22 December 2010

Looking back, Looking ahead: Investing in Applied Research

Properly speaking a post so titled should come in January, but as we close out the year I thought it would be useful to summarize some key points from the past year, but more importantly, what I see as some key themes that I will be focusing on in the year ahead.

The past year has been a good one for applied research, for polytechnics, and for colleges engaged in instigating industry innovation. The Federal R&D Review is one of the more significant policy opportunities that emerged, with its focus on business innovation and what public policy measures can be taken to foster this. There can be no debate that we need to increase productivity and our national capacity to innovate. Polytechnics and colleges involved in industry applied research are working toward this and have made strong gains in the past year. Government sponsorship is helping us to help industry innovate. The increased funding we have received is not part of a zero sum game that pits colleges, polytechnics and universities against one another. The internecine reflex that encourages such thinking prevents us from moving forward.

For the year ahead I have three themes:

  1. The diffusion of innovation: to my point above, our ability to be responsive to the innovation and productivity challenges that beset us is contingent on complementarity and cooperation. This doesn't mean less of a focus on excellence. Rather, it means focusing on excellence while promoting a national, participatory and unified perspective on fostering greater business innovation. The intentional application of applied research and innovation services to industry needs and contexts means we focus less on discovery, and more on the design and diffusion of incremental innovation. Our focus is not on us, but on what we can do downstream by enabling industry innovation.
  2. People-centred innovation is a grounded way to promote participatory innovation - our way of engaging students, faculty and our partners, using the principles of human-centred design. This approach, contiguous with open innovation, fosters innovation literacy in our graduates while being focused on the downstream results of our work, as noted above, while being mindful of stakeholder needs. This is an outside-in, versus an inside-out approach, meaning we need to adopt the perspective of those we are working with and for. This is a basic precept of participatory design that lets us see our responsibility (to improving innovation and productivity for example) against any perceived right (to obtain funding for research). People-centred innovation acknowledges that innovation is a social activity.
  3. Using our imagination. It is time to modernize the Canadian postsecondary environment and create a national innovation system that clearly articulates universities, polytechnics and colleges. This new national system will be receptive to industry engagement, and will foster innovation literacy at all levels of HQSP. Doing this requires a collective will to imagine the future where we can compete in the global innovation economy. To do this we need to take research from ideas to invoice: we must craft an Innovation Policy that encourages firms to invest in R&D and provides an "any point of contact" entry to link industry with our postsecondary institutions (PSIs). Doing so will achieve a threefold ROI:
    • A Return on Interest from basic research that provokes thought and ideas, leading to disruptive innovations through long term research investment;
    • A Return on Innovation from applied research that increases industry R&D spending and our collective capacity to innovate, leading to improved productivity; and
    • A Return on Investment from experimental development through the creation of new products and processes and through the training of students, who enter the workforce ready to innovate.
 All of us implicated in the Canadian innovation system have a responsibility - a response-ability - to step up and continue to work together with each other and other players in the system. We need to think past the immediate and see the longer term goals of improving social and economic prosperity. In these tumultuous and kinetic times, our productivity challenges demand this of us.

21 December 2010

R&D Review Consultation Paper Released: Your Input Required

The Expert Panel on Review of Federal Business Research and Development Programs today released the consultation paper that will form the basis for informing the Expert Panel on the role of government funding programs in support of business innovation. The Panel has been asked to provide advice to the government on the following areas:
  • What federal initiatives are most effective in increasing business R&D and facilitating commercially relevant R&D partnerships? 
  • Is the current mix and design of tax incentives and direct support for business R&D and business-focused R&D appropriate? 
  • What, if any, gaps are evident in the current suite of programming, and what might be done to fill these gaps? 
As I've noted in this space many times, Canada's low BERD is an issue that requires national attention. The  polytechnic and college applied research approach to applied research and experimental development is one way that we can encourage businesses to invest in R&D, as noted in my recent submission to the Panel.

