6) Results Achieved:
FINANCIAL AND ADVISORY OUTCOMES
i) Increased SME technical R&D capability and capacity
- Contributed to increasing the capacity of SMEs to undertake highly innovative technology-based R&D projects:
- Funded the hiring of highly qualified and skilled engineers and scientists as well as internships for university and college graduates: approximately 675 graduates (331 of which were new) through the HRDSC’s Youth Employment Strategy ($4.99M) and funding top up with IRAP contributions ($1.15M).
- Contributed to firms by providing technical, research, business assistance to Canadian SMEs (7,645 funded and non-funded firms).
- Co-located NRC-IRAP staff within NRC institutes, universities and research facilities to facilitate linkages (Total of 212 NRC-IRAP ITAs).
- Contributed funding through IRAP-TPC for pre-commercialization assistance to SMEs ($2.9M for 28 projects in the work phase).
- Brought together the key players in the Canadian Innovation System:
- NRC-IRAP worked closely with NRC’s 17 research institutes, 2 technology centres and NRC-CISTI, more than 160 of Canada’s leading public and private research and technology based organizations; Federal Partners in Technology Transfer (FPTT) involving 17 federal government departments and agencies and has established formal and informal linkages with S&T organizations in various countries.
- NRC-IRAP worked with various NRC Institutes across the country. For example, NRC-IRAP Quebec Region provided a linkage between a Life Sciences client and NRC-IBS. The Institute provided technical advice to the NRC-IRAP funded client project. NRC-IBS assisted the firm in visualizing the various components of the brain.
- NRC-IRAP worked with other government departments such as NSERC, BDC, Natural Resources Canada (NRCan), Communications Research Center (CRC), National Defence (DND), etc. For example, the Program has identified an NRCan scientist to act as a technical resource for an Ontario company developing alternative energy technology. This scientist provided technical advice to assist in the development of the project and will work with the NRC-IRAP client throughout the project. NRC-IRAP approved and funded this project.
- NRC-IRAP continued to work closely with academia. For example, the NRC-IRAP Atlantic/Nunavut Region had a contribution agreement with the University of New Brunswick (UNB) to support the innovation needs of Canadian SMEs through the provision of short-term technical assistance from faculty and staff at UNB. Twenty-two projects were submitted of which 18 were pursued. This service resulted in a positive impact in both business development and support to the regional business community. Additionally, these contacts brought benefits to the university researchers by creating partnership for larger research projects as well as helping to give the university a positive image in the business community.
- NRC-IRAP continued to collaborate with various innovation-oriented organizations. For example, the NRC-IRAP West Region had a contribution agreement with the Red Deer College’s (RDC) Central Alberta Regional Innovation Network (CARIN). CARIN was established to: 1) develop and try new processes and technologies; 2) educate and train industry personnel and students in new techniques, business and management skills; 3) engage and involve more Red Deer College faculty, staff and students in industry-relevant problem solving and applied research projects; and 4) increase the utilization of advanced manufacturing technologies in industry in the transition to a knowledge-based economy. This initiative created new partnerships between industry, academia and the three levels of government. Longer term measured outcomes from this regional innovation initiative will be an increase in the number of technology based manufacturing firms as well as in the number of well trained people employed in this sector. Other government departments, Red Deer College and the private sector contributed funds to this project.
- Fostered and maintained working relationships with NRC Research Institutes:
- NRC-IRAP continued to develop and maintain strong relationships with NRC Research Institutes. Over the course of the year, NRC-IRAP created five sector teams aligned with NRC’s key sectors and national programs, which resulted in increased interaction, linkages, sharing of plans and industry-related information. At the individual client level, NRC-IRAP often supports tenant firms within NRC’s IPFs.
- NRC-IRAP works closely with NRC’s research institutes in supporting the development of technology clusters.
ii) Increased SME management, marketing and finance capability and capacity
- Assisted with Competitive Technical Intelligence:
- In FY 2007-08, NRC-IRAP expended $1.33M for over 2,900 various CTI services provided by NRC-CISTI to NRC-IRAP staff that optimized Program advisory services to clients to make the best investment possible. Types of services included user assistance, quick references, information searches, information reports, CTI briefs, scientific, technical and medical alerts, training and presentations. For example in the NRC-IRAP Atlantic/Nunavut Region, an ITA was concerned with competition and other issues that could impact the client’s project and on the long-term viability of the firm. The CTI assessment provided by NRC-CISTI provided an overview of the patent technology, the competitive products and the industry trends. The assessment confirmed and enhanced the client’s knowledge of the competition. Although it did not change the project objectives, the ITA had increased confidence that the client‘s direction was sound.
