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Posts Tagged ‘Innovation’

Re-posted from the Cross-Border Biotech Blog

By Jeremy Grushcow

Ontario’s 2010 budget, released last week, contains no new innovation-related initiatives, leaving the province to fall further behind competitive jurisdictions. Read on for more detail, but also see this post noting that signs point to further announcements.

Despite recent strategic initiatives in Québec and across the U.S., and despite opportunities to improve funding for biotech companies without any new expenditure, the 2010 budget chooses to rest on last year’s now questionable laurels.

The section on “Innovation” in the 2010 budget’s Sector Highlights reads, in its entirety, as follows:

“From the discovery of insulin to the BlackBerry ®, the impact of Ontario inventions has reached around the world.

Today, Ontario’s economic and social prosperity has come to depend on its ability to innovate and compete in the global marketplace. Recognizing this, the McGuinty government is investing in an aggressive innovation agenda to ensure the province is one of the winning economies in the 21st century.”

The remainder rehashes prior years’ initiatives.

There are two hints  of possible improvements directed at innovation:

  1. A bullet in the “Small and Medium-Sized Businesses” section says the government is “[p]roposing to extend the refundable Ontario Innovation Tax Credit to more small and medium-sized businesses.”  There is no further detail that I can locate on this proposal anywhere in the budget documents.
  2. The Ministry of Research and Innovation gets an increased budget, from $295 million in 2008-2009 to $343.8 million in 2009-2010 and $411.5 million in 2010-2011.  There is no information that I can locate on how these additional funds would be deployed.

No detail is provided on either item, so the underlying goals or likely effects are impossible to determine.  Although there are increases for post-secondary education and general improvements to the corporate tax environment (the net effect of which against the HST is uncertain), the overall impression is undeniably disappointing.

Jeremy Grushcow  is a Foreign Legal Consultant practising corporate law at Ogilvy Renault LLP. He has a Ph.D. in Molecular Genetics and Cell Biology. His practice focuses on life science and technology companies.

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By Stephen Rhodes

Innovation seems like a simple idea in our world economy. Invest in new ideas, processes, products and services and excel on the world stage.
Why is it as a country we have failed to understand that the real economic engine is the innovation that comes from entrepreneur in small business?

We do alright in some respects. We have a highly educated population, reasonable tax incentives for research and development and competitive corporate tax rates.

And our governments are starting to understand  the importance of innovation in the wake of a declining manufacturing sector.

Finance Minister Jim Flaherty devoted a large portion of last week’s federal budget to measures to encourage innovation.

The Conference Board of Canada recently gave  Canada’s a “D” for innovation capacity. Out of 17 countries, Canada placed a disappointing 14th.   RIC Entrepreneur-in-Residence David Pasieka wrote last week “many of Canada’s industry sector policies are designed to preserve existing industrial production rather than generate new, highly innovative ones. Rather than this short-term type of innovation strategy, Canada needs to implement long-term innovation policies that would help transform existing industries into new ones.”

When Industry Minister Tony Clement held a round table with Brampton Board of Trade members a week or so before the budget he said that manufacturing is still the lifeblood of Ontario. He also said we have to get better at how we do it.

That takes innovation.

The issue in Canada is a shortage of investors. Angels and Venture Capitalists are still reeling from the economic decline of the last 12 months. Allowing more foreign investment, as Flaherty has promised, could unleash new investment capital but it remains to be seen how Canadians respond to even more foreign investment in Canada.

What do you think?

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By David Pasieka

The Conference Board of Canada has recently come out with a report card on Canada’s innovation capacity. Out of 17 countries, Canada placed a disappointing 14th and received a “D” grade on its capacity to innovate.   For many of us in the Ontario Commercialization Network, this failing grade is not in our DNA and we need to contemplate appropriate remedial actions.

Innovation is the ability to turn knowledge into new technologically, advanced goods and services. The Conference Board of Canada measured data that outlined the stage of knowledge production, the transformation of knowledge, and market share of knowledge-based industries. Canada’s low relative ranking means that, as a proportion of its overall economic activity, we do not rely on innovation as much as other countries do.  Although Canada is well supplied with educational institutions that produce well-respected science, we do not take the steps to ensure the science can be successfully commercialized into a global competitive advantage.

Canada has been slow to adopt leading-edge technologies and this shows itself in our relatively low productivity level. As other countries develop and adopt more innovation-related business models, their companies are gaining in productivity more rapidly than Canadian companies.

There is some good news to be found in Canada’s innovation report card. Canada received a “B” grade on scientific articles. Canada’s proportion of scientific articles published continues to increase year on year. However, it takes more than just one or two above-average scores to be a leader; it takes coherence – something that Canada has failed to demonstrate.  These scientific papers need to result in technology or processes that can be successfully patented and driven over the goal line to commercialization.

