Conference explores how natural resources can benefit from greater innovation

14th Annual RE$EARCH MONEY Conference

S&T performers and policy makers from all sectors need to breathe life into the federal government’s new Science, Technology and Innovation (STI) Strategy and a policy review of the tax credit system for corporate R&D performers is long overdue. Attendees at last month’s RE$EARCH MONEY conference heard that without concerted action on several innovation fronts, Canada’s productivity and competitiveness will continue to languish relative to the US.

“Canada has no innovation targets, GERD-to-GDP (gross expenditures on R&D as a percentage of GDP) is declining, there’s too much indirect support for R&D and little support for going global,” said keynote speaker David Watters, CEO of Global Advantage Consulting Group Inc and a former DM at Finance Canada. “Is this the path we want to be on?”

Watters noted that, of the top 100 companies tracked by the Globe and Mail, 524 were in the natural resources and energy sectors, accounting for 26% of corporate revenues. Several speakers over the course of the two-day conference examined how innovation can be leveraged to build on Canada’s natural resources advantage.

The issue was confronted by John McDougall, president of the National Research Council (NRC) and a veteran administrator of resource-based research and innovation. McDougall said that, while the earth is not running out of resources, the environmental degradation caused by their extraction requires a holistic approach “supported by the right bundle of technologies”.

“Canada is loaded with resources. Technology extends food production and allows us to exploit lower grade resources,” said McDougall. “The challenge is that it brings other issues to the table (the environment and recycling) … Bio-mimicry is a whole cycle systems approach to resource use in which solid waste and sewage are major resources. We have an obligation but there are huge challenges.”

McDougall said the reorientation of the NRC into a research and technology organization is helping to contribute to such an approach.

“We have to get beyond throwing stones and address the issues,” he said.

Achieving sustainable, environmentally benign resource extraction requires a coherent set of interlocking strategies, policies and regulations under which companies can effectively operate. The conference heard from the trenches with a panel comprised of three company executives from firms providing high-tech products and services to the natural resources sectors. While each firm has had success in its own market niche, the executives made it clear that more can be done to establish an operating environment — strategic, regulatory, fiscal and finance — that facilitates innovation.

Innovation challenges

“We’ve been doing the Internet of Things since the mid 1990s — data platforms, data analytics, quantum computing —to measure, monitor, build predictive algorithms and generate profits,” said Alison Sunstrum, co-CEO of GrowSafe Systems Ltd, Airdrie AB, which develops automation solutions for the livestock research, feedlot and dairy industries. “Financing was tough. We need to take some of that tough away from entrepreneurs ... We invested $12 million in our products and we were self-funded because we couldn’t get funded. Now that we don’t need it, there are offers from everywhere.”

Sunstrum said the Industrial Research Assistance Program and the Scientific Research & Experimental Development tax credit program have been “our life blood”. But she contended there remains a gap in R&D funding between basic research and product development. Sunstrum also lamented the fact that her first customer was from the US rather than Canada.

Breaking into traditional markets is also a challenge for companies like Ensyn Technologies Inc. The Ottawa-based firm develops and produces cellulosic biofuels that replace petroleum products by converting non-food biomass from the forest and agricultural sectors into high yields of light liquids. That makes the first customer critical to achieving market penetration.

“We desperately need procurement but it’s very difficult to get my product into a government facility,” said Ensyn president David Boulard. “Our first customer was also in the US. The US renewable fuel standard is a great tool for entering the market. It provides a period of time when market variations are being worked out.”

Tapping into Aboriginal talent

Securing talent remains a major challenge for the natural resources sectors as activity is often located in remote, thinly populated parts of the country. Capitalizing on Aboriginal talent therefore is an increasingly pressing necessity.

JP Gladu, president and CEO of the Canada Council for Aboriginal Business, spoke of the Progressive Aboriginal Relations (PAR) certification program that provides Aboriginal-led companies with third-party verification of their business bona fides.

“We need procurement to acquire more aboriginal talent. Indians have been on forced hiatus from business but now we’re coming back,” said Gladu. “There are systemic barriers and issues with a heavy weighting in the liability column. How do you move them into the asset column? Expand immigration programs and funding into Aboriginal communities.”

The great R$ Debate

The conference also featured a debate on the issue of whether Canada’s innovation policies are too narrowly focused on R&D, pitting Dr Catherine Beaudry, Canada Research Chair in the creation, development and commercialization of innovation at École Polytechnique de Montréal against Paul Dufour, adjunct professor at the Univ of Ottawa’s Institute for Science, Policy and Society.

Dufour took the opposing side and outlined a number of key measures that underscore the central importance of R&D in the innovation ecosystem, which Beaudry said merely clouded the issue. She asserted that Canada needs to move away from a linear approach to innovation and embrace all disciplines, not just the so-called STEM (science, technology, engineering, mathematics) fields.

“We need to view innovation as a system. Not all comes from STEM,” she said.

Beaudry’s arguments for the motion carried the day with the vast majority of delegates voting in its favour.

The next RE$EARCH MONEY Conference will be held March 29-30, 2016.

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