ACCC SUBMISSION TO THE EXPERT PANEL ON THE REVIEW OF FEDERAL SUPPORT TO RESEARCH & DEVELOPMENT Prepared by: Association of Canadian Community Colleges 200 1223 Michael Street North Ottawa, Ontario K1J 7T2 Tel: 613-746-2222 Fax: 613-746-6721 Date: February 18, 2011
The Association of Canadian Community Colleges The Association of Canadian Community Colleges (ACCC) is the national and international voice of Canada s 150 colleges and institutes. With campuses in 1,000 urban, rural and remote communities, 1.5 million learners, and 60,000 educators, these institutions draw students equally from all socio-economic quarters, and supply graduates with the advanced skills essential to Canada s economic growth and productivity. Colleges are the advanced skills educators of choice. Aligned with the needs of employers, and operating on the leading edge of skills identification, economic trends, and market shifts, colleges solicit business and industry input into curriculum development through Program Advisory Committees. Colleges encourage business formation and sustainability by growing the local talent pool, by re-skilling displaced employees, by offering customized education, and by providing applied research and development support. They are key to immigrant credentialing and integration, and the access of the disadvantaged to post-secondary education. Association of Canadian Community Colleges (ACCC) 200-1223 Michael Street North Ottawa, ON K1J 7T2 www.accc.ca
The Association of Canadian Community Colleges (ACCC) welcomes the opportunity to contribute to the consultation process initiated by the federal government on the review of support to business Research & Development. Recognizing the need to strengthen collaboration with business and industry sectors, increase business expenditures to research and development (BERD) and improve Canada s productivity performance are timely and applauded by Canada s network of colleges and institutes. Over the last several years, ACCC has advocated for increased recognition of colleges and institutes role in applied research, in particular their pivotal role in the application and commercialization of new knowledge with industry partners. The Government of Canada has begun to recognize the contribution of colleges and institutes to economic growth through the NSERC s College and Community Innovation (CCI) Program, CFI s College-Industry Innovation Fund and the Applied Research and Commercialization Initiative of the Federal Economic Agency for Southern Ontario. These investments will generate powerful outcomes, but constitute less than 1% of federal R&D expenditures. Colleges and institutes forge links that build knowledge and support partnerships that address critical social, cultural and business issues and bring the benefits of research to the larger society. Stimulating innovation and creating economic opportunity for Canadians will be sustained only if two conditions are met. First, we must accelerate the innovation, productivity and competitiveness of industry, in particular small and medium-sized businesses. Second, we must produce graduates with innovation-ready advanced skills to meet the needs of employers. Canada s colleges and institutes are well positioned to meet these two imperatives: They supply the advanced skills and applied research that underpin economic growth and productivity improvement. With campuses in 1,000 urban, rural and remote communities across Canada, no other institutional infrastructure exists with this breadth and impact. Colleges and institutes are innovation catalysts and accelerators which help SMEs start, develop and grow. They provide business development support integrated The number of applied research college/private sector partnerships has grown exponentially from 515 in 2005-2006, to 3,814 in 2009-2010. Early indications for 2011 show a further increase. Several federal investments are contributing to this success and could be leveraged to support more college-industry partnerships. with applied research activities that contribute to product and process innovation, technology access and commercialization. SMEs are seeking support in areas which will have immediate or medium-term results, driven by changes in the market environment, new technological advances, or the impact of new regulatory parameters whether Municipal, Provincial/Territorial, Federal or those of countries where their products are marketed. Companies look for help for solutions driven by anticipated long term regulatory changes but it is those of immediacy that occupy their attention. Colleges excel in this area. Colleges and institutes have formal research policies, processes, structures, measures and indicators of performance and dedicated human resources for engaging with industry partners. The number of dedicated research centres and labs in colleges and institutes has increased from 72 in 2006 to 196 in 2009-10. 1
