ARCHIVED - Inter-Sectoral Partnerships for Non-Regulatory Federal Laboratories

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Section 3 – S&T Linkages Involving Federal Laboratories, Academia and the Private Sector

S&T linkages among the government, academic and private sectors in Canada and abroad take a variety of forms; including: inter-sectoral transfer of ownership and control; contracting-out of services; partnerships and consortia; and, informal collaboration. In some cases regional and municipal governments may be involved in addition to the national government.

3.1 Linkages with Academia

Many linkages between federal research facilities and academic institutions have been developed over the years. The Association of Universities and Colleges of Canada (AUCC) identified nearly 80 federal or joint federal-academic research facilities located on or near 33 university campuses where research collaboration is taking place. It is estimated that about 3,400 federal employees are involved in these collaborations. Moreover, several hundred government researchers are teaching or supervising university students as adjunct professors across Canada.

There are clear mutual benefits to strengthening government-academic institution research linkages, including: increased access to, and consolidation of, human and financial resources; increased research and training opportunities for students; and enhanced national and regional economic development through the establishment of strong clusters involving participation of the private sector.

Examples

Agriculture and Agri-Food Canada and its provincial counterparts have been active in building linkages with academic institutions for decades. For example, the Ontario government transferred most of its in-house agricultural research to the University of Guelph (Guelph). Ministry staff members were transferred to Guelph and became university employees. Under the funding agreement, Guelph manages the research and education programs and related facilities (e.g., diagnostic testing laboratories) previously managed by the ministry. The contract also provides Guelph with funds to deliver diploma agri-food education programs at Guelph's Ontario Agricultural College and the University's Colleges at Alfred, Kemptville and Ridgetown. Guelph operates an agri-food laboratory and an animal health laboratory providing diagnostic support to the ministry, the food industry and the province's livestock (e.g., BSE testing) and poultry producers (e.g., West Nile virus testing).

In 2005, the University of Manitoba, Agriculture and Agri-Food Canada (AAFC) and the St. Boniface General Hospital entered into an agreement to jointly manage an integrated research program in the Canadian Centre for Agri-food Research in Medicine. In June 2006, the NRC, the University of Prince Edward Island and AAFC signed a cooperative research and development agreement (CRADA) to support the creation of the Centre for Bio-Resources and Health (CBH).

The agreements governing these two recent developments establish clearly how the parties will integrate their research, education and commercialization resources and capacities and how the occupation of space, use of equipment, intellectual property, technology transfer, commercialization activities and confidentiality will be managed.

The recently established National Institute for Nanotechnology (NINT) represents another type of alternative management arrangement. NINT operates as a partnership between the National Research Council, the Province of Alberta and the University of Alberta, and is jointly funded by the three partners. The partnership owns major facilities housing multi-disciplinary research activities related to nanotechnology and involving researchers in physics, chemistry, engineering, biology, informatics, pharmacy and medicine.

3.2 Linkages with the Private Sector

Although collaborative linkages between government and private sector research efforts are fairly common across many federal laboratories, formal long-standing relationships are relatively infrequent and restricted to a few industrial sectors. Such linkages are far less common in Canada than in other developed countries.

Examples

Privatization of federal research facilities – the transfer of full ownership and control to a for-profit entity – has occurred relatively infrequently in Canada but can be illustrated by the creation of the for-profit BC Research Corporation from the BC Research Council. Part of the corporation was spun off as Vizon Scitec and acquired by CANTEST, which performs testing services for Health Canada, the Canadian Food Inspection Agency, and Fisheries and Oceans Canada.

In 1979, a not-for-profit entity was established when the Eastern and Western Wood Products laboratories of the Canadian Forest Service became Forintek Canada, an independent, not-for-profit corporation. Forintek is a unique partnership involving the federal government, six provincial governments, and 150 private companies. It has also benefited from on-going financial support from the federal government.

The new Canadian Wood Fibre Centre (CWFC) brings together forest sector researchers to develop solutions for the Canadian forest sector's wood fibre related industries in an environmentally responsible manner. The Canadian Forest Service (CFS), a sector of NRCan, is a key contributor to the CWFC which is staffed by CFS employees housed in CFS research centres across Canada. This Centre is an integral part of the newly created FPInnovations that amalgamates three existing not-for-profit forest research institutes – FERIC, Forintek, and Paprican – into a national private-public sector partnership. The research program of FPInnovations integrates a wide array of forest research activities, from the genomics of wood formation to the development of diverse new processes, products, and markets for Canadian wood fibre. The CWFC is to be compliant with the strategic direction and the policies of its two parent organizations, CFS and FPInnovations. Its research direction and orientation are determined by the Board of FPInnovations through its President and Chief Executive Officer.