- Encouraged and facilitated the sharing of manufacturing best practices and processes:
- Enabled the hiring of university and college graduates with specific skills and expertise that can be used to advance innovative projects:
- Youth Employment Initiatives: In FY 2007-08, there was an increase in the graduate placements with approximately 675 graduates including 331 new graduates provided with the opportunity to work with 454 SMEs across Canada ($4.99M from HRSDC and $1.15M from IRAP).
iii) Growth of firms as a result of technology development project support
- As stated in the 2007 NRC-IRAP Evaluation in the previous pages of this document, NRC-IRAP client firms have exhibited growth, both in real and comparative terms. The 2007 NRC-IRAP Evaluation states: …it was found that for each 1% increase in both contribution agreement funding and the supply of advisory services, firms exhibited an 11% increase in sales and a 14% increase in employment…approximately 77% of SME clients indicated that NRC-IRAP “allowed (the) firm’s expansion”, with 60% stating that the impact was “moderate” to “large”. Additionally, 75% of SMEs indicated that the Program “increased (the) company’s net worth”; with 53% identifying that, the impact was “moderate” to “large.”
- A study conducted in BC indicated that when compared to non NRC-IRAP clients, the Program’s client firm revenues and employment growth were higher by more than 20% - 30%. Furthermore, payroll grew faster for NRC-IRAP clients than non-clients by about 25%. Shareholder equity growth of clients outperformed that of non-clients by a factor of almost seven.
NETWORKING OUTCOMES
i) Enhanced SME connections to technology and business networks to source support
- The broad industrial sector experience and expertise within the NRC-IRAP ITA cross-Canada network represents key areas of Canadian technology and the Program’s network strength for assisting SMEs. The SME-ITA relationship is another fundamental element for the success of the Program. Finally, the extensive relationships that NRC-IRAP has cultivated over time with stakeholders and players in the regional, national and international innovation systems also ensures the Program is a key national enabler of industrial innovation.
- In FY 2007-08, all NRC-IRAP regions continued to provide contribution funds to organizations, which complemented NRC-IRAP’s core advisory services and served to provide a needed array of innovation and business services specific to SMEs on a regional basis. NRC-IRAP contributed to 196 projects with 165 different innovation-support organizations for a total of $11.98M. Enhanced services included the organization of visits, international missions and conferences for SMEs; provision of business coaching, mentoring, linkages and networking opportunities; support for technology cluster development; access to competitive technical intelligence, etc.
- One example of enhanced services was in the NRC-IRAP Quebec Region, which had a contribution agreement with the “Institut de développement de produits (IDP)”. The objectives of this agreement were to stimulate innovation and to assist manufacturing firms in Quebec to become more competitive by doing eco-diagnostics of their products. In FY 2007-08, this organization conducted 20 product eco-diagnostics, with a satisfaction rate of clients of 96%.
ii) Increased innovation-related services available to SMEs
- 227 ITA delivery staff provided customized ongoing technical advisory services and, in cases where warranted, financial assistance. In total 7,645 firms across Canada received NRC-IRAP assistance in one form or another during FY 2007-08.
Funded innovation through contributions to 1,971clients (including 554 firms new to NRC-IRAP) and 2,421 projects (firms, youth, organizations and IRAP-TPC) of which 1,565 projects were new in FY 2007-08:
- $74.10M NRC-IRAP contributions made to SMEs ($67.55M for 1,687 IRAP projects) and Youth Employment Initiatives ($4.99 (HRSDC funds) and $1.15M (IRAP funds) for 655 youth projects, of which $0.42M came from Atlantic Initiatives funds.
- $2.91M conditionally repayable contributions were expended for 28 projects still in their pay out phase through IRAP-TPC pre-commercialization assistance program that was designed to help SMEs with pre-commercialization of new and improved technological products, processes or services. The Technology Partnerships Canada Program expired on December 31, 2006. NRC-IRAP ceased awarding new IRAP-TPC investments as of April 1, 2006. In FY 2007-08, 178 contribution agreements were closed; 28 projects were still in their work phase; 24 were in their launch phase; and 228 were in their repayment phase.
- $11.96M was expended to support 196 projects with 165 organizations to provide technical and research assistance to Canadian Industry, of which $0M came from the Atlantic Initiatives Fund.
iii) Greater number and stronger innovation players with increased consortia within the community
- Contributed $11.96M to organizations, maintained formal linkages with more than 165 of Canada’s leading public and private research and technology-based organizations. Every NRC-IRAP region continued to have active relations with key innovation support organizations.