The value-added that colleges bring to the SME partners extends to the company s clients and suppliers. Canadians reap the benefits of new technology, new products and processes, reduced product costs, improved efficiency and economic growth. Colleges and institutes provide a supportive environment for inventors and entrepreneurs to develop their business ideas into profitable enterprises. These institutions house business incubators, accelerators and help source technologies, test and refine new technologies and quantify impacts and provide bench-tests before field implementation. A key benefit to companies involved in applied research partnerships with colleges is that intellectual property ownership can remain with the company. In some instances, there is a shared ownership of the IP. Some of the most innovative and promising businesses are microenterprises that offer significant opportunities to create jobs and contribute to the country s competitive edge but do not have the resources to put in place innovative business practices. Colleges and institutes can play a key role in bringing these microenterprises together in their respective regions to help them develop the necessary tools to succeed. Innovequity, an Alberta company operating in the building sector approached novanait, Northern Alberta Institute of Technology s Centre for Applied Research and Technology, with an idea and a patent application. NAIT provided prototyping and scale up support, and attracted financing and partnerships with manufacturers. NovaNAIT was also able to leverage the expertise of their business school to assist the company in their business development planning. The company is now a sustainable and successful business in manufactured housing and structure. The Olds College School of Innovation (OCSI), a small rural institution with roots in agriculture and land-based industries is working with local berry producers to develop the commercialization of dark berry products for the nutriceuticals and functional food industry. The health-giving benefits of dark berries have been known for sometime and the marketplace is poised to see the commercialization of products derived from both the fruit and its seeds. Colleges and institutes deliver programs with an applied focus and directly linked to the needs of employers. These institutions produce highly trained graduates by providing students with real world challenges, hands-on-experience with leading edge technologies, contact with industry, and advanced skills education for all sectors of the economy. Colleges and institutes are expanding applied research activity to include international partnerships to allow them to better serve Canadian SMEs in a global market economy. The Yukon Research Centre of Excellence (YRCF) at Yukon College is leading a mission to Europe to explore partnership opportunities for developing small-scale energy projects to replace diesel fuel, as well as initiatives in the permafrost engineering field. 2
Opportunities to Leverage ACCC recognizes that the Expert Panel s recommendations will not result in an increase or decrease to the overall level of funding required for federal R&D initiatives but rather focus on how current programs and policies can be adjusted to maximize impact. ACCC recommends consideration in the following areas: NSERC College and Community Innovation (CCI) Program The NSERC College and Community Innovation (CCI) Program has been instrumental in recognizing the direct impact that colleges and institutes have in advancing economic development through support of their industry partners. Increased investments in CCI in 2010 further recognized colleges and institutes as important drivers of innovation and will demonstrate the value-added for Canada, local economic development and productivity enhancement. A preliminary NSERC review of 8 progress reports involving 27 companies for the initial 18 months indicates: Incremental Innovation: The partners report that many of their projects involved adapting, improving, and developing, processes, technologies and/or products. BERD: More than half the partners reported an increased capacity for innovation, and just under half reported an increased investment in R&D. Business Performance: o One third of the partnering companies reported increased employment from working with the colleges, and an equal number reported increased productivity. o o More than half reported increased competitiveness. Roughly one third reported increased market share, and an equal number reported increased profitability. This analysis demonstrates that the CCI Program, even in its early stages, is having a significant impact on better enabling colleges and polytechnics to contribute to business innovation. The CCI Program should be further leveraged through an investment in the Technology Access Centres. Applied Research and Innovation Leaders Program ACCC proposed that the federal government create an Applied Research and Innovation Leaders Program which would support a designated college/institute leader who would be a catalyst for new research and innovation. The Program would assist in the development of applied research efforts in sectors where there is a local/regional socio-economic need but that have not yet been developed in the college or institute. Federal Economic Development Agencies The Federal economic development agencies have recognized the key role of colleges and institutes as innovation accelerators. Across the country, there are numerous examples of collaboration supported by the agencies. These relationships provide the base for even greater reach to enhance business growth. Ongoing financial support would contribute to college and institute capacity and value. With the support of the Atlantic Canada Opportunities Agency, the Biofermentation Technology Scale- Up Centre at Collège communautaire du Nouveau-Brunswick, is building Atlantic Canada's first biogas system for producing low carbon electricity and liquid fertilizer from organic waste. This project will significantly increase the applied research capacity in industrial fermentation across Atlantic Canada. 3
