Submission—The Information Technology Telecommunications Industry

August 23, 2002 In Montreal

Context

On August 23, 2002, the Quebec Region of Industry Canada organized a sectoral consultation table on Canada's Innovation Strategy. Sixteen (16) organizations from the information and communications technology industry (ICT) in Quebec participated in this consultation session to share their points of view and priorities in the area of innovation and to try to consolidate Quebec's priorities in terms of innovation for the ICT industry. A list of participants is appended.

Main principles

Canada must favour a systemic approach to innovation in terms of its policies, programs and agencies, and must ensure their effective implementation. Special weight must be given to structuring and coherent actions that call upon all participants, governments, industries, universities and fourth pillar organizations by encouraging them to work together more effectively. "If we only knew what we know now…" we could make a better assessment of the results and impact of our investments and we could avoid duplication, piecemeal work and discontinuity. We must rally the protagonists and call on their services. We must promote a true entrepreneurial culture and excellence in everything we do, including our tax and regulations environment to truly facilitate the appropriation of the culture of innovation by companies. We must also promote a more effective allocation of information infrastructures, networks and technology to all. An approach that includes cooperation, simplicity and speed is the key to success. Let's simplify what already exists and be aware of how we can use fourth pillar organizations for their speed of intervention and their leveraging effect. In short, the Government must innovate in its way of doing things. The Innovation Strategy should encourage the emergence of pioneering products. Quebec's distinctiveness must be recognized in comparison to other Canadian regions. Innovation must be considered in a broader sense, i.e. economic and social innovation at the same time. Innovation programs must be clearly adapted to improving productivity, which is the ultimate goal. Emphasis must be placed on the transfer of technology. A culture of continuous education must be implemented among all companies. Tracking implementation of the Innovation Strategy after the national summit in November 2002 will be necessary.

Our Starting Point

There has been relatively little industrial research in Canada and we have not developed a tradition of marketing technologies, given that our economy was founded on the exploitation of natural resources and management of factories owned by outsiders. Multinational corporations such as IBM and Ericsson that have research centres in Canada need our support to remain competitive with their peers in a number of other countries and to obtain global mandates. In fact, it should be recognized that strategic decisions regarding ICT in Quebec are increasingly being made abroad.

In comparison to R&D support programs, there is not enough support for business development and marketing. The result is that Canadians sell their innovations at a discount to Americans and other foreign interests. We need to find the means of attracting more foreign venture capital for emerging Canadian sectors while preventing pioneering companies from being sold to foreign interests too soon (ex. Softimage). Companies like Matrox and Positron should be involved in the planning and design of a Canadian innovation strategy.

There is much federal investment in leading edge research, for example in the universities, but not enough is invested in the integration, marketing and appropriation of technology for the future. The swift appropriation of new technologies is crucial since more than 95% of technologies come from outside Canada. Introducing innovations into traditional industries is a serious challenge.

Valorisation Recherche Québec [Translation: Quebec Research Valorization] has concentrated its investments in research and development, but has allocated very little to the transfer of technology and even less to the appropriation of new technology.

The enabling effect of the information technology sector as a horizontal sector that supports other sectors and will increase their productivity deserves better recognition. For instance, we still cannot make optimal use of videoconferencing all over Quebec and Canada, with the consequence that much travel is still necessary (even to consult us on Canada's Innovation Strategy).

The social economy represents 25% of the Canadian economy. There is very little funding for the development of communities, employability and the appropriation of technology.

In terms of skills, we noted a 70% dropout rate in computer studies. If 600 biopharmaceutical post-doctoral students in Quebec are not familiar with their companies in their sector, could the same thing be true for the ICT sector?

The culture of continuous education has still not taken hold, even in the big companies.

Recommendations

Knowledge

From the very first decision made regarding innovation funding, the purpose must be set out (appropriation or marketing) and a method of management must be agreed on that will ensure the best possible use. It was suggested that a portion of research project budgets be allocated to the transfer of knowledge. Moreover, the Innovation Strategy must rely on tools that encourage the international consumption of our technologies, products and services.

The numerous subsidizing agencies, both federal and provincial, must consult one another to better support the liaison and transfer of innovation centres that already exist, as well as the networks, groups, technology accelerators (as opposed to incubators) and high-benefit projects. Furthermore, the creation of groups of agencies dedicated to the promotion and advancement of high technology that aim to facilitate the process for technological entrepreneurs, must be encouraged (ex. La Maison des hautes technologies). Public authorities must innovate by trusting people in the industry and helping them to improve their management skills. Rather than helping SMEs individually, we must give special weight to inter-sectoral interventions (ex. between the IT sector and the learning, health, manufacturing industry and construction sectors).

