In 2000, Industry Canada agreed to provide a financial contribution of $3 million to the Innovation and Innovation Commercialization Initiative of the Industrial Research and Development Institute (IRDI) over a three-year period in order to enable the Institute to expand its contract research and development services to small and medium-sized enterprises (SMEs). Subsequently, as a result of deteriorating economic conditions which limited the rate of expansion of these services, the Agreement was extended by one year.

Industry Canada engaged BearingPoint to carry out an evaluation study of its support to IRDI. The objectives of the study were to:

(a) Document what has been accomplished as a result of the Industry Canada contribution.
(b) Describe the expected future benefits arising from these accomplishments (including IRDI’s alliance with Georgian College).
(c) Document the lessons learned from IRDI’s experience.

BearingPoint’s approach to conducting the study included a document review, discussions with Industry Canada officials, and interviews with IRDI officials, Georgian College officials, and SMEs.

An overriding finding of the evaluation was that the Industry Canada contribution enabled IRDI to continue its services to SMEs until the relationship with Georgian College could be established.

The evaluation examined five issues:

How has IRDI used the Industry Canada contribution – what activities have been supported by these funds, and what outputs have been produced?

What valuable services have been provided to SMEs as a result of the Industry Canada Agreement?

Given IRDI’s current situation and plans, what services can be expected to be provided to SMEs in the future?

What were the key factors that enabled IRDI to enter into the arrangement with Georgian College?

What are the expected benefits from IRDI’s arrangement with Georgian College?

The starting point for identifying the issues outlined above was the IRDI Evaluation Framework study carried out by BearingPoint in the Spring of 2002. However, there have been significant changes in IRDI’s situation since that study was prepared, particularly the arrangement that has been made with Georgian College. As a result of these changes, the issues outlined in the framework study were modified accordingly.

In examining the first of the issues, IRDI projections were compared to actual achievements in the following areas:

Marketing activities
Education and training programs
Capacity development
R&D; services to SMEs.

With the exception of the mass mailing marketing campaign, the marketing activities were of high quality and well executed. Education and training was less successful. This became less of a focus for IRDI during the latter period of the contribution, as they chose to concentrate on project activities that provided higher revenue potential. Training is still seen as a very important investment by IRDI officials, however, as it provides companies with increased awareness of new processes and technologies. The agreement with Georgian College should enable IRDI to expand its education and training activities. The capacity development initiative suffered because the majority of the investment was used to support SME services, and most of the objectives in this area were not achieved (although it should be noted that there was reported to be overcapacity in staff at the beginning of the contribution period). With regards to R&D; services, some of the objectives in this area were achieved, while others fell short. In particular, while IRDI has been successful in expanding its SME client base, revenues and profits from this component of their operations have fallen short of forecasts.

Regarding evaluation issue #2, the Industry Canada contribution enabled IRDI to provide valuable services to SMEs, such as product feasibility analyses and concept design. It was estimated by IRDI that approximately one-third of their SME clients could not have been served in the absence of the contribution. The SME clients interviewed were very happy with IRDI’s services and would consider using IRDI services again in the future.

Regarding future services to SMEs, IRDI is expected to continue to provide the same sorts of contract R&D; services (e.g., development of innovative manufacturing processes, improvement of designs for parts and tools, identification of cost savings), but this will be done in a more focussed way. IRDI is also expected to increase its course offerings to SMEs.

The Industry Canada contribution was an important factor in effecting the arrangement with Georgian College:

It enabled IRDI to continue the SME component of its business, so that services to SMEs can become a potentially viable part of the joint IRDI-Georgian College operation.

It made IRDI more financially viable and attractive.

It enabled Georgian College to gain a better understanding of IRDI’s strengths and weaknesses, as a result of being able to observe IRDI’s full operations over a significant period of time.

Finally, IRDI’s arrangement with Georgian College created synergies between the two institutions, because of the college’s focus on applied education and training and IRDI’s focus on applied research and development. IRDI will obtain greater financial stability and visibility, as well as significantly increased potential to offer education and training services. Georgian College will obtain access to commercial-scale infrastructure and technical staff at a satellite campus in the Midland area, a broad base of applied research expertise, and opportunities for applied training experiences for students.

Final Report (PDF - 595KB - 39 pages)
Management Response (PDF - 14KB - 4 pages)

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