- For example, NRC-IRAP Ontario had a contribution agreement with the Innovation Synergy Centre in Markham (ISCM) that enabled 26 mentors/advisors to provide services that assisted researchers within medium-sized firms to access business related advice. ISCM also established an Investment Network with links to existing Angel Networks. In FY 2007-08, ISCM served 328 new clients with an average company size of eight employees, had approximately 3,000 client interactions and organized 20 business related workshops such as the Money Chase: Sources of Early Stage Financing, with over 1,000 attendees. A total of $1.7M in financing to four firms resulted through linkages within the ISCM Investment Network.
- NRC-IRAP also has or is part of formal agreements with various Canadian institutions. For example, the Program was actively involved in the NRC/NSERC/BDC Joint Strategy. NRC-IRAP had two national agreements: one with ISTPC, which will further benefit Canadian SMEs in their R&D activities and their efforts to source international linkages and one with NRC-CISTI to obtain CTI services for NRC-IRAP staff.
- In 2007-08, NRC-IRAP established five Sector Teams in the following areas: aerospace, bioproducts, construction, information and communication technologies and manufacturing and materials. Activities in all 5 sector teams included: 175 supported clients (with 17 linkages), 81 project assessments, 25 reports/collections were purchased, 8 technical reports were developed, participation in 10 studies/surveys, 3 organized workshops with 153 participants, assistance to 11 external workshops, 8 consultations with industry, 82 organizations were reached, 26 contributions to NRC events, 12 participation in contribution agreements with organizations, 5 contributions to events with external collaborators, 29 attendances to conferences/training events and 12 attendances at networking events.
iv) Increased adoption/commercialization/collaboration with respect to international endeavours
- In 2007-08, NRC-IRAP organized 15 international outgoing missions, 7 collaboration and key relationship management visits and 5 networking and SME partnering visits to 21countries in North America, Europe and Asia.
- NRC-IRAP had six ongoing international agreements with Shanghai, China, India, Guangdong, Beijing, Spain and Ireland. For example, the agreement with the Science and Technology Commission of Shanghai Municipal Government provides a framework for cooperation in areas of R&D, S&T and commercialization and assisted in identifying 3 NRC-IRAP clients that have potential and interest in S&T cooperation with firms and organizations in Shanghai. No new international agreements were signed in FY 2007-08.
v) Increased understanding of international opportunities
Assisted SMEs in connecting with international programs, sources of technology and technical intelligence:
- The Program continued to work with DFAIT and other government departments to increase the technical R&D capabilities/capacities of NRC-IRAP clients.
- In March 2008, DFAIT and the Science Centre in Ukraine organized the first Canada - Ukraine Business Summit to help Canadian companies identify new trade, technology and investment opportunities. This summit which was attended by SMEs and representatives from NRC-IRAP was structured to provide the Canadian companies with an opportunity to hear and meet other senior business representatives from Canada and the Ukraine with the ultimate goal of having Canadian SMEs access Ukrainian technologies.
- NRC-IRAP continued to participate in the Canada Open House pilot project. The main purpose of the pilot project was to enhance NRC-IRAP’s capacity to assist its SME clients by providing effective technology matchmaking avenues otherwise not available. Since October 2004, the matchmaking team has interviewed 80 foreign technology firms; proposed matches to 110 NRC-IRAP Canadian SME clients; established 13 serious relationships and fostered 5 confirmed partnerships for those SMEs. The initiative has introduced a “Canadian option” for S&T collaborations for Canada and partner countries. This brings the success rate of linking interested parties to 22.5%.
