Terms of Reference

Objective

Commercialization refers to the series of activities undertaken by firms to transform knowledge and technologies (whether developed in Canada or abroad) into new products, processes or services in response to market opportunities. Highly skilled workers (researchers, engineers, managers, etc.) are critical to the commercialization process, as is a culture that values innovation and entrepreneurship.

While fundamentally a private sector activity, the government supports commercialization through measures to improve the business environment, through the provision of direct support to firms and through its support of efforts to move ideas from universities and government laboratories into use. The government recognizes that basic research is critical and that support for this essential activity must continue. In launching the Panel, the government is seeking to ensure that its policies and programs in support of commercialization achieve the best possible outcomes for Canadians in all regions of Canada.

Structure

A panel of six Canadians has been named by the Minister of Industry. It is expected that the panel will:

• review reports and proposals from both public and private stakeholders
• hold informal roundtables across Canada to obtain informed comment on the panel’s preliminary analyses
• advise on an action plan to improve commercialization outcomes in Canada.

Timing

The panel is asked to provide its advice to the Minister of Industry in the Fall of 2005.

Areas of Interest

The panel is asked to advise the government on how to make a significant contribution to private and public sector commercialization efforts. Three key areas of interest are identified, but the panel’s work is also expected to reflect the strong inter-relationships and interdependency among these areas and the people who work in them. The panel is therefore asked to provide advice on how the government can proceed with an integrated strategy to bring about the fundamental changes required to improve Canada’s commercialization performance over the long term.

Business Environment

Most international reports (OECD, WEF, IMD) and domestic assessments (Conference Board, Ontario Task Force on Competitiveness, Government of Canada) note that Canada’s performance with respect to technological innovation and the uptake of leading edge technologies needs improvement. While performance and capabilities vary sector to sector, all reports urge greater technological sophistication. Many factors influence a firm’s propensity to use technology (profitability, exchange rates, personnel, location of markets, etc.) but the business environment created by government is a critical factor. With global supply chains re-structuring production, lower labour-cost countries joining the world’s trading system and product life cycles ever shortening with the advance of technology, Canada’s business environment must keep pace.

The panel is asked to advise on what changes to the business environment would yield the greatest improvement to the ability of Canadian firms to create new and improved products and services.

Support for Firms

Firms take the decisions that lead to the development of new products and services. Typically, while governments can support such decisions through the provision of a competitive business environment, most of the resources necessary for the development and implementation of new products and services come from the private sector. While international agreements ensure that direct support falls within strict parameters, all developed countries provide some form of direct assistance to industry for research and/or production

The panel is asked to advise on how the government can improve the design and delivery of its support for firms in their efforts to commercialize ideas.

Canada performs well with respect to new firm formation. However, new knowledge-based firms face unique challenges. Often their value propositions are not well understood by the risk capital community. Time to profitability is frequently long, involving many tranches of investment. Pressures to sell-out early may be intense especially when financing can prove difficult. Firms need to be "born global" which requires depth in international commerce. The skills required to create and grow a fledgling technology firm are unique and often difficult to find. Regulatory issues in areas of new technology are often complex.

The panel is asked to advise on how the government can enhance the likelihood of success for technology start-ups, by (for example) addressing their challenges in securing adequate risk capital, global market expertise and a skilled workforce.

Publicly Funded Research

The conduct of basic research is fundamental to the evolution of a knowledge-based economy. Funding of basic research is a critical role for government, and provides a solid foundation for the generation of new ideas, the fuel of a knowledge-based economy. The federal government has invested some $13 billion in new support for research and innovation over the last eight years, increasing Canada’s capacity to perform advanced research and helping to train some of the most highly qualified graduates in the world. Research performed and skills imparted are often driven by the internal dynamic of scientific research. But business decisions are driven by markets and the perceived needs of customers. A more effective interface between the business sector, publicly funded research institutions and government support programs will promote greater transfer of knowledge and skilled personnel, maximizing the potential for commercial outcomes from public research.

The panel is asked to advise on how the interface between business and public research institutions can be improved to promote more effective transfers of knowledge and skills to the private sector.