So the question remains – how can Canada become a leader in innovation? Countries that rank higher in innovation capacity not only spend more on science and technology (as a proportion of GDP), but they also institute policies that drive innovation demand and supply. Almost all countries leading the innovation scores have government programs that encourage innovation in the national interest. Innovation policies promote “creative destruction” of the old and hasten the transition to the new. However, many of Canada’s industry sector policies are designed to preserve existing industrial production rather than generate new, highly innovative ones. Rather than this short-term type of innovation strategy, Canada needs to implement long-term innovation policies that would help transform existing industries into new ones.

Although Canada has some strong innovation initiatives, such as federal subsidies for biotechnology research and the national Scientific Research and Experimental Development (SRED) tax incentive programs, we need to go the extra step of fostering demand for innovative products. On a small scale, Canada has demonstrated it is capable of developing innovation strategies to successfully align business, government, investors, and customers. Despite this small step in the right direction, there is a clear need for Canada to commit to becoming an innovative country and to dealing with the economic and policy challenges that it requires.

The RIC Centre is focused on doing our part in helping early stage technology companies accelerate their path to commercialization.  We need to continue and expand our Coaching, Networking and Investor-readiness programs to ensuring we are doing all we can to help improve the scores and bring home a stronger report card the next time about.

David Pasieka is the Entrepreneur-in-Residence at the RIC Centre. Learn more here.  Visit Our Contributors page for more information about David. Read his blog at www.cedarvue.blogspot.com

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Editor’s noteThis week we will be posting a series of book reviews prepared by Pam Banks. These reviews are also available to watch on Roger’s TV In Business Program. See link below.

Exploiting Chaos by Jeremy Gutsche

By Pam Banks

Exploiting Chaos focuses on 150 ways to spark innovation during times of change. This book explores how remarkable companies have risen from chaos and provides a toolkit to foster a culture of innovation.

The greatest changes in history occurred during the Renaissance period from the 14th to 17th century.  This remarkable period emerged after the eruption of the Black Death – the deadliest pandemic in history.  Nearly half of the European population died, causing a state of chaos.  This chaos caused social structures to collapse, forcing a period of remarkable adaption.

To thrive companies must learn not to create structure and stability, but rather to adapt quickly.

Fixed expectations are the enemies of adaptation, and the following experiment with monkeys illustrates why. Monkeys were placed in a cage with a ladder that led to a bunch of bananas.  The catch was that the ladder was connected to a powerful water hose.  When the first monkey raced up the ladder for the bananas the entire cage was drenched with water.  Another curious monkey made the greedy grasp for the bananas and triggered the shower.  At this point the monkeys connected the bananas with water.  Each time one of the original monkeys was swapped out of the cage the newcomer would immediately race for the fruit – but the group would beat him down before he could make it to the ladder.  Later the fire hose was removed, but it didn’t matter they had their lesson hardwired.

Non- traditional thinkers offer the maverick ideas and the personality required to adapt – so hire freaks. Don’t be afraid to irritate people – chaos requires organization to make bold changes and people tend to become complacent.

Cross pollinate your ideas.  The problems you are solving have likely been tackled in parallel industries.

Goldcorp was a little mining company that wanted to grow.  No matter where they looked for gold their properties seemed to lack potential.  The CEO published the company’s highly secretive geological data and offered more than half a million dollars in prize money to any person in the world who could identify a strategy for finding gold.  Goldcorp received 100 new strategies.  The new methodologies led Goldcorp to unearth 8 million ounces of gold catapulting the $100 million dollar company to a $20 billion dollar valuation.

It’s important to reset your expectations and open your mind to explore seemingly random innovation. There are unique ideas all around us.  The difficult part is making sense of it all.   Innovation starts with the customer, so obsess about your customer.  Who are they…what do they need?

By 2007 GM was struggling with gas guzzling SUVs like the Escalade.  They realized that they had pushed the company away from females and eco-conscious buyers.  To better understand this demographic, the designers literally put themselves in the shoes of their female customers.  Male engineers were required to dress in drag and then get into and out of raised trucks and SUVs to understand what it’s like for women wearing dresses.  This helped them design cars like the Chevy Volt.

If you want to spark inspiration you need to hunt ideas that seem cool – but what exactly is cool? Trend hunting or clustering ideas that are important to your customers can help focus your innovation.  The book does a  great job in using photos to help group ideas and identify cool concepts.

We are in a period of economic crisis where global markets have lost a decade of value.  Collapse of any kind ripples through the economy, but it also gives birth to new opportunity.  Einstein words about three rules of work still ring true:

–          Out of clutter, find simplicity

–          From discord, find harmony

–          In the middle of difficulty lies opportunity

So look at chaos as a new opportunity for relentless innovation.

Pam is Commercialization Director for RIC Centre. She is a regular book reviewer on the business program  In Business on Rogers TV. Watch Pam’s review  of Exploiting Chaos.

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By Sharon Dotan

I recently attended the Canadian Innovation Exchange (aka CIX) and heard a wonderful keynote by Bill Buxton, Principal Researcher at Microsoft Research, and a passionate advocate for innovation.

So what exactly is innovation? We usually think of innovation as an “Aha!” moment, as Oprah would say, that we might experience as an individual.

