Use defence procurement to boost innovation:?report

A new report contends that the majority of Canada's planned spending of $240 billion over 20 years on defence procurement can be used to boost domestic industrial innovation, productivity and competitiveness if Ottawa rapidly implements a comprehensive strategy for buying Canadian. It is recommending an initial list of six clusters of key industrial capabilities (KICs) followed by changes in government procurement policies and programs that support defence R&D and technology transfer.

Entitled Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities, the panel reported to the minister of Public Works and Government Services and was headed by Tom Jenkins, executive chairman and chief strategy officer for Waterloo-based Open Text Corp and the lead of a previous report on procurement (R$, November 11/11).

While acknowledging that most prime defence contractors are foreign-owned, the report recommends that all bidders for new contracts specify how their proposals "will add to Canada in KIC areas, based on factors such as technology transfer and IP (intellectual property) retention, in-country innovation, global product mandates, development of specific skills and training and future overall economic impact". It further recommends establishing incentives for a special "KIC track" for the planned military component of the Canadian Innovation Commercialization Program (CICP).

The report acknowledges that identifying KICs was inhibited by a lack of data and appropriate analytical base but nevertheless included an "initial set of KICs to inform pending decision-making" followed by a robust review to determine their validity and whether changes need to be made.

The six initial KIC clusters being proposed are: arctic and maritime security, protecting the solider, command and support, cyber-security, training systems and in-service support.

The report estimates that of the $240 billion in spending committed by government through its Canada First Defence Strategy, decisions have not been made for $48 billion in $60 billion worth of equipment spending. Another $116 billion of the $140 billion committed to defence readiness remains unallocated. The government is developing a response to the report's recommendations.

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