21st Century Manufacturing The Role of the Manufacturing Extension Partnership Program (2013) / Chapter Skim
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Appendix A1: Canada's Industrial Research Assistance Program (IRAP)
Appendix A1: Canada's Industrial Research Assistance Program (IRAP)
Pages 191-223
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currently supports over 8,500 Canadian SMEs in their R&D and innovation-related activities.1 IRAP has a growing international reputation, and has been identified as a best practice in providing a broad suite of innovation support services and funding to Canadian SMEs.2 This chapter examines the key features of the IRAP program: the origin and history of the program; its organization and governance; the resources dedicated to it; the services provided; the characteristics of its clients; the benefits derived from the program, the program's strengths and weaknesses, and lastly suggestions on how IRAP might be improved. HISTORY The Industrial Research Assistance Program (IRAP)
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for the development and commercialization of their technologies. As the current Director General of IRAP has recently stated, "IRAP assists SME firms to develop, adopt and adapt technologies and incorporate them into competitive products and services to be commercialized in the global marketplace."3 The second is to collaborate with, and in some cases to fund regional and national organizations that support the development and commercialization of technologies.
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Most of this evolution appears to reflect a need to respond to altered economic conditions.5 The timeline can be briefly summarized as follows: 1962-1978: (later known as IRAP-P) Contributions to Large Projects -- IRAP began as a single program providing long-term technical and financial assistance, lasting up to five years per project.
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RDA sought to meet the needs of firms that lacked specific technical expertise or a crucial technology to undertake a project. Funding of between $15,000 and $350,000 was provided covering up to 50 percent of project costs.
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2. IRAP provided Technology assessments for DFAIT's International Science and Technology Partnership Program (ISTPP)
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IRAP was also given responsibility to deliver the Digital Technology Adoption Pilot Program (DTAPP is an $80 million pilot program that began in October 2011 and that will run until March 31, 2014) .13 It is delivered by IRAP ITAs who offer SMEs advice on ICT systems and technologies, and provide funding to improve business performance.
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. The IRAP Program is overseen by the NRC's Senior Executive Committee composed of a President, five (5)
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Innovation Network Advisors (INAs) in the region, who report to the Executive Directors, focus on building effective regional innovation system relationships and, where warranted, work with innovation support organizations to provide expanded or new innovation assistance to SMEs.
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who work under the supervision of the ROM / FOM are responsible for a wide range of activities undertaken in support of the delivery of the program with regard to financial contributions. More specifically they administer contribution agreements with firms and organizations, including assisting the ITA with preparing and reviewing agreements and amendments, reviewing claims and processing payments in accordance with the terms of the contribution agreement, and advising ITAs, INAs, signing authorities and clients on appropriate modifications to agreement clauses.19 Regional Distribution IRAP field staff is located in 147 offices in 100 communities across Canada in regional economic development organizations and networks, business associations, universities, and colleges.
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. This B-Base funding is primarily the result of the Government of Canada's comprehensive stimulus and economic recovery plan called "Canada's Economic Action Plan" in response to the 2008 global financial crisis and economic recession.
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Thus, while additional funding to the IRAP program for contribution to SMEs is beneficial, it also placed enormous pressure on IRAP staff to deliver the program with no new administrative or operating resources. In addition, during this two year period as part of the Government's stimulus and economic recovery plan, IRAP was asked to deliver two support programs (involving $88M in payments)
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For example, to pick one IRAP region, the types of organizations in Western Canada that receive funding include: Alberta Innovates, Arctic Energy Alliance, BioAccess Commercialization Centre, Biomedical Commercialization Canada, Calgary Technologies Inc., Canadian Environmental, Technology Advancement, Corporation (CETAC) WEST, Communities of Tomorrow, Composites Innovation Centre, Enterprise Saskatchewan, Entrepreneurial Foundation of Saskatchewan, Government of the Northwest Territories, Industrial Technology Centre, Manitoba Innovation, Energy and Mines, Springboard West Innovations, TEC Edmonton, Western Economic Diversification Canada, and local universities, colleges and technical institutes.
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APPENDIX A1 203 FIGURE APP-A1-4 Budget breakdown. FIGURE APP-A1-5 Types of organizations.
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b. Financial contributions to third party innovation organizations that provide services for SMEs.
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They deliver the core IRAP services to SME firms. Each work with about 42 clients per year and 11 of their clients will receive funding.28 They provide R&D project advice, technology and business advisory services, competitive technical intelligence, networking and linkages, funding, and investment readiness counseling.
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. In summary, the ITAs feel they should spend more time developing funded projects and managing contribution agreements and less time on administrative tasks.
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17.1 29.5 11.8 information tracking, reporting, due diligence) Other 5.5 6.3 5.6 TOTAL 100 100 100 SOURCE: Impact Evaluation 2007, p.
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Access Service Management Advice 24.2 1 5 Financial Advice 23.3 2 7 Technical Advice 22.7 3 6 Marketing Advice 21.8 4 10 Patent Search and Literature Search 17.5 5 4 Mentoring and Coaching 17.2 6 13 Expertise Linkages 16.9 7 18 Technical Assessment 16.9 8 11 Referral to Other Organizations 15.9 9 22 (including non-governmental) Project Development 15.7 10 12 Market Assessment 15.2 11 9 Project Management 15.0 12 15 Market Linkages 14.6 13 16 Competitive Technical Intelligence 12.0 14 3 Business Strategies 12.0 15 8 Linkages and Referrals to Other 11.9 16 21 Innovation Systems Identified Business Opportunities 10.5 17 14 Promotion and Trade Shows 9.9 18 20 Partnering 8.0 19 2 Access to Legal Advice 7.6 20 1 Export Development 5.9 21 17 International Trade Missions 5.8 22 19 SOURCE: Impact Evaluation 2007, p.