We think of Alexander Graham Bell and the telephone. We think of Thomas Edison and his many patented inventions (well over 1,000). But is this the reality of innovation? Buxton says no. Most of Edison’s patents in fact, were simply improvements made on an original idea thought up and created by someone else.

Innovation is a team sport! And to be innovative, you need to stack your team with great individuals who contribute a variety of skill sets from across the board. Think of hockey – you can’t just have all the top goalies on your team and expect to be a winning team – no matter how good all those goalies are, you’ll still have a losing team without good forwards and defencemen.

Buxton tells us to build a team with “I” shaped people. Like the letter “I”, these people have their head (the top part of the “I) in the clouds – they are dynamic, creative, and always dreaming up new ideas. Yet, they have their feet (the bottom part of the “I”) firmly grounded in the practical world – they are realistic, hands-on and proactive. And most importantly, they can span all the space between these two worlds.

Finally, with a great team in place, where do we find innovation? Buxton refers to the analogy of gold – you can’t just “make” it – it’s already in the ground. And so, the process begins with prospecting – being able to find the gold in the ground within all that other “dirt”. Once you find the gold, you have to know how to mine it, refine it, and finally goldsmith it – turn the gold into something worth more than its weight in gold.

Sharon Dotan is a student in the Master of Biotechnology program at the University of Toronto Mississauga. Through her internship at the RIC Centre, she has gained a passion for cultivating and promoting innovation. With her background in life sciences, Sharon has been able to assist RIC’’s our Entrepreneur-in-Residence with various client needs, including market research, business plans, and go-to-market strategies. Sharon is also responsible for the Growing Your Business breakfast series as well as maintenance of the RIC website.

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StephenBy Stephen Rhodes

Innovation is something new or a new way of doing something old. It can involve changes in thinking or approaches, new products or new processes and often is revolutionary in scope. It needs to move us beyond the pale, metaphorically speaking.

Innovation depends on putting invention into practice, making a silk purse out of a sow’s ear and taking it to market where value is created for a customer. An idea may lead to an invention, but it isn’t an innovation until it is commercialized. The benefit is to improve productivity, create jobs, and prosperity, improve our quality of life and along the way create wealth in a economy.

InventionAs a country our investment in innovation creates a competitive advantage. Canada has no shortage of good ideas; but we fall short with the support needed to transform inventions into innovations. We have a long  list of innovations in agriculture, mining,  forestry and fisheries. And there is acrylics, basketball, the Canadarm, the electron microscope, five-pin bowling, goalie mask, insulin, jolly jumper, kerosene, pablum, paint roller, rollerskate, snowblower, telephone and the zipper. Oh, we also invented Superman.

But with our natural resources in great demand around the world, it seems easier and more profitable to invest in resource development. While the prospect of triple-digit oil prices will clearly fuel Canada’s post-recession economy for a while, long-term sustainability will always be an issue.

A Conference Board of Canada report card in 2008 says we are well supplied with good universities, engineering schools, teaching hospitals, and technical institutes. We produce science that is well respected around the world. But, with some exceptions, Canada does not take the steps that other countries take to ensure that science is successfully commercialized and used as a source of advantage for innovative companies seeking global market share.

The Board places Canada 13th in the world in its report card. In short, it says Canada needs to move away from short-term job protection policies that consume important resources and instead support  long-term innovation.

What do you think?

Stephen Rhodes is President of The Marketing PAD, a full service strategic communications and marketing company. Read Blogpad or visit  The Marketing Pad online.

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Re-posted from the Cross-Border Biotech Blog

jeremy grushcowBy Jeremy Gruschow

A very interesting article in Nature Biotechnology from a group at the McLaughlin-Rotman Centre for Global Health provides some empirical support for a trend we’ve been following of increased innovative activity in developing countries.

According to the article, over 25% of Canadian biotechs collaborate with developing countries.  Of these, however, the vast majority of companies do so alongside collaborations with other developed country partners — only 4% collaborate exclusively with developing countries.  Also, gaining access to developing countries’ markets is the most frequent (66%) reason cited for collaboration.

Still, some of the data reflects the growing importance of developing country collaboration (China and India in particular):

  • Canadian firms’ collaborations with India (17) and China (22) nearly equal the number of collaborations with Japan (18) and Germany (23); and
  • Accessing knowledge from developing countries’ partners (24%) is approaching providing knowledge to developing countries’ partners (37%) as a reason for collaboration.

How do these collaborations look overall?

GrushcowThe figure from the paper on the left shows the geography of, and rationale for, the collaborations. Part “a” shows marketing and distribution collaborations, and part “b” shows those involving an R&D component.

What is the effect of all this activity?

Well, it’s hard to quantify, but the authors review revenue data from public company respondents and find that:

“average total revenues of firms that have North–South collaborations are nearly four times higher than firms that do not have such partnerships.”

My bottom line: causal or not, that’s a correlation that should cause all biotech companies to take note.

Jeremy Grushcow  is a Foreign Legal Consultant practising corporate law at Ogilvy Renault LLP. He has a Ph.D. in Molecular Genetics and Cell Biology. His practice focuses on life science and technology companies.

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