The Consultation Paper offers an interesting view of the state of R&D in Canada and is asking for input on 15 questions related to business innovation:
  1. In addition to the R&D activity defined by the OECD, should government be funding other business activities related to the commercialization of R&D? If so, what and why?
  2. Does Figure 2, the model of business innovation presented above, capture the key structural factors and inputs to innovation? If not, what is missing?
  3. Regarding capital, is there an adequate supply of risk capital for Canadian firms at each stage of their growth (start-up, small, medium, large)? If not, why not? Where returns on investments are low, what are the reasons and potential solutions?
  4. Regarding ideas and knowledge, do you believe it is important for Canadian firms to perform their own R&D and, if so, what do you believe are the key factors that have been limiting business R&D activity in Canada?
  5. Regarding networks, collaborations and linkages, what are the main impediments to successful business-university or business-college partnerships? Does the postsecondary education system have the right capacity, approaches, and policies for effective partnerships with business?
  6. Regarding the creation of demand for business innovation, what role, if any, do you believe that government should play in being a “first customer” for R&D investments in Canada?
  7. Regarding talent, is Canada producing sufficient numbers of graduates with the right skills to drive business innovation and productivity growth? If not, what changes are needed? Where demand for advanced skills is low, what are the reasons and what changes, if any, are needed?
  8. Can you describe whether and how your firm employs students currently enrolled in community colleges, polytechnics and universities, and what government measures could make it easier to work with students during their academic programs and to recruit them after their graduation?
  9. With which federal programs supporting business or commercially oriented R&D in Canada do you have direct experience and knowledge? In your view: 
    • Which of these programs are working, and why? 
    • Which programs are not working, and why not? 
  10. If you have direct experience and knowledge of the SR&ED tax credit, what are your views in relation to the following: 
    • Does the current structure of the SR&ED tax credit encourage incremental investment in R&D? Does it free up capital to invest in other aspects of innovation activities in the firm? Does this vary by size, ownership, sector or nationality of firm?
    • What are the strengths and weaknesses of the refundable portion of the SR&ED tax credit for Canadian-controlled private corporations and to what extent does it encourage the growth and commercial success of SMEs?
    • Bearing in mind the improvements being made by the Canada Revenue Agency, are there additional opportunities for change to simplify the administration of the SR&ED tax credit and facilitate the applications process?
  11. How could the Government of Canada lighten the administration requirements of its programs on recipients and improve outreach to business?
  12. How could the Government of Canada be more innovative and responsive to meet new needs or opportunities, and try alternative service delivery-approaches in its programs?
  13. Are there any gaps in the Government of Canada’s support to business and commercially-oriented R&D? Do firms performing R&D in other countries have an advantage over Canadian firms because of access to programs that are not available in Canada? What would be the principal features of new programming to fill these gaps?
  14. What lessons and best practices can be taken from provincial business and commercially oriented R&D programs, and how should the two orders of government align their programming?
  15. Is there a difference between R&D and innovation? If yes, how are they different? Should government focus on R&D or Innovation? What should the balance be?
The deadline for submissions is February 18, 2011.

Every participant in the Canadian innovation system should reply, particularly those firms that work with colleges, polytechnics and universities on collaborative R&D. It is important to use this opportunity to inform government R&D policy as we work together to foster improved business innovation in support of downstream social and economic productivity.

17 December 2010

On interaction, integration

Here are some more thoughts on people-centred innovation following this train of thought:

Some time ago I read a book by the founder of Ideo in which they talk a lot about human centred design. In trolling through the G-List search string I came across their site for a human centred design toolkit, "A free innovation guide for social enterprises and NGOs worldwide." It's worth a look. The principles of human centred design (HCD) are, as I've indicated earlier, highly amenable and adaptable to innovation. Focusing on how any innovation will have downstream impact - from people to social/economic productivity - is an essential way to ensure adoption. As noted in my twitter feed a while ago, "adoptation" is my new word to describe applied research and promoting the adoption/adaptation of innovation. Adoptation requires integrated thinking, it requires interaction among the users and producers of innovation, and it requires us to think about the people who will use a new product or service from the outset of design. it also requires conspicuous contribution - an open source approach to collaboration and complementarity.

14 December 2010

People-centred innovation

I am picking up on the concept of "people centred innovation" that SSHRC President Chad Gaffield spoke about in his panel at the recent ACCT Canada Innovation 2010 conference. Gaffield posits that the last century was about understanding technology, and that the next century - the 21st - will be about understanding people. Here is a link to a similar talk he gave earlier this year at the University of Alberta.

The principle here is that we need to recognize that innovation is a social construct or act, and that to pay attention to people is to understand the interactions and interlocutions of how innovation happens on the ground. This is good thinking for the innovation economy. The diffusion of innovation requires not a reliance on technological determinism but rather a nuanced approach to the integration of technology and a reliance on people. Here's an interesting take on people centred innovation from ACM Interactions magazine (a favourite of mine) and its relation to culture change - very much in line with Gaffield's thinking.

As I've noted many times before, our focus on integrating students into applied research fosters in them innovation literacy, a core competency for charting this culture change. Here's a statement that nicely sums these thoughts: "The world we live in isn't about the next new thing but about how well new things can integrate with established applications and processes." This integration requires innovative thinking, human intelligence and translation.

09 December 2010

A BERD in the hand...

A report out today shows a drop in BERD for the third straight year. This is a real problem for Canadian productivity. We need to realign the HERD|BERD imbalance in order to arrest our innovation free-fall. This news comes fast on the heels of the recent report that BERD dropped in the US for the first time since tracking began. The recession is being blamed for the Canadian BERD drop, but as I indicated in my last post, there's no recession in research. Further, if history is our guide, recessions are times when we must push ahead on innovation.