millions of dollars |
|
7) Actual Spending 2005-06 |
8) Actual Spending 2006-07 |
9) Planned Spending 2007-08 |
10) Total Authorities 2007-08 |
11) Actual Spending 2007-08 |
12) Variance(s) between 9 and 11 |
|
13) Program Activity (PA) |
Support for Innovation and the National Science and Technology Infrastructure |
14) Total Grants |
|
|
|
|
|
|
14) Contributions |
79.0 |
76.6 |
85.9 |
87.8 |
86.1 |
(0.2) |
14) Total Other Types of TPs |
|
|
|
|
|
|
15) Total PA |
79.0 |
76.6 |
85.9 |
87.8 |
86.1 |
(0.2) |
16) Comment(s) on Variance(s): N/A |
17) Significant Evaluation Findings:
NRC-IRAP has helped to increase the innovation and financial performance of Canadian SMEs:
- Approximately 12,364 NRC-IRAP funded projects culminated in 39,186 new/ significantly improved products/ services or processes over 1996-2001—approximately 3.2 innovations per NRC-IRAP funded project;
- Approximately $11.3 billion actual sales revenues are linked to NRC-IRAP-assisted innovations--$4.2 billion attributable to NRC-IRAP over 1996-2001 and equivalent to 11 times NRC-IRAP’s total contributions to client projects during this period;
- Approximately $37.6 billion forecasted future sales revenues are linked to NRC-IRAP-assisted innovations—$14 billion attributable to NRC-IRAP during the remainder of clients’ innovation life cycles; and
- Approximately 32,600 actual additional jobs are linked to NRC-IRAP-assisted innovations—12,025 jobs attributable to NRC-IRAP over 1996-2001 and equivalent to $32,000 of NRC-IRAP contributions per job created during this period.[1]
NRC-IRAP has also provided value and wealth creation for Canada:
- Approximately 37% of its client innovations are considered ‘World Firsts’, 66% ‘Firsts in Canada’ and 96% ‘Firsts in the Firm;
- Its contributions to client projects are associated with total investments for all phases of the clients’ innovation projects equivalent to approximately 12.5 times NRC-IRAP’s contributions [2]--firms’ own equity make up almost 50% of these investments;
- Estimates from the evaluation’s socio-economic analysis study, indicate that NRC-IRAP provides the public with value for money - its contributions provide a return to the federal government in the form of present and future corporate income taxes valued at approximately 11 times the value of NRC-IRAP’s contributions [3]; and
- NRC-IRAP is recognized by clients as the top government technology support program and the top external source of information (outside of firms’ supply chain and publicly available information).
[1] Data on number of innovations have been extrapolated to IRAP project population of 14,564; data on sales revenues and jobs are based on survey of 684 IRAP clients extrapolated to IRAP client population of 9,158; average client innovation cycle estimated at 10 years; attribution to IRAP is based on 37% incrementally of IRAP funding; total IRAP contributions to client projects for 1996-2001 was $386 million.
[2] Data on additional investments have been extrapolated to IRAP project population of 14,564 and include investments for all phases of clients’ projects that may not have been assisted by IRAP.
[3] Data on return to government is based on economic modeling of 26 individual IRAP client cases, including modeling of client actual annual revenues, expected future revenues over remainder of innovation life cycle, fixed and variable costs, profits, machinery/equipment depreciation, 33% corporate income tax rate, 6% social discount rate and 38.4% corporate income tax attribution to IRAP. |
URL to 2007-08 evaluation report: http://www.nrc-cnrc.gc.ca/aboutUs/audit_e.html |
18) Significant Audit Findings:
An internal audit of NRC-IRAP was undertaken by NRC’s Internal Audit during the period of 2005-2006 to 2006-2007. The broad objective of the audit was to assess the extent to which NRC-IRAP is managed according to sound management principles. The Audit Opinion and Statement of Assurance of NRC’s Chief Audit Executive concluded that NRC-IRAP’s management control and accountability frameworks are generally adequate and that NRC-IRAP management has implemented the majority of the recommendations in its May 2004 Program Improvement Plan. The internal audit made four recommendations to NRC-IRAP management: timely development of annual business plans; an appropriate monitoring control framework for on-site visits to contribution recipients; a simplified system to assist NRC-IRAP staff in exacting and demonstrating due diligence with respect to appropriate project amendments; and a nationally-coordinated approach to the collection, analysis and reporting of performance information.
In response to NRC Internal Audit recommendations, NRC-IRAP prepared a management action plan. This plan includes actions that have already been completed and others that are under way or will be completed within the next three fiscal years. This includes: implementation of NRC-IRAP’s 2008-2009 – 2010-2011 business plan; the current Financial Monitoring Requirements (FMR) process for Contributions to Firms and Contributions to Organizations; developing and implementing standard operating procedures to improve records management of project amendment information; working with NRC-IRAP regions and NRC’s Planning and Performance Management to enhance the performance measurement aspect of the Program’s performance management strategy and reporting; undertaking a review of NRC-IRAP’s system user requirements; and updating or replacing NRC-IRAP’s existing client management information system (SONAR). |
URL to last audit report: http://www.nrc-cnrc.gc.ca/aboutUs/audit/irap/irap_e.html |
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