FedDev Ontario's Applied Research and Commercialization Initiative is proving to be an effective model for encouraging college-industry partnerships in applied research projects and should be expanded to other regions across Canada. NRC Industrial Research Advisor Program (IRAP) IRAP is a sound program for businesses and their college partners but funding runs out early in the fiscal year. There is an opportunity to strengthen the impact of IRAP by modifying program parameters to streamline its access with other programs such as the new NSERC Applied Research Development Grants under the College and Community Innovation Program and the NSERC Engage Grants. Collaborative Research Networks Colleges have established over 150 collaborative networks locally, regionally, provincially, nationally and internationally, many of which are sector specific. Colleges and institutes also work collaboratively with universities and other research organizations. These networks provide platforms for sharing exemplary practices and undertake joint research projects. Increased federal and provincial support for these networks would accelerate and increase SME access to the applied research and commercialization expertise of colleges across Canada. Scientific Research and Experimental Development (SR&ED) Tax Incentive Program The federal tax incentive, which encourages Canadian businesses to conduct research and development, is a good program, especially for SMEs and must be continued. There are benefits to not only the R&D performer, but also their supply chain partners. Companies should have the option to access the tax credit either as taxes owed or as a refundable tax credit. To foster innovation through applied research, commercialization and knowledge/technology transfer projects, Fanshawe College has two research centres: the Centre for Applied Research, Innovation & University Partnerships and the Fanshawe Industry Innovation Centre. Through the Colleges Ontario Network for Industry Innovation (CONII), Ontario companies are able to access up to $30,000 in funding to support technical activities such as product, process and prototype development, proof of principle projects and testing, and business and commercialization services including business planning, market research, and marketing and communication strategies, in partnership with a CONII-member college. Small and medium-sized enterprises find the SR&ED administrative process complex and seek advice of the colleges to help them access the tax credit. There is potential to capitalize on applied research and commercialization programs by adding a fast track SR&ED application process to programs such as the College and Community Innovation Program. The provincial governments in Ontario, Quebec and Manitoba provide a SR&ED top-up tax to companies partnering with colleges and institutes. This incentive mechanism would have the potential to expand college-industry partnerships if implemented in other regions of the country. College/Institute Student Scholarships Colleges and institutes produce graduates with advanced skills in applied research and innovation which contribute to Canada s highly qualified personnel (HQP) but are not currently eligible for Tri-Council Scholarship Programs. Expanding scholarships to college and institute graduates would respond to the federal government s commitment to expose more students to private sector challenges, stimulate the interest of students to do research, provide students 4
with an understanding of the skills required by industry and link students with potential future employers. Programs such as the NSERC Industrial Undergraduate Student Research Awards and the Mathematics of Information Technology and Complex Systems (MITACS) Accelerate Program which link university graduates with Canadian companies should be open to college and institute students. As part of an Applied Research and Innovation project, Algonquin College students and professors worked with an Ottawa firm, HouseAll Systems Corporation, to design a larger version of their existing emergency shelter. After the major earthquake hit Haiti leaving one million people homeless, the company flew Algonquin College construction students and professors to Haiti to install the shelters and train Haitians to build them. Building a Culture of Innovation In the work of the Research and Development Panel consideration must be given to the importance of an innovative Canadian context beyond the private sector. Building a culture of innovation within public corporations, social sectors and governments are vital underpinnings for success of private sector innovation. The Centre collégial de recherche en économie sociale is a multi-disciplinary centre based at the Cégep de Lanaudière dedicated to research on social innovation in the social economy. The project s objectives were to locate businesses in this sector, identify the socio-economic benefits for the region, observe the problems encountered by these regions, and assess the role of the social economy in sustainable regional development. Terminology Terminology is important when dealing with industry partners. The use of language such as collaborative project problem-solving, technology validation, process improvement with immediate and mid-term results versus long-term results is more relevant to industry. Attention to and clarification of relevant terminology will contribute to greater understanding and participation of SMEs and in particular, small enterprises. Greater Investment in College/Private Sector Innovation The federal government invests less than 1% of its R and D budget in colleges and institutes to assist business. This limits the capacity of businesses to innovate, grow and create jobs. ACCC recommends an increase to 5% of the federal R&D budget designated to colleges and institutes and their private sector partners for innovation, applied research, product development, technology transfer and commercialization. 5