Alberta Innovates consolidates into single vehicle for research and commercialization

Province's flagship R&D program

Alberta Innovates (AI) is getting a major makeover with the consolidation of its four, six-year-old corporations into a single program for research and commercialization. The move follows a $44-million reduction in funding for AI in the latest provincial Budget and extensive consultations with stakeholders from AI board members, entrepreneurs and academia.

The consolidated AI furthers the province's ongoing efforts to shift from an S&T push agenda to one in which outcomes are paramount while ensuring that the benefits stemming from its resource wealth are translated into a diversified knowledge-based economy.

Earlier this month, the government introduced legislation to enact the change and appointed new board members for the consolidated corporation who will stay in place once the transition is completed. In the near term, the new AI board will be dealing with the fallout from the budget cuts and the current CEO will remain in place to assist in the transformation.

Collapsing oil and gas prices have laid waste to Alberta's economy, prompting the government to project a $10.4-billion deficit for FY15-16 and $10.1 billion next year, with the prospect of continuing red ink for years to come.

"The AI board will look at how we can mitigate the cuts for current projects and minimize the impacts," says Deron Bilous, minister of Economic Development and Trade and deputy government house leader. "Alberta traditionally has high R&D expenditures but (the cuts) reflect the financial situation Alberta finds itself in."

Several reports, including a 2013 expert panel established by the then Minister of Innovation and Advanced Education, recommended the consolidation, citing client difficulty in finding the appropriate source of assistance and the lack of synergies between the four corporate entities — Health Solutions, Bio Solutions, Energy and Environment Solutions and Technology Futures.

Dr Pam Valentine, CEO Alberta Innovates – Health Solutions, will serve as AI's transition CEO while Judy Fairburn, board chair of AITF, becomes the board chair of the new entity. A search for a permanent CEO is expected to yield results by the fall.

"The idea for a single organization has been around for a while. Even when Alberta Innovates was created, there was a recognition that you could not get there in one step," says Valentine. "With AI, some things worked really well but there were some criticisms. Many said the system was hard to navigate."

With the consolidated AI, which accounts for 43% of the $392 million the province spends on R&D annually, the province is clearly aiming at achieving efficiencies while curbing costs. It's estimated that the reduction in the executive ranks alone will save $2 million. Less clear is the impact on staffing levels and on the amount of grants disbursed. In FY14-15, AI grants totalled $160.7 million.

"The intent is to create a one-stop shop (to) drive needs-based innovation, both push and pull. We're working closely with the department on policy drivers and how they inform policy decisions," says Valentine. "In Alberta, there are challenges to the amount of change that has occurred. We want to engage the staff to chart the future ... There's a sense of value for all that came before us."

Applied research services subsidiary

The bill also calls for creation of a new applied research services subsidiary that will provide the research function of the old Alberta Research Council. ARC became part of AITF in 2009 when the province consolidated 10 S&T-focused organizations into four.

"Feedback told us that research project funding should not come out of the same organization as the commercialization and applied side so we've divided it into two decision-making bodies to avoid a perceived conflict of interest," says Bilous. "The restructuring is intended to make the system as efficient as possible ... to support companies and create jobs but also support basic research."

While AI waits to become a legal entity, work has begun on administrative and operational fronts to eliminate significant differences in how each of the four corporations are structured and operated.

"The corporations were quite different and have different backgrounds. Technology Futures included testing and scale up and had a different structure and staff," says Valentine. "We want to synergize the IT (information technology) backbone and do the same with human resources and investment systems."

The new AI will also have new performance measurement systems, which Valentine says will leverage the model developed for AI Health Solutions under the leadership of the late Dr Cy Frank.

There is also discussion over how the new organization will handle the $44-million, 13% cut delivered in the Budget. AI now receives $169 million through the ministry of Economic Development and Trade, augmented with money from contract research and other sources raising total annual funding to approximately $300 million.

Despite the economic shocks Alberta has suffered in the past two years, there's optimism that leveraging the province's research, innovation and entrepreneurial strengths will go far towards achieving a long-term turnaround.

"We're hopeful there's an opportunity to strengthen the research agenda in the province, to improve the research and innovation environment and attract more investment and activity," says Valentine. "This is being driven at the highest levels of government — the premier's office and by a great minister who understands the portfolio and the challenges. They understand the role of research and innovation in diversifying the economy."

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