The Canadian National Conference on Innovation was held at Université du Québec en Outaouais (UQO) on the 12th and 13th of June 2019. Covering topics ranging from women in innovation, superclusters and scientific innovation to entrepreneurship, financing innovation, and innovation in the public service, the conference brought together Canada’s innovation leaders and major stakeholder groups, facilitated networking and collaboration opportunities and enabled sharing of best practices and strategic insights. Our President & CEO, Dave Watters, was part of the expert line up speakers in both days of the conference.
Firstly, the Chief Economist at the Canadian Chamber of Commerce, Dr. Trevin Stratton, provided facts and his thoughts about Canada’s competitiveness in the global context, focusing both on the current state and the forces shaping the future. Accelerated pace of technology and geopolitical destruction have become the two influential forces shaping the current state of global competitiveness. Mr. Stratton also noted that although we are good at incubating and creating startup firms, we are not performing well with respect to scaling them up to become large anchor firms that are globally competitive.
The second part of the conference was a panel discussion about women in innovation and developing female innovators, chaired and moderated by Statistic Canada’s CFO, Monia Lahaie. The panel scrutinized governance models, women and innovation, the perspective and support of the public sector, women innovators in the world of business, and importance of supplier diversity. One of the main take-aways of this panel is that the board of directors in any organization needs to have equal representation of women and other underrepresented groups. The social aspect is integral to achieving real innovation.
The third part was on Superclusters – Canada’s new and ambitious co-investment and collaboration initiative for industrial innovation. With the investment of up to $950 million over 5 years, the Superclusters are expected to create more than 50,000 jobs over ten years and add $50 billion to Canada’s GDP over 10 years. This is not an easy task, considering the tight timeline to meet the goals. Therefore, the challenges and barrier to success have to be managed proactively. All panelists, including Dave Watters, agreed that in order for success, the Superclusters need to be globally connected to supply chains and access to new markets for wealth creation. Secondly, we have to figure out how to build integrated solutions for commercialization and manage IP issues that might stem from the process of R&D and tech collaboration between various stakeholder groups. Third is establishing the most effective means for exchange of information between each of the Superclusters. During his presentation, Mr. Watters suggested the creation of a new Supercluster Information Exchange (SIE) to fill this gap. The functions of SIE would be to facilitate information exchange; identify and disseminate best practices; examine common problems, as requested by members; monitor collective impact (e.g. GDP growth, employment growth, productivity growth, etc.); and coordinate some reporting requirements, as requested by members (See the schema below).
In his second presentation, Dave provided a comprehensive view of the federal government’s financing of innovation. The federal government has introduced and started to implement four flagship programs over the last couple of years. These programs include the Strategic Innovation Fund, Industrial Research Assistance Program, Regional Development Agencies, and the Trade Commissioner Service. The four flagship programs, together with the Sustainable Development Technology Fund and Scientific Research & Experimental Development Tax Incentive Program, constitute the federal government’s major channels to finance innovation in Canada – directly and indirectly. However, government programs are numerous, fragmented, and small in scale compared to private sector risk capital. On the other hand, Crown corporations – a prime example is the BDC – offer more resources (especially capital) and are more specialized and strategic with better risk management. In this regard, the players in Canada’s innovation ecosystem need to leverage the opportunities of venture capital investments and private equity funds (See the bar chart below).
Two key questions we should consider:
- Most government innovation funding is channeled through programs hosted at federal departments. Could that funding be invested through more efficient vehicles?
- BDC is the only kind of financial institution dedicated to helping entrepreneurs within the federal system. Could it be used in better ways to advance the goals of Canada’s innovation, trade, and industrial policies?