The Importance of SMEs to the Canadian Economy Presenter: Peter Cashmore A/Executive Director, Ontario Region

What we don't do well enough is to bridge between the researcher and the marketplace. We don't do a good enough job in commercializing research. We haven't yet developed what they call a 'receptor capacity' in business to take the new idea from the lab and bring it to the market place to the point of sale. And that involves a bundle of things from the availability of venture capital, putting investors together with researchers to create a culture of commercialization in our universities, and again, we're taking steps to address that. Minister of Industry, Alan Rock, March 17, 2003

The Importance of SMEs to the Canadian Economy Introduction NRC-IRAP Overview SMEs in Canada The Importance of SMEs to Canada Challenges Facing SMEs in Canada Key Activities to Promote Success Commercialization Conclusion Questions?

NRC-IRAP Overview Federal Initiative for SMEs IRAP Services: –Technical Expertise and Advisory Services –Research Assistance Contributions for R&D Activities IRAP Non-Repayable Contributions IRAP Youth Employment Strategy (YES) programs

Types of NRC-IRAP Projects Identification of business opportunity Technical feasibility IRAP funding Proof of concept Development Network Member Support Cluster Activities IRAP Advice

ITA Advantage 232 ITAs More than 147 locations across Canada 11 funded clients per ITA 31 non-funded clients per ITA On average make about 100 client on-site visits per year per ITA 75% have a Masters or Doctorate Experience in Private or Industrial Research & Development Actively engaged in 100 communities

SMEs in Canada Definition of SME Majority of companies in Canada are classified as small- sized enterprises Significant potential for economic growth. Over 1.5M companies were registered in Canada

The Importance of SMEs to Canada Job creation Revenue for Canada – boosts wealth Aids in making Canada a player in the world market

Key Activities to Promote Success Networking Partnering Extending global reach Establishing strong customer relationships Commercialization

Commercialization a priority for Canada Dependent upon: –Technological Innovation –Business Development Time-to-market factor –Ensuring fresh business concept –Ensuring solid economic viability Casebank Technologies

Commercialization Over 160 commercialization programs in Canada IRAP commercialization partners: –Western economic Development (WD) –Canada Economic Development (CED) –Atlantic Canada Opportunities Agency (ACOA) Programs provide: –Funding –Consulting –Networking Services

Example: SME-University-IRAP Players: Company: Found Aircraft Development Inc. Parry Sound ON. University of Toronto IRAP – 2 ITAs

Opportunity: Re- introduction of popular bush plane (FBA-2C) One of original designers from the 60s came out of retirement to “take advantage of new material development and design techniques”. New plane called Bush Hawk-XP

ROLES: IRAP: ITA make connections with U of T (UTIS) and client IRAP adds financial support for project Literature/patent searches. U of T: Introduces firm to cutting-edge CAD technology

Results: Greater load capacity through new slotted wing flap. Landing gear streamlined. Size of rear doors increased and open 180 degrees.

Benefits: 75 production jobs New technology Sales! Innovation Leader Award (2002)

Sideline: IRAP ITA at U of T IRAP introduces lean Manufacturing Found’s Chief Engineer – U of T graduate.

Conditions for Successful National Innovation Systems A solid science base anchored in higher education and/or research organizations that nurture cutting-edge research while developing human resources with high level qualifications in science, technology and engineering. A culture of entrepreneurship underpinned by market incentives and conditions to undertake risky activities. A significant portion of firms actively engaged in cross-border trade and investment, given that for most countries the bulk of genuinely new products or processes will come from abroad. Strong industry-science linkages, allowing firms to better exploit the output from public research and helping researchers to better respond to industry needs.

Conclusion Questions?

Share of population aged with at least tertiary education, 2002 Source: Education at a Glance, 2004

Venture capital investment flows as a percentage of GDP for Australia, Japan, Korea and New Zealand. Countries are ranked according to the sum of early stage and expansion. Source: OECD Venture Capital Database, 2003

Countries ranked according to sum of bank, insurance and pension funds Source: OECD Venture Capital Database, 2003.

Business and Public spending on R&D as a percentage of GDP, or latest available year (from 2001 to 2003, except for Austria 1998 and Switzerland 2000). Source: Main Science and Technology Indicators Database.