If the Liberal government’s plan to fund innovation “superclusters” with $950 million raised questions when it was introduced with this year’s federal budget, then some answers are being made clear today.
Minister of Innovation, Science, and Economic Development (ISED) Navdeep Bains defined the term and shared how the government plans to award those funds. A supercluster is a dense area of business activity, according to ISED, attracting large and small companies alike that collaborate with post-secondary schools and non-profit organizations to turn ideas into solutions that can be brought to market.
Applications for the program must come from either a Canadian-based company or an international company with operations in Canada. That business will be the lead of a consortium that includes other companies of various sizes and post-secondary schools and non-profits. A two-phase process will see letters of intent submitted by July 21. After that, the government will invite a shortlist to prepare full applications. Five will be selected for funding.
Bains spoke about superclusters at the Ottawa-based BlackBerry QNX offices, saying that the company would help Canada become a world leader in autonomous vehicles.
“Our investment in superclusters represents seed funding to create made-in-Canada Silicon Valleys in areas where Canada has world leading strengths,” he says. “The companies and business opportunities created from these partnerships will equip Canadians with the skills they need for the middle-class jobs of the future.”
— ISED (@ISED_CA) May 24, 2017
Private sector partners will be expected to lead the activities of each supercluster, Bains said. The government is looking for “bold proposals with ambitious visions and missions.”
Funding decisions will consider the application’s ultimate benefit to the cluster and to Canada, including how the proposal will generate real economic impact, commercial results and position Canada for global leadership. The government wants transformational change that will bring new products and processes to the market and create high-quality, resilient jobs. An intellectual property strategy must also be created to maintain ownership of the ideas and solutions output.
Any proposal will have to demonstrate that’s it has an equal level of funding commitment from private sectors sources to what it’s asking from the government. ISED says that can come in the form of cash or in-kind contributions from businesses. Bains says he expects to announce the funding winners by the end of the fiscal year.
Don’t be surprised to see a consortium organized around the AI industry, says Paul Teshima, CEO of Nudge.ai. Though he has no plans to get involved with a proposal himself for his AI-fuelled sales software. He sees two directions that the AI industry is going in right now, one that’s trying to push the boundaries for machine learning and another that sees AI completing redundant but necessary tasks.
“That actually has an extremely strong viability,” he says of the latter direction. “It’s not taking jobs, it’s helping people do more of the work they’re supposed to do.”
Teshima expects the government will target different areas of Canada to distribute the five superclusters across the country. But he hopes the individual consortiums are based around tightly-knit geographic regions.
“One of the biggest issues we’ve had in Canada is tech density,” he says. “When you have people out of the downtown core areas of Toronto, you don’t get a situation where people are able to interact with each other.”
In that scenario, it’d be unlikely for a supercluster organized around the same industry but split across different major cities to win funding. For example, an AI-focused consortium working with McGill University but led by a Toronto-based firm wouldn’t work.
Teshima says that one positive advantage of the close proximity networking effect is that entrepreneurs might feel more willing to take a risk on a startup if they feel that another, larger firm will be more likely to hire them even if their company ends up failing.
Healthcare technology also deserves some serious investment, says Heather Shantora, CEO of Hamilton, Ont.-based InnoCare. The firm provides software and services that independent clinicians need to run their business so they can focus on patient care.
“I think of all the sectors, the healthcare industry has the biggest lag in technology adoption,” she says. “It’s one of the few sectors that does not see technology that’s interoperable and deployed throughout the system.”
Consider that healthcare spending is already the biggest single line item in every province’s budget and Canada’s aging population, and you can see why the healthcare sector is in need of some innovation, she says. InnoCare is interested in getting involved in a proposal for the superclusters initiative, but Shantora worries there’s not enough time and that the process could become too bogged down by red tape.
“It’s a tight timeline, it’s mid-July that one has to apply by, so if we’re able to reach out to university professors and they’ll need approvals to see if they can be associated with our our brand,” she says. “Can all that be turned around in eight weeks?”
Working with non-profit groups and academia can slow down a process because of the approvals often required, she adds. That could hinder the ability of private companies involved to move quickly and change direction when needed.
“I’m concerned if we’re mixing the business culture with the more bureaucratic, that will be too slow to innovate properly,” she says.