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.