Home : Reports and Publications : Audit & Evaluation : Evaluation of the ITPP and FJST - May 2004
2. Relevance
The relevance issue and questions examined the extent to which ITPP and FJST continue to be relevant to the needs of users and other stakeholders.
2.1 Priorities, Mandate and Strategic Objectives
Are the ITPP and FJST consistent with WD and broader government priorities? How do the Programs directly support the WD mandate and current strategic objectives?
This issue was only addressed to the 14 WD respondents. Almost all these respondents (12 of 14) indicated that the FJST and ITPP are consistent with WD’s and broader government priorities and objectives, and in particular, the strategic directions on innovation and entrepreneurship. They note that WD’s mandate, which has remained consistent since it was established in 1987, is to promote the development and diversification of the western Canadian economy, coordinate federal economic activities in the West, and reflect western Canadian interests in national decision-making.
As noted in WD’s 2003-2004 Estimates, Report on Plans and Priorities, the strategic focus of WD is now comprised of three pillars: Innovation, Entrepreneurship, and Sustainable Communities, directions that are congruent with the Government of Canada’s economic development priorities, and those of the Industry Portfolio. Innovation and Entrepreneurship have been a major focus for several years, but WD activities and priorities have evolved in response to emerging economic trends, government priorities, and WD’s own experience. The 2003-2004 report notes that:
- Within the Innovation pillar, WD works to enhance the rate of technology development, commercialization and adaptation; improve the western Canadian knowledge infrastructure and capacity; and increase the growth and job creation in knowledge-based sectors.
- The Entrepreneurship pillar improves access to capital, services and information; promotes increased trade and export opportunities; and improves the skills and capacity of western Canadians and western Canadian businesses to enhance their competitiveness in the global economy.
Most respondents noted that WD’s mandate is to improve/diversify the economy of western Canada. ITPP supports the mandate with its focus on export readiness and trade development that fit the entrepreneurship objective. Broader government objectives for expanding trade are also served by the program. The same respondents noted that FJST is consistent with WD’s innovation objective as it applies to both new and old economy firms, although most of the participants are technology and manufacturing firms (Q 3 – 45.6% and 18.1% respectively). The focus of FJST on skills development and retention addresses government concerns about the brain drain. The program provides low cost access to these skills. The program also directly supports the innovation agenda. One respondent noted that a previous study showed a slower technology adoption rate by western Canada SMEs in comparison to the US. “By pulling SMEs to a higher standard, FJST is addressing that issue.”
A small minority (2 of 14 WD respondents) noted that ITPP and FJST are actually wage subsidy programs, and only indirectly support WD objectives and priorities of entrepreneurship and innovation. Furthermore, achieving the entrepreneurship and innovation objectives is conditional upon the graduate staying with the firm and/or western Canada. They noted that WD has changed its strategic direction in terms of program delivery. WD used to have the capacity to provide client services, such as help with business plans, which was an additional asset for companies under ITPP and FJST to draw on. These services were withdrawn due to budget cuts, with WD largely contracting out program delivery to a third party. These two respondents pointed out that ITPP and FJST are the only two programs where WD deals directly with SMEs; as one respondent noted, “they are the only programs where we (WD) actually cut a cheque to the SME”. The two programs, FJST and ITPP, represent the “old way” of delivering services to SMEs in western Canada, in their view.
Both (of the dissenting) respondents pointed to WD’s “new way” of service delivery. As noted in the 2003-2004 Estimates, Report on Plans and Priorities, WD is a small department with limited resources. In order that western Canadians have direct access to the products and services that support their economic success, the Western Canada Business Service Network (WCBSN) was established. This network is a partnership of various organizations that help entrepreneurs across the West, in both urban and rural communities, find what they need to establish a business or make it grow. Services range from marketing information and funding options to counseling and support. The network comprises over 100 points of service, including:
- Canada Business Service Centres (CBSCs), which are managed through federal-provincial cooperative agreements that provide a single, seamless gateway to information for business, through offices in Vancouver, Edmonton, Saskatoon and Winnipeg.
- Community Futures Development Corporations (CFDCs), which are volunteer-led, non-profit organizations located across Canada that take a grassroots approach to economic development. The 90 CFDCs across the West deliver a variety of services that include strategic economic planning, technical and advisory services, loans to SMEs, and self-employment programs aimed at youth and entrepreneurs with disabilities.
- Women’s Enterprise Initiative provides business advice and information, networking, mentoring, and access to capital specially designed for women clients.
2.2 Meeting Needs, Continuing Requirement
Are the ITPP and FJST meeting the needs of SMEs in western Canada in terms of improving their abilities to export (ITPP) and improving their competitive positions through technology development (FJST)? Does there continue to be a real requirement for these Programs?
All interviewees (government, industry and graduates) indicated that ITPP and FJST are meeting the needs of SMEs in western Canada, in terms of improving their abilities to export and their competitive positions through technology development. Most interviewees further noted that the need increases as the size of the firm decreases, with very small firms having the greatest need. For these firms (less than or equal to ten employees), the addition of one graduate represents a significant increase in staff. Virtually all industry interviewees noted that there is a “training cost” to hiring a recent graduate. Graduates have little or no experience, so there is a significant amount of downtime on the part of a more experienced and senior individual, to train the graduate on the processes and methods used by the firm. The wage subsidy from FJST/ITPP helps to mitigate against this “learning curve” period.
The programs were also endorsed by the survey respondents. Details of the survey responses are presented in the following two chapters on Success, and Effectiveness respectively but in terms of respondents’ views on the need for the programs, we can look at their answers to the question of whether the programs should continue. Of the FJST participants, 94.9 percent said yes, as did 88.7 percent of ITPP participants, and 97.1 percent of participants in both programs.