 million in industry commitments (R$, November 11/11). McDougall won't discuss specific firms yet but says the platform programs are all close to launch.

"There's nothing magic about (the number) four. There were 20 odd ideas that were pushed through the system to see whether they had any staying power and four of them emerged," he says. "They're all quite different but they all have the potential to make a really big impact in their sectors."

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