Federal Partners in Technology Transfer Annual Meeting - Halifax How can Canada capitalize on its investments in research? Dr. Michael Raymont Acting President.

Federal Partners in Technology Transfer Annual Meeting - Halifax Federal Partners in Technology Transfer Annual Meeting - Halifax

How can Canada capitalize on its investments in research?How can Canada capitalize on its investments in research?

Dr. Michael RaymontActing President National Research Council

June 18, 2004

What does the Government mean by “the commercialization of research”?

"Canada is developing an environment in which ideas flowing from scientific discovery are being generated at an unprecedented rate.

Now we must focus on bringing these ideas to market; to realizing their commercial potential. That is what will drive our economy forward, increasing investment and employment.”

Ralph Goodale, Minister of Finance2004 Budget Speech

Why is research commercialization important to Canadians ?

Commercialization necessary to realize economic and social benefits of research.

The Government has invested massively in research - $13 B since 1997.

Expects return.

Creating knowledge consumes wealth.

Commercializing knowledge creates wealth.

The commercialization imperative

• Market pull vs. technology push – the wrong debate?

• Innovation – complex, dynamic and interactive system

• Shared agenda – but government needs to be there

• Identifying opportunities and gaps/areas for improvement– Focus resources – Bring together technology, human skills, capital and other supportive infrastructure (clusters)– Building international markets– Targeting innovative SMEs, “gazelles” of Canadian industry

Why are SMEs important to commercialization?

Canada’s economy has many strengths -- balanced budget, steady growth, strong workforce, and relatively high Per Capita GDP

But it is very dependent upon the resource sector and branch plants

It looks to SMEs for new jobs, products, services, productivity, and innovation

Canadian SMEs must be export focused

Canadian economy dominated by SMEs

But Canadian SMEs have always had significant innovation and R&D challenges

SMEs have limited resources to invest in new and improved products, skills and technologies

Canadian SMEs struggle to grow into medium- sized enterprises

Survival rate for new small business averages 72% after one year, 44% after three years, 32% after five years

Spin-off or strategic licensing - Too many start-ups? G-8, APEC, EU]

Criteria for a successful start-up

Critical mass of “platform technology” Intellectual Property (likely more than one source)

Highly capable management team

Sufficient financing runway

Sustainable, differentiated advantage

Global market opportunity and perspective

Start-ups• Focus on fewer, top quality start-ups

• Benefits:– Higher survival rate– Faster growth– More impact– More economic value for Canada– Better returns (feeds the investment cycle)

• Best for -- Disruptive/breakthrough technologies

-- No existing receptor capacity

Licensing/sale to strong existing receptors

• Existing receptors have distribution channels and customers

• Know the market and can define application, product, pricing, “go-to-market” strategies, etc.

• More immediate economic returns from knowledge creation

• Builds strength of existing SMEs

• Opportunity to create “gazelles” (RIM, Ballard, Newbridge)

• Canada needs more gazelles

Outcome Incremental(Capitalize on what we know)

Evolutionary(Build the Future)

Disruptive(Create New Opportunities)

Time Horizon 0-3 years 2-10 years 5+ years

Driving Force Customer - market pull Mission - pull and push Curiosity, Serendipity - push

Business Focus Production & Sales Product & Technology Development

Blue sky researchDiscovery - Ideas

Activities Problem Solving, adaptation, testing, manufacturing, consulting

Applied research, demonstrations, prototypes, standards development

Basic research, applied research, proof of concept

Success Factors Efficiency, quality, cost Experts, IP, management Research excellence

Key Knowledge Markets, production processes, standards, management

Competitive intelligence, science & engineering methods

Basic science, research processes

Level of Risk Low Medium High

Share of Investment 60-70% 20-30% 5-10%

Source of Funds Contracts – Customers(Industry)

Contracts+Equity+Grants(Government & Industry)

Grants(Public)

Business Return Gross Margin Social and Economic ROI Knowledge, HQP

Impact Wealth, jobs Wealth, jobs, quality of life Knowledge, quality of life

The Innovation Landscape

(Adapted from ARC/I-CAN)

What needs to happen next …

Identify research needs, and capitalize on research withcommercial potential using the right vehicle

Curiosity/basic research → disruptive/breakthrough technologies → start-up

Industry needs → industry driven, applied/mission oriented research → licensed to existing receptors

What needs to happen next …cont’dImproved interface and collaboration between public sector, universities and industry (cooperative, shared agenda and responsibility)

Greater access to seed and other funding

Skills and mentoring in:–Commercialization, technology transfer, raising

investment capital and new venture formation

Partnerships and alliances – international

• Links people, capital, resources and ideas

• Actively engaged in technology commercialization

• Strengths of its research institutes

• Partnerships, international research networks, linkages

• NRC-IRAP, NRC-CISTI

• Technology clustering

• $750 M budget

• $150 M in revenues

• 5000 people (incl. 300 ITAs)

NRC – an engine for commercialization20 NRC Institutes

90 IRAP Office

10 IPF Facilities

NRC reaches across a spectrum of technology …

Astronomy

Biology

Chemistry

Mathematics

Physics

Engineering

Computer

science

Medicine

Architecture

Nanotechnology

Genomics

Photonics

Biomedical

Environmental

Aquaculture

Agriculture

Oceanography

Manufacturing

Construction

Soil remediation

Bio-diagnostics

Water remediation

Fuel cells

Software

Wind tunnel

Maritime testing

facility

Technology

licensing

CPRC

ScienceIntegrated Disciplines

Technologies ApplicationsProducts / Services

NRC has become more market relevantNRC has become more market relevant

NRC’s evolving Technology expertise is reaching toward market from traditional research.

IRAP-TPC

Discovery, Basic Research

Pre-competitive, Strategic Research

Development of Prototypes/Proof of Concept

Industrial Innovation

Products in the Marketplace

NRC RESEARCH

UNIVERSITY RESEARCH

NRC-IRAP

INDUSTRIAL RESEARCH

DISCOVERY TO INNOVATION TIMELINE

Valuefor

Canada

NRC: Bridging the innovation gap

Centres for research commercialization

Image of the Centre for the Commercialization of

Biomedical Technology (left) and NRC-IBD (right).

One possible approach - a unique collaboration with Federal Partners and other public and private sector organizations and part of the anchor to a technology clusters linked to a research centre and R&D partnerships

Example - Centre for the Commercialization of Biomedical Technology at NRC-IBD in Winnipeg (under construction)

Services to be offered by NRC or Partners:

Technology and business analysisMarket strategy assessment National and international mission and partnering supportTechnology law and intellectual property protection services Skills assessment and developmentInvestment networking and adviceMentoring services

Programs to be offered through the Centre:

New Entrepreneurs Program  Technology Acceleration The Tenant Program Access to NRC-IRAP

Together as a science and technology community, we all win!• “Justifies” investment in knowledge creation • Strengthens SME base with emphasis on accelerating growth of small to medium size• Creates quality employment• Major economic benefits• Other social benefits• Brings us together in common cause

What it requires:• partnering • integration• respect for expertise• culture / drive to succeed!