Alberta is setting the standard for the nation in terms of an innovative economy, but the country is still lagging in the economic shadow of the U.S., says federal Industry Minister Allan Rock.
Rock, who visited Calgary and Edmonton last week to announce funding for several public and private sector projects, said compared to other developed nations, Canada’s investments in research and development are “plainly insufficient.”
“The hard fact is that Canada, compared to the benchmark American economy, has been losing ground over the last 20 years, when you compare our standards of living – a troubling statistic to which Calgary is a happy exception,” Rock told about 200 corporate, civic and educational leaders at a one-day Innovation Summit.
“Compared to our competitors, we’re too slow to bring innovative products to market.”
The Innovation Summit was part of a series of regional meetings being held across the country by Industry Canada to gather suggestions from various
sectors prior to a national summit this November to develop a federal innovation strategy. An interactive website (www.innovationstrategy.gc.ca) has also been developed to enable Canadians to provide their views directly.
“That will really serve as a mission statement for the country,” said Rock, adding the Conference Board of Canada has agreed to monitor the effectiveness of the strategy and measure how it improves Canada’s competitiveness.
Rock’s remarks were echoed during a parallel “town hall” meeting at the summit, where senior Calgary executives gathered to discuss how to boost the profile of the city’s high-tech industry. The TechAction Town Hall meeting, one of a series being held across the country, was sponsored in part by the Canadian Advanced Technology Alliance (CATA) in association with KPMG LLP.
|Larry MacDougal, Business Edge|
|Industry Minister Allan Rock told business leaders that Canada is losing ground to the U.S. economy.|
While most who attended agreed innovation and creative energy are true natural resources in Alberta, one of the most pressing concerns raised at the
session was the continuing drought of venture capital in this province.
A recent poll conducted by CATA and KPMG showed access to venture capital is the big issue facing Calgary technology firms.
“There’s no shortage of great ideas in this city, but our promising entrepreneurs lack the financial resources to develop great ideas into great businesses,” said John Maduri, executive vice-president of Calgary-based TELUS Business Solutions.
Maduri said the private sector must do more to help create greater access to venture capital. TELUS, he noted, has a $100-million venture fund that invests in start-up businesses and emerging technology ventures.
Ken Cudmore of Calgary-based Technology Strategies Group Inc., which helps clients with funding opportunities for research and development, said that many small corporations aren’t eligible for venture capital and need other sources of funding.
“A lot of the time, money in this town is raised by friends, family and reputation,” said Cudmore. “If we could have some kind of a program like flow-through shares, or a small business equity corporation where the government gives a tax credit which provides a significant incentive for people to take a risk . . . I think it would provide a very good opportunity for people to invest in small businesses to get them to a point where venture capitalists would be interested in going forward.”
The provincial government needs to do more to stimulate investment in early-stage businesses, agreed Susan Miller, president and CEO of Inno-
centre Alberta, a non-profit company that offers business development programs for new high-tech businesses in Edmonton and Calgary.
A low tax regime, part of the much-touted Alberta Advantage, is not necessarily helpful to entrepreneurs, she added.
“They (the government) need to put their money where their mouth is,” Miller told the meeting, “and help by creating a tax environment that provides cash to early-stage technology businesses so we can build a critical mass in that area. It’s a question of walking the talk and supporting knowledge businesses. If we’re going to say that we want a knowledge cluster here, we’re going to actually have to put some money up front to encourage them to start.”
Promoting the flow of risk-tolerant capital to create new technologies is a priority of Calgary Technologies Inc., and CTI president John Masters told the summit that measures including tax and fiscal restructuring are needed to allow the private sector to be a greater source of innovation.
“Our number 1 challenge is attracting investment, capital, equity, and funding sources to facilitate from the creation of ideas through the development and commercialization,” said Masters. “At the end of the day, it’s really about creating wealth, and improving our quality of life and standard of living.”
Rock announced more than $10 million in funding initiatives during his trip to Alberta, including:
* More than $6 million toward the development of e-learning technology, with project funding coming from CANARIE Inc., a not-for-profit corporation supported by its private and public sector members, project partners and Industry Canada.
* $3 million to the Southern Alberta Institute of Technology from Western Economic Diversification Canada (WD) for the new SAIT aeronautical training facility.
* $1.9 million from WD and the provincial government for the Network for Emerging Wireless Technology (NEWT), a wireless test centre located at the Alastair Ross Technology Centre in Calgary. (See related story headlined 'Alberta's wireless industry gets leg up with NEWT').
* A $246,000 repayable investment for the Calgary-based manufacturing facility of General Dynamics Canada Ltd. to develop technology to improve land-mine detection.