Canada also has several examples of government-owned/contractor-operated (GOCO) entities with testing and evaluation activities that could be classified as "regulatory." Since 1953, the Weir Group PLC (formerly Peacock Inc.) has operated National Defence's Naval Engineering Test Establishment (NETE), in Montréal, as a GOCO. NETE provides a broad range of multi-disciplinary engineering test and evaluation services, directed at naval equipment, combat and control systems, as well as information and communication systems. The facilities and services of NETE are also available to the private sector on a contractual basis. A similar example of this model is the Motor Vehicle Test Centre (MVTC) in Blainville, Québec - a Transport Canada facility operated as a GOCO since 1996. In addition to supporting Transport Canada's responsibilities in compliance enforcement and regulatory development, the operator also provides testing services to external clients.

3.3 Inter-Sectoral Linkage Arrangements in Other Countries

Several other member countries in the Organization for Economic Co-operation and Development (OECD) are fostering collaborative approaches to S&T among government, academic and private sector organizations. They have introduced structural reforms, changed S&T strategies and implemented new policies. These initiatives have been broadly aimed at changing the role played by government in supporting research through a greater focus on strategic planning and oversight and on enabling research-performing institutions to function more efficiently and competitively by according them enhanced autonomy.

A notable feature of the foregoing developments has been a drive to maximize benefits from linking science and innovation by expanding the use of public-private R&D partnerships as a means of breaking down traditional "silos" and promoting inter-sectoral integration. In a number of instances, realignment of S&T activities between public and private sectors has involved partial or full commercialization of some S&T establishments and, in others, it has involved a move to contract-based competitive supply. Enhanced commercialization of S&T per se is being pursued both through major programs of privatization of both regulatory and non-regulatory laboratories and/or through creation of new government agencies that have special authority to pursue private-sector-like activities.

To illustrate the diversity of inter-sectoral S&T integration, developments in six countries are described in Appendix II. This diversity in patterns of inter-sectoral S&T management arrangements among industrialized countries reflects differences in governance structures and accountabilities, the nature of the jurisdictional relationship between the national government and regional governments, the financing and governance of academic institutions, and the industrial structure. Some features of these approaches are of potential relevance to Canada. However, there is no particular approach that can serve as a generally applicable model in the current Canadian science and innovation system.

3.4 Typologies Of Alternative Management Arrangements^[9]

The key variables involved in the wide range of alternative management arrangements reviewed by the Panel are:

• The types of organization involved in governing or managing the alternative arrangements
• The nature of the transformations involved in creating the alternative arrangement
• Governance relationships
• The time horizon
• The ongoing role of the federal government in relation to alternative arrangements
• Financing channels
• Location

The typologies commonly associated with these variables are provided in Appendix III. The list of relevant typologies can vary depending, for example, on whether the development under consideration is a new S&T endeavour or involves alternative management arrangements to be applied to an existing non-regulatory laboratory.

Given the number of potential characteristics associated with each typology, it is obvious that the number of potential models (i.e., particular combinations of characteristics) is very large. Based on the information reviewed by the Panel, the most common models currently used in Canada have the following characteristics:

• not-for-profit, cooperative arrangements without a formal joint governance agreement to cover integration of S&T;
• operating in single locations (i.e., not networked);
• not involving changes in employment status of personnel;
• operating for indefinite terms; and,
• no change in ownership of assets or sources of funding.

These commonly employed models do not, in the Panel's view, result in an optimal level of S&T integration. While they may represent examples of useful collaboration and networking, they do not result in the level of complementarity and synergy that can be achieved through models based on close integration of the work of scientists from different sectors.

Given the qualitative and quantitative diversity of federal non-regulatory S&T activities, there is likely no "one-size-fits-all" model of close integration. The Panel has concluded that there is, however, a feature of models of close integration that is required, in the current Canadian context, to achieve the full scope of the four core objectives of the Government's transfer strategy; namely, joint sponsorship and management, by the federal government, academia and/or the private sector, of unified programs of R&D. Unified programs of R&D may also be a feature of models involving full transfer to non-governmental entities; but these programs are likely to address a narrower range of objectives. In either case, close and effective integration does not require the partners/participants to have identical purposes in mind (although they may) – only that the purposes are complementary and the integrated scientific activities will serve those purposes.

Examples of joint sponsorship and management of S&T already exist and the building blocks for establishing new ones (e.g., existing proximity of scientists from different sectors to each other) are already in place. It should be noted, however, that while co-location may be a necessary requirement for some types of S&T collaboration, that is not always the case. For example, there are opportunities for extending the integration initiative beyond individual nodes of S&T integration to include "networks of centres of S&T integration" involving more than one federal lab with more than one academic institution and/or private sector counterpart operating in more than one location or region and perhaps internationally.

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