National Research Council forges ahead with ambitious commercialization strategy in collaboration with key stakeholders

The National Research Council (NRC) is in the midst of an extensive consultation and strategic planning phase that will help to delineate the organization’s proposed role in commercialization in preparation for the next Budget. The concept of a network of Canada Innovation Centres (CICs) — developed before the last Budget and endorsed by the Liberal Party — remains the central focus of the NRC’s current thinking. But it will likely be positioned within the context of greater collaboration with other key stakeholders with the goal of presenting a unified proposal by the fall.

It has become increasingly evident that no one organization or program will dominate any effective commercialization strategy. It’s also obvious that no country — Canada included –—will be able to successfully bridge the gaps between discovery and the marketplace without government participation that is sensitive, flexible and strategically aligned with other major players.

In an interview with RE$EARCH MONEY, NRC interim president Dr Michael Raymont says his organization’s strength lies in its national reach and the ability to build upon existing mechanisms and programs geared towards enhancing and accelerating the commercialization process.

“NRC can offer facilities across the country and coordinate national programs and has the ability to deliver regionally,” says Raymont. “We need to be partnering with sources of financing and human skills training. We are talking with our political partners to see how we might bring this forward under whatever policy framework is developed in government for commercialization. We’re a delivery/implementation mechanism.”

The NRC’s concept for CICs was informally floated before the last Budget. While the idea gained some traction within government, it was considered premature and jostled for position with several other proposals. Dr Arthur Carty, former NRC president and now national science advisor to the prime minister, has made commercialization one of his top three priorities. He has let it be known that he wants to see a single, coherent commercialization strategy rather than the disconnected and often opportunistic proposals that have emerged to date.

OTHER PLAYERS KEY

Since joining the NRC last year and assuming the president’s duties earlier this year, Raymont has had the opportunity to travelled extensively across Canada and internationally, listening to the perspectives of others who are also formulating commercialization strategy. He says Canada is in good shape when it comes to understanding the issues involved and the palette of mechanisms being considered. He argues that the NRC’s network of institutes and industry partnership facilities (incubators) can be put to good use in combination with the infrastructure outlined in the CIC proposal and “in partnership with a number of other players”. Those players include the Business Development Bank of Canada. Its venture capital arm received $250 million in the last Budget for seed stage financing, sector-specific venture capital and investments in start-up and early-stage firms to assist with the commercialization of enabling technologies.

“We can’t be too NRC-centric. We need a model that provides access in different regions in the country for infrastructure support to ensure that knowledge is capitalized on by the private sector. It has to be delivered regionally and be regionally sensitive,” says Raymont. “The need for a network and regional distribution is to allow commercialization to happen wherever it makes sense, including venture and seed capital linked to delivery nodes across the country … Canada appears to know as much about this game as anybody.”

Among the other active proposals, the one that most closely resembles the emerging NRC concept is Innovation Canada (I-CAN), developed by Dr John McDougall, president and CEO of the Alberta Research Council (ARC). The I-CAN concept is currently being shopped around Canada via a series of workshops and McDougall has entered discussions with several potential partners. Raymont acknowledges that I-CAN and CICs are “basically the same idea” of networked R&D infrastructure.” Both have nodes to support infrastructure to work with SMEs (small- and medium-sized enterprises) (see page 4).

“John and I have already discussed this and we need to sit down again and work together. In six months, we could have a unified plan,” says Raymont. “The government has spent $13 billion on knowledge creation so the universities also have a role, but we need others to bring perspectives to the table.”

Raymont acknowledges the existence of excellent models from other countries and has examined several. He says he’s particularly impressed with those in operation or being considered for the UK, Germany, Australia and Finland. But he asserts that foreign models are only useful as sources of ideas to create a Canadian version.

“There’s a model that works for Route 128 but clearly what works there is not translatable to Canada,” he says. “We have to be careful not to be seen and thought of as endorsing the flavour of the month.”

In the meantime, Raymont is leading the charge to get the NRC’s own house in order, creating a commercialization branch under the authority of DG Susan Moggridge (see chart). He is also taking steps to address recommendations made in the recent Auditor General’s (AG) report (R$, April 6/04). The AG was critical of the NRC’s governing council which it viewed as weak and urged the NRC to operate more like a business.

“Their observations are generally correct and it’s a good wake up message to the NRC,” he says. “NRC needs to be somewhat more strategic in looking at its priorities and future. We’re in the preliminary stages of a strategic planning exercise but it may require change. As interim president I don’t have a mandate to enact major changes.”

Raymont must also act quickly to deal with the sunsetting funding for its Atlantic Canada cluster initiatives, which will run out of money at the end of this fiscal year. An evaluation of those clusters is nearly complete and the NRC must then determine what should go forward.

“We’ll be in a position to suggest investments to support what is working, recommending a level of operating dollars to enable them to make further contributions,” he says. “If they don’t work well, we can tweak them. If they don’t work at all, we will have to make the tough decisions. There’s significant infrastructure involved and it took time to put in place ... Their impact is still to be determined.”

CARTY WEIGHS IN

In a speech in mid June to the federal government’s Interdepartmental Working Group on Commercialization, Carty provided some detail on the components he is expecting in a commercialization strategy and commented on the Group’s draft document on commercialization. He also acknowledged the contentious nature of elements such as the role of government, the debate over science push versus market pull and risk financing.

“The creation of a seed fund through the BDC was a good initial step ... to address these gaps even though there have been concerns about whether this is the best way to manage such a fund,” says Carty. “I do subscribe to the opinion that smart money follows good ideas and good people. The challenge then is to reduce the barriers between good ideas and smart money, improve the technical and business capacity to build investment-ready ventures, and ensure that we have competent, experienced and dynamic teams on both sides to manage the process.”

Carty added that a series of coordinated and cohesive set of pragmatic actions are preferable to a massive program response.

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