Alberta Budget launches Innovation Program and 20-year plan to incorporate innovation into all sectors of the economy

Alberta has unveiled a new Innovation Program that will pump $34 million over the next three years into projects designed to improve service delivery and encourage innovation in the economy. It is one of the few specific innovation-related initiatives highlighted in the March 24 Budget to include financial information — yet another indication that the provincial government is less likely than other jurisdictions to announce new spending measure within the budgetary process.

“We’re working out the details but the Program will build on innovation within government as well as outside in the not-for-profit sector,” says Glenn Guenther, communications director with the Ministry of Innovation and Science. “It will provide one-time grants.”

Unlike previous Budgets, innovation and R&D are prominently highlighted this year, providing some insight into the province’s approach to building its innovative capacity. Budget documents referred to three new institutes now in various states of completion, reflecting the central thrusts of Alberta’s innovation policy – the Information and Communications Technology Institute, the Life Sciences Institute and the Alberta Energy Research Institute.

Coordination of funding and strategic direction for innovation in the province is the responsibility of the Alberta Science and Research Authority (ASRA), in conjunction with the government ministries and provincial stakeholders.

“It seems as though there is not much there (in the Budget) for innovation and science but the role of ASRA is to get all the departments going in the same direction,” says Dr Robert Church, outgoing chair of ASRA’s board of directors. “There’s a lot of pooling going on to get around the silos. In Calgary and Edmonton, the construction cranes are all on the university campuses.”

20-YEAR PLAN

The strategy of the government becomes clearer when its new 20-year plan is considered. The Ralph Klein government used the Budget to introduce the document, which contains several specific indications of how Alberta wants to build innovative capacity. The four-point plan envisions Alberta in 2025 as a world-leading jurisdiction in which knowledge and technology are dominant elements of its economy. The vision includes ongoing three-year plans linked to fiscal strategy that emphasize cross-ministry initiatives and recognizes the much larger role knowledge will play in future prosperity.

“Alberta’s economy must expand from its natural resource base, enhance the value of manufactured goods and business services produced and venture boldly into biotechnology and the life sciences, nano-technology and other research and development opportunities in order to achieve exceptional growth,” states the Plan.

From an S&T perspective, the first two components of the plan are critical (see box). “Unleashing Innovation” outlines in some detail which areas Alberta is banking on to grow its economy. It acknowledges that innovation is not the exclusive preserve of technology and emphasizes the importance of applying S&T to traditional sectors of the economy – agriculture, oil and gas, forestry and energy. The new Institutes it has created are intended to ensure that no area of the provincial economy is left untouched by S&T.

In the energy sector, the Plan outlines several areas where it sees S&T playing a dominant role, including sands extraction, the marketing of CO2, clean, alternative energy sources, and the integration of feedstock supplies with oil sands upgrading and processing.

VC AND COMMERCIALIZATION REMAIN CONCERNS

The 20-year Plan also focuses on two areas where Alberta is known to be weak: commercialization and venture capital (VC). While refusing to abandon it level playing field, non-interventionist approach to economic development, the Plan implicitly acknowledges that these two areas require public assistance. The Plan only states that the government will develop or implement “mechanisms” and “frameworks” to encourage commercialization and VC investment, presumably continuing its policy of developing state-of-the art infrastructure and information technology capabilities

The singling out of commercialization and VC is significant. They have been the Achilles heel of Alberta’s economy and repeatedly cited by provincial studies, including the recently released Alberta Technology Report 2003 by Ernst & Young. It found that the province’s technology leaders want government assistance for commercialization, as well as R&D and promotion of Alberta as a “technology destination”.

In the area of VC, the Ernst & Young study reports that the situation is improving with the recent creation of several angel investment networks. But it notes the continuing problem of seed capital and suggests that provincial program such as investment tax credits could be useful.

The report also found that Alberta firms are less likely than its counterparts in other jurisdictions to use existing federal assistance programs.

R$