Bridging innovation and commercialization

Events during the past week have re-focused my attention on research, innovation and commercialization, especially as it pertains to learning technologies. I was engaged for my second time as the Scientific & Technical Evaluator for the SynergiC3 project, on behalf of the funding agency:

The main objective of the SynergiC3 project [a joint venture between l’Université de Moncton, the National Research Council of Canada and Desire2Learn] is to create a productivity enhancement framework that will allow a content development team to effectively manage its resources as well as provide tools that will significantly decrease production times and costs of developing learning resources while augmenting quality.

Meanwhile, David Campbell asked about the potential for a research campus in our region, “I’m always on the lookout for interesting economic development examples that may have relevance to us here in New Brunswick.” Several years ago I had completed a “diagnostic assessment” for the Miramichi region on the potential for “applied research, development and innovation options”, and recommended two economic development strategies – Community Wellness & Sustainable Living, with details on how the public and private sectors could work together. Each option included information, communication and learning technologies.

Here is some of the background material from that report on bridging research and commercialization.

In a series of three articles [not available online], Alan Cornford stated that increasing public R&D spending will not increase innovation capacity, as only 3% of public R&D spending results in measurable innovation. The only way to measure innovation is through the outputs of R&D – specifically local wealth generation. Cornford stated that there is plenty of venture capital money available, but not enough finance-worthy ventures. The key to driving innovation is having the right people.

Even more interesting is that Cornford showed that private sector investment has 15 times the return on investment as that of the public sector. His main recommendation was not to weaken public R&D spending, but to strengthen it through private partnerships, especially with small and medium sized businesses (SMB). Cornford favoured enhanced R&D tax credits and the channeling of government investment into “community innovation idea outreach” to communities and SMB’s.

Pertinent to any discussion on our region, Cornford believed that where local SMB R&D receptor capacity is limited (as in most of Canada), the universities, polytechnics and colleges can conduct applied R&D for local SMB’s and therefore benefit from these increased R&D investments, while community SMB innovative capacity grows. Closer to home, in 2002, Dr. Alan Cornford produced a report for ACOA – Innovation and Commercialization in Atlantic Canada [emphasis added]:

The four provinces of Canada’s Atlantic region face several challenges in achieving their competitive potential. Advancements in communications and information technologies can remove some of the region’s barriers associated with the small population base and geographic distance from major markets. Nevertheless, growth of a knowledge-based economy that either capitalizes on existing natural resources or supports new industry sectors will require significant changes in culture, attitudes and approaches to innovation and commercialization. With only a small foundation and infrastructure upon which to establish this new economy, Atlantic Canada must build partnerships and collaborate more than ever before.

Cornford went on to say:

Atlantic Canada requires an aggressive investment program, with funding increases focusing predominately on industry-driven applied R&D. An appropriate balance of relative capacity in each of the stages of the innovation process is also critical to accelerating competitiveness and creating a robust and innovative economy.

The table below is based on Cornford’s synthesis of innovation and commercialization development. It shows that both Innovation and Commercialization are supported by culture, awareness and understanding – key components of our educational systems. Cornford shows the stages of Innovation and Commercialization as separate but related.

I concluded that Stage 4, where Innovation and Commercialization meet, may be the “sweet spot” for any regional initiative on research development & innovation, helping to bridge university and college research (Innovation) with the needs of SMB’s (Commercialization). What is most interesting is that this is a core component of the SynergiC3 project – proofs of concept, prototypes and pilots.

Stage Innovation

Using know-how to develop a new product or process

Commercialization

Applying the results of R&D in a commercial setting

1 Basic Research
2 Dissemination
3 Applied Research
4 Proof of Concept Prototype, Pilot, Pre-seed Investment
5 Pre-commercial Seed Investment
6 1st Venture Investment
7 2nd Venture Investment

I suggested that the community college, on whose behalf I was developing options, should focus on Stages 3 & 4. Areas of overlap occur in these stages and this is where a college can create the most value. In order to work at these stages, the college needs “upstream” and “downstream” partners. These include research universities and NRC upstream with industry and investors downstream. Staking out a niche that enhances the work of universities, NRC and NRC-IRAP would be easier than going into a perceived competitive role.

5 Responses to “Bridging innovation and commercialization”

  1. Stephen Downes

    I think you need to be careful with statements like “Atlantic Canada requires an aggressive investment program, with funding increases focusing predominately on industry-driven applied R&D. ”

    If ‘industry-driven’ means that the program is driven in such a way as to develop the region’s industrial capacity, then that is fine.

    if, however, the phrase is interpreted in such a way as to be interpreted as ‘industry directed’ then this is less fine. While I can agree that industry should be a beneficiary of research, I don’t believe that it is in the best position to direct the distribution of those benefits.

    – first, industry is often not in the same position as research to understand the need or potential for a given applictaio n. Often, industry representatives respond to a proposal with an erroneous “it can’t be done” or “nobody needs this” response.

    – second, industry is not supportive of R&D that could undercut its existing business. Hence, for example, a paper company would be interested only in technologies that increased the use and utility of paper, and not technologies that replace paper, even if these technologies are more viable.

    – third, industry is often focused on the short-term and is not interested in an R&D program that will not produce immediate next-fiscal-year return on investment

    – fourth, existing industries, especially in a small region such as the Maritimes, seek to direct all investment to existing entities, and away from new entities or those that might move in from other regions.

    For these reasons, an industrial R&D strategy, even if it is driven by industry needs, should be determined at the public level, and not by the industries that might stand to directly benefit from the allocation of public funds.

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  2. Harold Jarche

    I didn’t say that Atlantic Canada needs an aggressive investment program, but Allan Cornford did, and his report had already been accepted by my client. I was building on what the organization had already used.

    My model is not industry-directed, but shows the link between research (left side of table) and commercialization (right side). Industry focuses on commercialization while universities & NRC focus on innovation, according to the table.

    The aim of this report was to determine if an applied research centre could be established around a “community college” in a rural region. There was no direction of what research universities or research institutions should be doing, only the creation of a bridge between the public and the private sectors with a focus on innovation:

    “For the purposes of this report, a working definition of innovation, from Cap Gemini is “a robust creative process that turns out a very distinct output with significant impact on the market”. Therefore, what we are looking at in this study are the ways that applied research and development activities in the Miramichi area can help to create measurable, market-accepted products and services.”

    I understand that the public should drive the high-level agenda, but industry decides what is viable and how to commercialize it. This is the case of the SynergiC3 project as well. Perhaps that is why I was hired to do this report instead of someone with a vested interest in the local economy. In the end, the report was shelved, so it’s a mute point. I have written this up in case anyone else sees some use in it.

    Reply
  3. Howard Johnson

    An interesting idea; a research center that focuses somewhere between stages 3 and 5, creating bridging (knowledge centric?) relationships as a key development catalyst. There certainly is an explosion in stages 1 & 2 knowledge and there seems to be a lot of money chasing speculation instead of value. Do you think anyone knows how to do such a thing – examples of methods?

    Reply

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