Alberta Innovates-Tech Futures restructures to enhance R&D service delivery to industry

Prompted by budget cuts, efficiency gains

Five years after its formation, Alberta Innovates – Technology Futures (AITF) is restructuring to further its objective of becoming more industry focused. The internal reorganization seeks to overcome barriers to other players in the provincial innovation ecosystem and comes as AITF learns how to do more with less, as the province's finances experience a dramatic reduction due to falling oil and gas prices.

"The new operating model is 95% complete. We'll roll it out April 1st although there will be continuing refinements," says Cory Fries, AITF's VP corporate and legal services.

AITF is part of the larger Alberta Innovates (AI) system which features four board-governed organizations overseen by the Alberta Research and Innovation Authority (ARIA) — an advisory body formerly known as the Alberta Science and Research Authority. The corporation has 640 employees including 130 with C-FER Technologies, a wholly owned subsidiary of AITF providing technological and engineering expertise to oil and gas and pipeline operators. It reports to the Ministry of Innovation and Advanced Education, led by minister Don Scott and DM Marcia Nelson.

AI was implemented in 2010 to address the ad hoc proliferation of S&T organizations through the province, reducing them from 10 to four. AITF is established by combining the former Alberta Research Council, iCORE, NanoAlberta and Alberta Ingenuity and focuses primarily on five industrial sectors: oil and gas, environment, food and fibre, health and pipelines.

AITF's restructuring will be assisted by a new collaboratory and roadmap designed to align its planning and programs. Each AI corporation has a collaboratory with Alberta Innovates – Health Solutions serving as a pilot for the past year.

Sporting three horizontal axes for basic research, applied R&D and commercialization, AITF offers services along the innovation spectrum including a suite of programs aimed at small- and medium-sized enterprises (SMEs) (see chart).

"The SME programs have been recently refined to make them more flexible. We're very proud of those revisions," says Fries. "They target the more high-risk areas (of R&D and innovation) … We have technology development advisors throughout the province who work with and mentor companies, helping to guide and connect them through the Alberta Innovates system and the whole Alberta ecosystem."

Given AITF's strong industry focus, the recent collapse of oil prices and continuing low gas prices have had a negative impact on its contract revenue. AITF's support from the province was also reduced in FY13-14 during the so-called bitumen bubble, caused by a glut in the US oil market and difficulties getting Alberta oil to overseas markets resulting in a lower price for its product.

The cut left it with a FY14-15 budget of $96.6 million. Fries says the corporation has anticipated a further reduction of about 5% for FY15-16 with its board scheduled to discuss it later this week. (The province tabled its Budget March 26th).

But officials say the latest restructuring is not just about reacting to lower fee-for-service and contract R&D revenues, which account for approximately 40% of AITF;s revenues. It's also about making the system more efficient and coordinated. That includes discontinuing several lines of services where demand is weak and shifting resources to higher demand areas of R&D. Earlier this month, the shift in resources led to the elimination of 28 positions in the areas of analytical services and administration.

"This is a new operating model to systematize our services and draw the (four original) organizations together ... Before they operated as separate business units," says Fries. "It's more industry-focused and aligned with our investments.

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