A related story shows that stock markets punish those firms that invest in innovation. This is a sad statement and indictment of the kind of short term thinking that gave rise to the economic meltdown in the first place.

08 December 2010

There's no recession in research: Report from Innovation 2010

ACCT Canada's conference Innovation 2010 concluded yesterday having featured some excellent discussions on building out the Canadian innovation system. Coming on the heels of the successful Polytechnics Canada Showcase, Innovation 2010 brought together R&D professionals from across the country to talk about action steps for continuing to build a complementary R&D system in the country. This is a good evolution from my first experience with the ACCT conference where the discussion was about why collaborate in the PSE sector to how should we collaborate to better enable industry to get inventions and innovations to market.

There were many excellent presentations and discussions - the format was particularly amenable to fostering lots of good dialog. Several things stuck out for me: SSHRC President Chad Gaffield spoke of the emergence of "people centred innovation" that he feels defines the 21st century. This resonates with me strongly given my own focus on human-centred design and how GBC Research integrates this into our approach to the diffusion of innovation. Steven Liss, VPR Queen's University, talked about how we should "own the podium" with respect to R&D and its commercialization. This echoes the "aggressive commercialization" that John Molloy (Partek, also at Queen's) made (see my note on my R&D Panel submission). Owning the podium means we need to pick winners and set priorities,which is in contrast to the usual approach Canada takes where we seek fair representation from all regions/sectors.

The title of this post is taken from a comment said to me by Brian Barber, VP of UHN's Development Corporation. He was referring to the fact that, even though there is a world wide recession that is impacting the availability of capital to take ideas to market, there is no shortage of ideas emerging from the research labs and industry partners we collectively engage with. This is a good reminder to focus our innovation efforts well.

04 December 2010

Innovation is the solution: Showcasing Polytechnic Applied Research

Algonquin College in Ottawa yesterday hosted the fifth annual Polytechnics Canada Showcase. Featuring innovation in action, students, faculty and industry partners from our nine member institutions convened to highlight work aimed at improving innovation and productivity.

The agenda kicked off with a panel that discussed how best to foster a complementary R&D system in the country - something I've discussed extensively on these pages. Rick Tofani talked about the Alberta "Innovation Renovation", and the breaking down of silos between universities, colleges, research centres and industry. Taras Hollyer from FedDev Ontario spoke of their efforts to seed capital in the Ontario innovation system, with a particular emphasis on job creation and capacity building for economic diversification. Margaret Dalziel from the University of Ottawa Telfer School spoke about the gap between the scientific community and the business community - the innovation gap or incentive vacuum where polytechnic/college applied research is most adept at addressing. Dalziel also spoke about how innovation activities in this middle, mediating space is not easily measurable by traditional metrics (patents, disclosures, etc) because getting innovation from idea to invoice involves many nuanced activities that are more qualitative than quantitative. This echoes a point made in my RD Panel submission: the diffusion of innovation requires us to find proxies and precursors to job creation and economic development so that we can begin to measure productivity milestones. Janet Scholz from ACCT Canada completed the panel's discussion, adding that we need long term approaches to collaboration and complementary partnerships in the innovation ecosystem. (NB: ACCT Canada is hosting Innovation 2010 next week in Ottawa).

All of these panelists discussed concepts highly relevant to open innovation, a topic that was picked up by Angus Livingstone's (UBC) luncheon keynote address. Livingstone gave the audience an excellent perspective on the need for action in the innovation space, and linking the high performing academic R&D players with the low performing business R&D side of the equation. Livingstone outlined a 5-point scale for assessing a company's innovation capacity, and reminded all of us that our goal should be to get a company assessed at 1 to a 2, and those at 3 to a 4 and ultimately 5. This is a sensible approach to fostering increased business R&D and the diffusion of innovation. Livingstone also picked up on the panel theme of measurement, saying that we need to begin to measure the intangibles like the relationships we form with industry partners. Doing so will take us past simple metrics of innovation as we work together to foster true innovation system capacity across the country.

The highlight of the day was presentations from students representing all nine polytechnics. Each student was given a 5 minute slot to tell about their project and the industry problem they worked on. This was followed by an open discussion and questions from the audience, during which the students displayed the core tenets of innovation literacy: problem solving, entrepreneurial thinking, and collaborative team work. GBC's students presented on our work supporting industry partner Syndications Canada and the development of a vertical axis wind turbine. As indicated in my twitter feed, the quote of the day came from Syndications Canada Managing Director Douglas Chaddock: "We hire GBC grads because they have a can-do attitude. We're CANadian, not CANTadian." He further stated that the advantage of college graduates is that they are not afraid to get their hands dirty as they work their way through the applied R&D world of business innovation.

Polytechnic applied research: it's all about collaboration, economic development, and getting your hands dirty.