08.12.2017

Does Ottawa’s supercluster program go far enough?

Does Ottawa’s supercluster program go far enough? 

The Liberals have announced the criteria for the “superclusters” they say will help get Canada’s research ideas into the global marketplace and combat the country’s weak international innovation and competitiveness standings.

The federal government has slated $950-million to fund these superclusters, which will be made up of consortia of research institutions, businesses, and other partners that will compete for these funds based on their ideas to commercialize research and form businesses in sectors such as agrifood, clean technology and health sciences.

But while this announcement is considered a positive step among industry and research institutions alike, there are still questions about whether the money is getting into the commercialization pipeline early enough.

 

Superclusters are “really designed to get our ideas to market more quickly and commercialize these ideas in a manner that generates revenue and creates jobs,” Navdeep Bains, minister of Innovation, Science and Economic Development, told The Globe.

He explains that “the overarching view is how do we bring all the key individuals and people together that are responsible for [commercializing research].”

Superclusters are “good news,” according to Paul Preston, director of science, technology and innovation policy with the Conference Board of Canada.

“We have recommended for years a firm-centric approach to this [commercialization] challenge because we need to get ideas into the hands of companies and let them work on it and fund those ideas,” says Mr. Preston. “The challenge we have in Canada, as we move from discovery research to developing those ideas, [is] to try and align them with the market needs and grow and scale up a company.”

Canada ranked ninth out of 16 peer countries and earned a subpar grade of “C” on innovation, according to the Conference Board’s 2015 Innovation Report Card. It also slid to 15th place on the World Economic Forum’s 2016-2017 Global Competitiveness Index, down from 13th the year before.

A key component to the supercluster criteria, according to Mr. Preston, is that these groups must be business-led. For him, universities “are about teaching and education and research, they’re not set up to be commercialization engines.”

But those in Canada’s universities say that innovation spending needs to happen at the research level to capture the interest of the business community and some are still “holding out hope” there will be more money in the government’s innovation plan earmarked for them.

Scott Inwood, director of commercialization at the University of Waterloo, acknowledges this is the “crown jewel” of the government’s plan, but says it’s an industry-led initiative and it doesn’t address – nor was it meant to – the challenges at the initial stages of development.

“When I read the announcement, it said it was a major component of their plan, so I’m still guardedly optimistic that there will be a future element addressing the other end of the spectrum at the very early stage [of commercialization] and some attention spent at our level,” says Dr. Inwood, who has some ideas of where early-stage funding is needed.

Alongside the plan for superclusters, this year’s budget announcement hinted at creating the Canadian equivalent to the Small Business Innovation Research (SBIR) program in the United States – which gives money to small businesses for R&D – and Dr. Inwood supports this move, but thinks it needs to go a step further.

For him, the kind of program that is needed is similar to the small business technology transfer (STTR) program – a companion to the SBIR program that exclusively provides funding to small businesses that are associated with research institutions in the initial stages of development.

“I would actually advocate that a Canadian STTR go even further and allow up to 80 per cent of the funding awarded to be conducted at universities,” he says.

He defends this funding for universities saying these institutions act as a type of “angel investor,” looking at market viability at an idea’s embryonic stage – a stage that most businesses wouldn’t bother with. But questions surrounding market viability need to be answered at this level, explains Dr. Inwood, and answering these questions often requires some kind of applied development. This, in turn, requires money.

Without external funding, universities will not be able to foot the bill for this initial phase. He suggests focusing future government innovation cash at this early-stage testing to make sure these ideas will be of interest to a business that can then develop it with R&D dollars.

David Wolfe, co-director of the Innovation Policy Lab at the University of Toronto’s Munk School of Global Affairs, says the information around early-stage research funding is “vague.”

He explains that the government is “going to have to give the consortia that are currently forming clearer direction and criteria about what stage of research these federal investments will be going into.”

Other countries, such as Germany, the United States and Britain, have had similar programs for years. “I think we’re just playing catch-up at this stage,” says Dr. Wolfe.

He admits he doesn’t think superclusters are going to solve all of Canada’s innovation challenges, “but every program like this – if it’s well designed and well implemented – is certainly a step in the right direction