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For example, between 2002-03 and 2006-07, IRAP started and funded approximately 5,800 discrete projects, but only 4,100 firms were funded. Note in Table APP-A1-5 that the number of funded client firms has decreased by 21 percent between 2002-03 and 2006-07 while the total contribution funding values have declined only very slightly (0.8 percent decline)
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. These companies are not large enough to have extensive R&D departments -- instead they are faced with technical, financial or managerial challenges that are obstacles to their advancement.32 Clients span all industry sectors and Canadian geography; see the detailed regional client breakdown and description in Table APP-A1-6.
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Size of Firm. Between 2002-03 and 2006-07 the average number of employees in the firms that received funding was 32 employees.33 As mentioned earlier, over this five year period, about 67 percent of IRAP funded firms had fewer than 20 employees (23 percent had 1 to 4 employees, 25 percent had 5 to 9 employees and 19 percent had between 10 and 19 employees)
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technology, Research and Technologies biotechnology, Innovation Centre, Inc., Profile construction, aerospace, Victoria Advanced Composites fuel cells, Technology Council, Inc., Simon electrochemistry, Western Economic Fraser information Diversification Canada University, technologies, Green Steam engineering and physics Inc.37 West Advanced Chemistry and Alberta Innovates, e.g. Boreal Region: Materials, Advanced Arctic Energy Laser Inc., Alberta, Manufacturing, Alliance, BioAccess Manitoba Saskatchewa Biotechnology and Commercialization Harvest, n, Manitoba, Bioprocessing, Centre, Biomedical Userful Northwest Construction, Energy, Commercialization Corporation, Territories Environmental Canada, Calgary Quantiam (47 ITAs)
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manufacturing, life Business Development WinMagic sciences, medical Bank of Canada, Inc., Axiom devices, construction, Natural Sciences and Group Inc., and aerospace Engineering Research Hendrick Council of Canada, Seeds Inc.39 Foreign Affairs and International Trade Canada, Export Development Canada; Provincial Agencies: Ministry of Research and Innovation, Ontario Centres of Excellence, Ministry of Economic Development and Trade; NFP: ventureLAB, MaRS, Communitech, Sault Ste. Marie Innovation Centre, Northern Centre for Advanced Technology Inc., Ottawa Centre for Research and Innovation 39 NRC, "Ontario So Much to Discover," |
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Eastern Canada has significantly fewer funded firms, given the smaller population, with the largest number of recipients centered on the three key cities of Halifax with 23 firms, St. John's with 22 firms, and Fredericton with 14 funded firms.
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Project Duration. The duration of a typical IRAP funded project FIGURE APP-A1-11 Distribution of the NRC-IRAP funded firms.
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. In fact, according to the Impact Evaluation Report: There is a strong correlation between NRC-IRAP assistance and firm growth -- for example, for each 1 percent increase in both contribution agreement funding and advisory services, firms show an 11 percent increase in sales and a 14 percent increase in employment.42 TABLE APP-A1-8 Number of NRC-IRAP Funded Projects per Firm (by Fiscal Year)
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There is a positive and significant impact on productivity -- a 1 percent increase in NRC-IRAP assistance (both funding and advisory) lead to a 12 percent increase in firm productivity, while a 1 percent increase in funding led to a 3 percent to 5 percent decrease in production costs.43 There is a positive and significant relationship between NRC-IRAP assistance and R&D capacity and capabilities -- a 1 percent increase in financial funding led to a 13 percent increase in R&D spending by the firm and a 3 percent increase in R&D staff.44 In addition, based on a review of the 437 final reports from NRC-IRAP clients, 94 percent of clients reported an increase in their technical knowledge and capabilities, 70 percent reported an increase in their ability to conduct R&D, and 93 percent reported that they anticipate commercial benefits to accrue as a result of IRAP assistance.45 Most recently, the Director General of IRAP, Bogdan Ciobanu, shared the following impact numbers in a presentation (May 2012)
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to apply for NRC-IRAP funding to investigate Surface Mount Technology. As a result, sales to Sutherland-Schultz were so strong that RIM's annual revenue went over the $1M mark in 1990 for the first time in the company's history.
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in Figure APP-A1-12 to measure impact and benefits. This framework focuses on measuring five key outputs: increased revenues from goods and services developed by the project; total new employees; total new technical employees; new R&D spending; and equity raised as a result of the project.
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The Federal Budget is the government's most important annual policy statement reflecting through its announced spending, tax, and regulatory initiatives, the government's policy priorities for the year. Most recently, three brief success stories from the NRC-IRAP Program were highlighted in the Federal Budget 2012: The National Research Council's Industrial Research Assistance Program (NRC-IRAP)
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In this regard, the ITAs can also fund 3rd party innovation service providers in the local area who may offer SMEs services not available through IRAP or the NRC. In this way the ITA can strengthen the entire regional innovation cluster and ecosystem.
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and a rapid expansion in responsibility to deliver other federal programs (such as the Digital Technology Adoption Pilot Program) or to provide services to other federal program managers (such as performing technology and business assessments for the rapidly expanding Canada Innovation Commercialization Program)
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This raises issues in a decentralized federation of how IRAP could collaborate more closely with other federal and provincial programs (there are over 250 federal and provincial innovation support programs) to deliver relevant innovation services to a larger market of eligible SMEs.
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