Social innovation (ex. the CLSC [Quebec local community service centre] of the future, distance education, smart communities, electronic commerce, the government online) must go hand in hand with technological innovation. A culture of innovation is essential to guarantee the successful appropriation of technology.

Incentives that accelerate the appropriation of technology yield interesting results (ex. tax credits for Quebec SMEs to set up a website, and to Quebec parents for Internet hook-up).

Incentives that accelerate the acquisition of Canadian innovations (ex. "Les premières mondiales" and large high-benefit projects) by public markets and large originators in Canada would be an excellent way of helping to market innovations from Canadian SMEs. Without targeted support, RISQ [Translation: Quebec Inter-computer Scientific Network] cannot comply with Hyperchip's request to purchase its equipment (cost: $500,000) for the demonstration.

Access to tax credits and grants must be simplified and accelerated by simple and transparent decision-making processes.

The subsidizing agencies should call on competent experts to evaluate the projects in emerging disciplines. They should also modify their rules to recognize research-action that is being conducted outside the universities. In short, the mandate of subsidizing agencies must be questioned.

We must continue to invest in artistic research for the development of Canadian cultural products.

Skills

Human resources sectoral councils must do more to promote the recognition of acquired knowledge, be more sensitive to regional realities and adapt regulations and employment programs to the skill requirements of SMEs and the employability of workers.

Governments must help SMEs to establish a continuous training and development program based on their respective needs. SMEs must be able to count on external support for the justification, recruitment and integration of new skills.

Links between universities and industry are essential. Nevertheless, universities must continue to provide a broad education that is not solely focused on immediate needs. Fourth pillar organizations are all flagged to help link skills between universities and industry by promoting careers, organizing internships and appreciation training and by reducing the periods of adaptation in business. The program "Prompt Québec" for the telecommunications sector is an excellent example of what can be accomplished.

We do not need to focus solely on retaining graduates and researchers. We must also do better at attracting skilled immigrants.

Employees taking early retirement in the next few years should be perceived as presenting excellent opportunities for encouraging shorter terms in office and distance mentoring, in short, taking advantage of the abilities and skills of retirees.

Innovative Environment

We do not agree with the establishment of the objective in the third topic of the Innovation Strategy. Canada must strive to have the best tax and regulations environment in the world. Just as there are anti-deficit laws, we should also think about laws for making the tax system more competitive.

We suggest implementing a simple process with automatic controls to accelerate that process, based on criteria that companies must meet, and above all one that makes use of the existing agencies by placing emphasis on credible people.

We propose that the Innovation Strategy delegate the supervision, or at least the management, of some programs to already existing networks or organizations.

Reinforcing Communities

All communities must have access to broadband. We must ensure that federal broadband funding complements funding for the program Villages branchés du Québec [translation: Connecting Quebec's Villages]. We must provide for monitoring and evaluation mechanisms to ensure effective use and optimal appropriation.

We recommend that the Innovation Strategy pump funds into accentuating the virtualization of networks and thus allow these networks to contribute to the expansion of regional innovation systems by providing national access to expertise, technology and best practices.

When creating industrial clusters, protagonists and acquired knowledge must be taken into account. Therefore, we must invest where there is a guaranteed return on that investment--in other words, we must build on what already exists.

The government should aim to achieve consensus on the creation of industrial clusters.

ICT should not constitute an exclusive industrial cluster in one province, since this sector is unique due to its transversal nature, and is applied to all activity sectors. In fact, we need to place a premium on Pan-Canadian clusters in the technology sector.

Revised October 25, 2002

A list of participants

M. Jacques Ouellet
Vice-président Technologie de l'information
Inno-centre Québec

Mme Nicole Martel
Présidente-directrice générale
Réseau inter LogiQ

Mme Sylvie Gagnon
Directrice générale
TechnoCompétences

Monsieur Denis Potvin
Vice-président Technologie
Institut International des Télécommunications (IIT)

Monsieur Pierre Langelier
Président-directeur général
Institut du commerce électronique

M. Jocelyn Maltais
Directeur général
Réseau Photonique de Montréal

M. Yves Sanssouci
Président-directeur général
CRIM

M. Claude Demers
Président
ADRIQ

Mme Louise Sauvé
Présidente
SAVIE

Mme Monique Charbonneau
Présidente-directrice générale
CEFRIO

M. Pierre Bouchard
Président-directeur général
RISQ

M. Bruno Duchesne
Président-directeur général
CDG

M. Charles Bourgeois
Vice-président exécutif
Montréal TechnoVision

M. Pierre Galarneau
Vice-président technologie
INO

M. Jacques McNeill
Membre du CA
PROMPT

M. Hugues Monfroy
Adjoint à la direction
Société des arts technologiques (SAT)