Pending ITAC-SMC merger promises to inject heightened visibility and lobbying muscle into microelectronics sector

The Information Technology Association of Canada (ITAC) is set to absorb the Strategic Microelectronics Consortium (SMC), expanding its representation to include the critical electronic components sector. The decision to recommend a merger was made by the SMC board of directors on October 25, with a vote of the membership slated for November 23. If approval is granted, SMC will retain its acronym and become known as the Strategic Microelectronics Council, operating as a distinct entity within ITAC.

The move comes during a time of significant contraction within the semiconductor industry and is being viewed as an attempt by ITAC to widen its scope as it continues to rebuild the organization and add muscle to its lobbying activities. SMC has 42 members compared to more than 300 under the ITAC banner and SMC firms will likely be given four seats on ITAC’s 32-person board of directors. The pending merger also underscores the impact of the two-year eMPOWR lobbying effort. The proposal to boost the flow of skilled personnel to the eMPOWR industries has drawn heavily on SMC’s limited resources and exposed its relative inexperience with mounting effective public policy campaigns (R$, October 10/01 and December 20/00).

Despite the backing of the industry and a war chest of $500,000 for 2000 alone, SMC had been unable to convince Ottawa to fund eMPOWR (microelectronics, photonics, optoelectronics, wireless and radio engineering) to the tune of $500 million over five years. SMC’s financial reserves have been largely depleted and members are becoming frustrated by the lack of progress. They have reduced their financial and time commitments just as the eMPOWR campaign was entering a critical stage.

“There was frustration there and most of the players involved had not embarked on this type of campaign before,” says SMC board chair Dr Andy Mollozi. “There was a build-up and it was aimed at a target — the (2001) Budget. When that didn’t happen, there was a revamping of the strategy… Then we realized that the government was trying to create an innovation paper so we began working on the inside.”

eMPOWR’s quiet slide off the radar screen coincided with SMC’s decision to seek a partner for the campaign and marked the beginning of quiet negotiations between the SMC and ITAC boards. ITAC president Dr Gaylan Duncan first proposed the merger last spring when SMC approached the trade association seeking help with its floundering eMPOWR campaign. Although SMC continues to devote some resources to the initiative, the campaign has been adopted by ITAC and forms a key part of its recently released white paper — Toward A Culture of Innovation (see page 4).

In ITAC’s literature and presentations, however, the eMPOWR moniker has been dropped and replaced by a more generic pitch to invest strategically in the university disciplines underpinning the microelectronics and software sectors.

The move into electronic components coincides with efforts to seek increased penetration of the Internet and Internet intermediary industries. In September, PSINet Ltd, one of the world’s largest Internet service providers (and a subsidiary of Telus Corp), became an ITAC member.

“ITAC represents a specific sector but sectors seem to be converging. There will be no name change and SMC will keep its logo but it will be a division of ITAC,” says Duncan. “The original eMPOWR proposal was carrying a lot of baggage and … we didn’t think it was getting on the agenda. We offered to help and since then we’ve got it before a lot of Cabinet ministers and deputy ministers.”

The recent MOU between eMPOWR Canada and the Natural Sciences and Engineering Research Council (NSERC) is an extremely positive development that has helped to revive the campaign. Duncan says that the government is much more open to devote new funding if it does not entail the creation of a new entity. If the MOU is implemented, a NSERC Innovation Platform (NIP) would be created to handle the funding, which would flow through NSERC to universities and colleges.

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