British Columbia’s ambitious innovation agenda being built on shaky foundations

The British Columbia government is ramping up two new organizations that will form the basic structure of its innovation platform for the foreseeable future. Leading Edge BC (LEBC) and the BC Innovation Council — created through the merger of the BC Advanced Systems Institute (ASI) and the Innovation and Science Council of BC (R$, April 26/04) — are being positioned to manage the province’s S&T assets and promote BC as a technology-rich jurisdiction with several clusters ripe for new investment.

The government is also leading the charge in forging stronger ties with the private sector and refocusing its connection points with provincial research institutes, issuing white papers on cluster development and pushing for the creation of an Innovation and Productivity Tax Credit in conjunction with the federal government. And through LEBC, the province is establishing a boot camp for technology entrepreneurs to prepare for meetings with Canadian and foreign venture capitalists.

The Premier’s Technology Council has been prolific in issuing recommendations to the premier Michael Campbell, particularly in the area of venture capital, clusters and marketing and promotion. Indeed, clusters and commercialization have become something of a government mantra, with six technology clusters targeted for promotion.

“I work in six very specific clusters which are defined as having near- and medium-term opportunities … These groups are getting together in a collaborative sense to come up with an integrated strategy,” says Robert Grace, LEBC’s VP economics and research. “We’re also looking at commercialization as something the province should pay more particular attention to. The province has announced the integration of the ASI and the Science Council with a new mandate for technology. That’s the outcome of some of the province’s thinking about the importance of technology commercialization.”

PROVINCIAL ASSETS CUT TO THE BONE

Despite of the upbeat rhetoric, many within the province’s S&T community question the government’s commitment to supporting innovation or at least the role it has defined for government. BC’s overall investment in S&T is declining and its capacity to deliver is being questioned. Concern is rising at a time when a round of 14% across-the-board cuts are being administered, hitting all government S&T spending.

“The (government’s original) goal was to be one of the top ten technology centres in the world in five years, which means in the next year or two. I’ve always been a great believer in having a goal to shoot for because even if you don’t quite get there you make some good progress,” says Michael Volker, director of Simon Fraser Univ’s university industry liaison office and founder of the Western Universities Technology Innovation Fund. “I see the province cutting back in the area of S&T support and that’s a concern because we have a lot that we can do here in the province. But we do need some support … If you’re going to have a goal like that, you need to provide some funding.”

The reality has been very different. Years of budget cuts have laid waste to most S&T programs, including a network of regional centres originally funded by the Science Council. Even the future of the highly touted Science and Technology Fund — which the BC Innovation Council is supposed to administer — is in doubt. Its original $20 million budget was reduced to $13 million in FY03-04 and its current funding is said to be between $5 million and $10 million.

Within government, personnel delivering on the government’s S&T mandate has been decimated. When the current government took power, the 80 staff dedicated to S&T within the Ministry of Competition, Science and Enterprise was cut to 50. When the ministry was disbanded, S&T employees were transferred to the Ministry of Small Business and Economic Development (MSBED), where further layoffs reduced their number to about 10. Similar reductions were experienced by provincially funded agencies like ASI and the Science Council as well as the regional S&T offices it supported. Other institutions like the New Media Innovation Centre (NewMIC) were closed altogether after private sector and then government funding was withdrawn.

“The government has an opportunity to rebuild but they’re starting from scratch because 90% of the capacity they had is gone ... A lot of knowledge walked out the door. It’s a risky time right now with all of these changes because the people they need to make an effective transition to a new way of doing this are gone,” says an S&T observer. “I don’t see the situation as irreparable but I’d say there’s a 50-50 chance right now. We have an opportunity to make a fresh start and really make a go of this. We also have a 50 per cent chance of completely f---ing it up.”

In addition to the work of LEBC, many hopes are pinned on the BC Innovation Council (BCIC), which has yet to emerge as a fully formed entity. While its budget is small — $3.3 annually — it seems to be positioned to take on a host of responsibilities and could become a significant force if funding is increased and a dynamic individual takes over from Cindy Lum, its current interim leader.

“One of the new things the BC Innovation Council will be doing is administering the budgets for all the UILOs (university industry liaison offices), the regional technology networks, BC Biotech and all the NGOs (non-governmental organizations) that were provincially funded and deal with the S&T portfolio,” says the observer. “For instance, the regional S&T offices were originally part of the Science Council but they split off and have their own agenda. Under the changes, you’ll see a lot of those things sucked back in.”

VC INCENTIVES WORKING WELL

The government has been more successful in boosting the amount of venture capital being invested in high-tech companies. Using a mixture of promotion and tax credits, a number of new funds have been established both at the growth and seed stages. Key to its success are changes to Small Business Venture Capital Act and its 30% tax credit. Capped at $20 million annually, the credit helps to leverage $67 million annually in new capital. It actually exceeded its budget in the first year by $13 million.

The success of the program has created problems for at least one smaller fund (see page 3). Weekly updates on on the tax credit’s uptake are now posted on the MSBED website to avoid confusion in the future. MSBED officials are in negotiations with the federal government to launch a shared Innovation and Productivity Tax Credit.

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