Grow Companies and Accelerate Clean Growth Roundtable
August 16, 2016—Edmonton, AB
Grow Companies and Accelerate Clean Growth
Hosted by Maurice Moloney
Area of Focus
Moving from top science and transformative innovation to successful commercialization.
- What must Canada do to support the scale-up of innovative companies?
- Which organizations and research centers nationally are essential to building capacity for global science excellence and how should we resource them?
- How can we encourage and strengthen collaborations between excellent science and industry?
Recognize innovation as growing out of a complex system of multi-stakeholder communities; Need to build bridges between innovation centres both nationally and internationally; Need to focus support on building key innovation hubs and create programs that encourage collaboration across national hubs; Need to simplify support and commercialization initiatives for entrepreneurs; Need to celebrate a culture of innovation nationally and market our strengths internationally.
Summary of Discussion
Innovation is a "contact" sport—Canadian entrepreneurs require the support of strong networks across regions, sectors and countries to win. The 'knowledge supply chain' that leads from discovery to product launch should not be viewed as linear, but instead as a complex innovation web that is reinforced by bringing people with different expertise and inputs together to share ideas and ensuring 'handover' points along the chain are strong.
Transforming innovation to commercialization requires the support of many actors. Canada needs to take a long-term view of creating and shaping a culture of innovation and entrepreneurship. It should do this by influencing the factors that lead to economic success but not by engineering solutions and picking winners. Canada should look to best practice models from around the world including Israel, Europe and Singapore.
Key Implementation Considerations/Challenges
Commercializing science: Research labs focusing on pure discovery science are only addressing a small proportion of commercial opportunities that corporations recognize in the market and need to have addressed. Development should be informed by the market. Increased sales and exports should be encouraged by reducing interprovincial and international barriers to trade wherever possible.
Supporting scale-up: The myriad funding and support programs result in a system that is difficult to navigate and awards relatively small funding amounts. This leads to entrepreneurs focusing much of their attention on finding and applying for funding rather than on building their businesses. Participants also noted that a strong emphasis should be placed on the creation of mid-size companies. While billion dollar companies can become important keystones, $100-500 million companies are often more innovative and play a significant role in creating jobs. Germany, for example, has created special programs that focus on supporting these special innovative "Mittelstand" (or SME) companies. Finally, SR&ED was recognized as an inefficient way of directing funding and support to innovative companies.
Building capacity: Canada needs to focus and build expertise in key strategic sectors by supporting the creation of regional hubs. Building successful high-growth companies requires support from a complex ecosystem of incubators, accelerators, funders, post-secondary institutions and support organizations.
Skills development: Canada creates great science but many innovators lack the business skills to commercialize their discoveries. Basic business education for innovators across a variety of sectors and fields would go a long way to improving the survivability of start-ups.
Increase collaboration: Encouraging participation by foreign investors will increase the funding available to start-ups and also to learn from these established investors and leverage their connections to grow global networks and markets. While regions each encounter unique challenges, programs should also encourage support organizations and hubs to increase collaboration, build connections, create viable commercial solutions, and present a cohesive front to the international market. Information flow between companies, researchers and the marketplace needs to be encouraged and supported.
Access to capital: Every stage and sector requires different aspects of financing. Funding needs to be directed at feeding the pipeline. Supporting research and early-stage start-ups is only the first half of the equation. Follow-on and growth funding needs to be available to support the creation of globally competitive Canadian companies.
Commercializing science: Development needs to be informed by the market. Grant and research funding programs should be structured to encourage interaction between corporations and researchers and reduce barriers to commercialization.
Supporting scale-up: Funding should be simple and easy to access with a human interface to support entrepreneurs from discovery to product launch and beyond. Providing matching or larger funding amounts to private sector-backed companies, through current programs or one like the Small Business Innovation Research (SBIR) grants in the US, will create a focus on supporting winners and will reduce the amount of time firms spend applying or looking for funding.
Building capacity: The government should focus funding and support on leading clusters and researchers rather than spreading funding broadly across the country. The government must take a long-term view of establishing a culture of innovation. This can be encouraged by establishing national champions that can help build bridges between various sectors and stages of development, and that applaud and encourage innovation in all its forms, including failure.
Skills development: To improve the success of innovative start-ups, entrepreneurship education could be integrated into STEM curricula. To bridge the gap between research and commercialization, the government could also support co-op type programs at the graduate and post-graduate levels.
Increase collaboration: The government should revise support and funding program parameters and metrics to encourage cooperation and information sharing between organizations and across regions, including enhancing the early involvement of industry and commercial partners in development.
Access to capital: Venture capital provides important funding for innovative start-ups. VCAP sparked increased private-sector participation but the funds will be committed before the 7-10 year funding cycle is complete. Government should signal its continued support for the industry by reinvesting in a similar program. Early-stage support should be provided through continued funding for leading incubators, accelerators and support organizations through programs like NRC-IRAP and CAIP.
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