Strong industry leadership minus government red tape key to superclusters success
May 8, 2019
Executives participating in Canada’s nascent superclusters say they are seeing unprecedented collaborations happening as a result of this $950-million program, but warn that cumbersome government oversight could drive some companies to ditch the experiment.
“The challenge is making ISED (Innovation, Science and Economic Development Canada) live up to its marketing promise that this is going to be an industry-led initiative and making sure we can do the things that make sense for industry,” said Warren Wall, executive VP, corporate affairs at D-Wave, a quantum computing firm and an industry founder of the Digital Technology Supercluster based in British Columbia.
“If you load it (the superclusters initiative) up with all these policies and procedures and standards that are driven down from the very top, that doesn’t work for a lot of the innovative companies that are out there … if you make it too hard on them, they’re just going to walk away,” Wall told RE$EARCH MONEY delegates attending back-to-back panels featuring supercluster CEOs and senior executives from industry partners.
The cross-sectoral superclusters model is new to Canada and presents some challenges. For example, although all five superclusters now have a contribution agreement with ISED, negotiations are lagging on an intellectual property (IP) strategy for each supercluster.
“IP probably garnered the most attention and energy in our negotiations with ISED for the contribution agreement than most of the other sections of the agreement combined,” said Sue Paish, CEO of the Digital Technology Supercluster. The five superclusters are working together on an IP strategy and are “very, very close” to finalizing it with ISED, she said at the April 17 conference held in Ottawa.
Of course, the five superclusters face other challenges, including saying “no” to some projects, said David Dzisiak, previously North America commercial leader for grains and oils at DowDuPont subsidiary Corteva Agriscience and now chief operating officer at Calgary startup Botaneco, both industry partners in the Protein Industries Canada supercluster.
Government programs for traditional agriculture have typically spread funding thinly to ensure more companies are supported, but too often it’s not enough to make a significant impact, Dzisiak said. The supercluster is a way to make step changes in creating proteins and other value-added products, he added. “We need to be brave and strong and . . . focus on some winners with the projects. We have to really focus on things that can make a change and be impactful.”
Projects launched, support pledged
The Digital Technology Supercluster approved $40 million for an initial seven projects in March, immediately followed by a second call for applications. While the other four superclusters have yet to announce projects, the CEOs and industry partners say the initiative is already bringing together disparate companies and organizations in the private and public sectors.
“Ultimately we’ve got to have some projects that are successful. But from the point of view of collaboration and communication, that’s been successful already,” Wall said.
Moya Cahill, CEO of PanGeo Subsea, an imaging technology company based in St. John’s, Newfoundland, said the Ocean Supercluster in Atlantic Canada “is creating awareness around what’s happening with other technology companies, and in partnering together to be a stronger entity.”
Government agencies and other organizations are also stepping up with support. The National Research Council of Canada is committing about 200 people a year to a dedicated program for each supercluster. The First Nations Technology Council in B.C. is participating to ensure indigenous knowledge is incorporated, and national not-for-profit Mitacs is working with all five superclusters to build partnerships between academia and industry.
Changing Canada’s reputation for innovation
Paish stressed that the superclusters initiative is a “co-investment program,” not a conventional funding program. Companies of all sizes, along with at least one post-secondary research institution and often including not-for-profits, propose collaborative projects. The private sector then puts up funding first for each project approved. The superclusters co-invest once the project consortia partners reach their business plan milestones, Paish said. “We’ve never done that before in Canada.”
“There are opportunities for colleges, universities and research organizations to collaborate, not only with companies but amongst each other,” said Jayson Myers, CEO of the Next Generation Manufacturing Canada supercluster.
A main goal of the superclusters is to help scale up Canadian small- and medium sized enterprises by partnering them with large organizations that can capitalize their technologies and access international markets, said Bill Gruel, CEO of Protein Industries Canada.
The superclusters also are focusing on the talent needed to grow these sectors. Julien Billot, CEO of the Scale AI supercluster, said Scale AI has committed more than 10% of its resources, including $10 million in federal funding and $23 million from the Quebec government to workforce training and post-secondary graduates pursuing careers in artificial intelligence.
Paish noted that the Conference Board of Canada ranked Canada 12th out of 16 OECD countries in innovation. Unlike past government programs, the superclusters will be evaluated less on inputs and much more on outputs, she said. Each supercluster must deliver novel technologies for both the domestic and global markets.
“We have a very small window when it comes to changing our reputation as an innovation nation,” said Kendra Macdonald, CEO of the Ocean Supercluster. “Getting that right will then allow tremendous opportunity.”