Precarn seeks to become dominant delivery agent for ICT business assistance

Aligned with Digital Economy Strategy

A proposal to align Precarn activities with those of the forthcoming Digital Economy Strategy (DES) is being seen as a last-ditch attempt to save the 23-year-old collaborative R&D program from extinction. Currently operating on a one-year, $5.5-million extension provided in the 2010 Budget, Precarn is now proposing that it expand activities beyond its traditional realm of robotics and intelligent systems to embrace the full spectrum of information and communications technologies (ICT) with funding of $75 million over five years.

The Precarn proposition builds upon a unique collaborative model in which every funded project includes an industrial end user, beta test bed user and a university researcher, resulting in a high leverage factor and a long track record of commercialized R&D. By targeting under investment in ICT — a key weakness in Canada that translates into marginal productivity gains — the proposal appears to speak directly to the federal government's DES and its objective of growing the number of R&D intensive ICT firms by focusing on customers and market pull rather than technology push.

A final business plan will be submitted to Industry Canada this fall with a proposed new program launch in April/11.

"Precarn was renewed for one year and the rationale behind that extension was that Precarn be viewed through the lens of the government's Digital Economy Strategy," says Dr Henri Rothschild, Precarn's president & CEO. "The changes we are making are very compelling … It's directly related to the Digital Economy Strategy. It's effective and it leverages additional funds."

The Precarn proposal dovetails nicely with the findings and recommendations of the submission to the DES by the Council of Canadian Academies (CCA). In its report — Catalyzing Canada's Digital Economy — the CCA calls on policy makers to "find a way to induce greater and quicker uptake and application of ICT" by smaller companies to reduce what it calls the ICT gap and "increase the size and competitiveness of ICT-producing subsectors". The report also recommends the creation of a Digital Transformation Assistance program (DTAP) modeled on the National Research Council's Industrial Research Assistance Program (R$, July 30/10).

Whether Precarn can become the CCA's proposed DTAP or its delivery agent will be a bigger decision made by the government as it formulates the DES and puts forward recommendations for the next Budget. Rothschild notes that while the Precarn model is somewhat different than IRAP, it is complementary in many ways and could help to boost Canadian commercialization efforts and productivity should the government choose to enhance direct support for innovative business.

"My understanding of the R&D Review is that it starts with an analysis of our tax versus non-tax ways of promoting industrial innovation," says Rothschild. "Within that, it will look at the relative balance and efficiencies of the instruments used for achieving our results."

An expanded Precarn would extend its technology focus beyond robotics and intelligent systems to embrace a broad array of ICT technologies and deliver its services through four proposed programs:

* Technology Gap (T-GAP) Program — to increase the commercial readiness of new technologies and reduce risk for adopters and investors. R&D grants from $75,000 to $250,000 would target small firms and fund industry-led, pre-competitive R&D activities through prototype development, design refinement and market research;

* Application Gap (A-GAP) program — to stimulate the adoption of "productivity-enhancing" ICT technologies in priority sectors such as life sciences, environment, energy, ICT and public safety. R&D grants from $100,000 to $500,000 to fund solutions to specific end-user problems. Leverage will be achieved through partnerships with private and public sector organizations such as IRAP, Business Development Bank of Canada the I2I program of the Natural Sciences and Engineering Research Council and the Canada-California Strategic Innovation Program;

"The $75 million in requested Precarn funding for 2011-2015 is expected to generate over $281 million in total project value over 321 new R&D projects, producing at least 400 new products on the market or in the development pipeline, directly engaging almost 1,100 highly qualified people and producing at least $389 million in net economic benefits for Canada."

— Discussion Paper for a New Precarn Program

* Government Gap (G-GAP) program — R&D funding enabling government to test new technologies directly in their work environment. Grants from $100,000 to $250,000 will bring together small firms and public sector lead clients in product experimentation or trial within the public sector;

* Partnership Gap (P-GAP) program — to facilitate new partnerships, R&D business collaboration and a well-connected ICT community interest by boosting the innovation capacity of small ICT firms and growing the sector. Grants would span $25,000 to $100,000.

The proposal for an expanded Precarn is not the first time the organization has made a bid to play a larger role in innovation and commercialization. In 2004, under the leadership of then-president Tony Eyton, Precarn proposed a major realignment and expansion with a pricetag of $150 million over seven years (R$, June 30/04). That proposal was not funded, however,with the 2005 Budget actually reducing its funding pending the completion of the Liberal government's commercialization strategy (March 9/05) — cut short with the election of the Conservative Party in early 2006.

Precarn's refunding bid last year was also stymied and while it received one year's worth of funding to maintain base operations, the latest proposal is viewed as a last-ditch effort to convince the government of the model's merits and potential within the DES.

"It's one of the more compelling cases that I've ever been involved with. It's both relevant in what the government wants to achieve and relevant to what the nation needs, the national economy needs," says Rothschild. "It's an effective and efficient use of scarce resources and it's a proven formula. We have the system ready to go."

Precarn officials are also prepared for the possibility that a decision on the organization won't be made until the completion of the federal R&D Review, which was announced in the 2010 Budget but whose start has been delayed (see page 4). Rothschild says the R&D Review will likely examine the mechanisms used to deliver innovation assistance and decide whether the current mix is appropriate. He says a multi-faceted delivery program may be the preferred option, grouping initiatives in which the promotion of collaborative research is the common denominator.

"Between us getting what we asked for and zero is a spectrum of possibilities," he says. "That spectrum will be decided not so much by what Precarn is proposing or Precarn's history or structure, but as part of a larger decision."

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