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Bogdan Ciobanu
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Bogdan Ciobanu
2013-06-06 15:32
Good afternoon and thank you for the opportunity to share with you information about the digital technology adoption pilot program.
My name is Bogdan Ciobanu. I am the Vice President of the National Research Council of Canada Industrial Research Assistance Program, more commonly known as IRAP. With me today are my colleagues Jason Charron and Drew De Kergommeaux.
For those of you who are not familiar with our organization, IRAP provides direct services to innovative businesses in all industry sectors and communities across Canada. We work with small and medium-sized businesses to help them develop, adopt, and adapt technologies and incorporate them into competitive products and services to be commercialized in the global marketplace.
Through an extensive network of field staff, IRAP is providing SMEs with a comprehensive suite of innovation-related services and funding. The thousands of clients IRAP serves every year interact directly with our field staff of over 200 industrial technology advisers.
Through IRAP, clients can also access the innovation expertise and infrastructure available in Canadian universities and colleges, research labs, business accelerators, and other organizations active in the innovation system. In addition, clients can receive funding to help them undertake R and D projects with a clear commercial outcome.
IRAP's business model has been considered a successful one by different studies and reports. The most recent evaluation, covering the period from 2007 to 2012, found that IRAP's clients spend more in R and D and grow faster than non-IRAP clients. For every IRAP dollar invested, the clients generated on average $10 in revenue.
Let me now refer more specifically to IRAP's role to support the adoption by SMEs of digital technologies. The digital technology adoption pilot program, DTAPP, was launched in November 2011, with the mandate to increase the productivity and competitiveness of SMEs through the accelerated adoption of digital technologies. In line with IRAP's business model, DTAPP clients receive not only funding, but also advisory services to help them clarify needs, identify solutions, and select the most appropriate technologies and implement them successfully in their businesses.
A few weeks ago an evaluation of DTAPP's first year of activity was finalized. I am very pleased to inform you that the implementation of the program and its capacity to meet objectives were positively reported, and the program is demonstrating a significant and positive impact on firms.
Client firms report that with DTAPP's support they have been able to lower production costs, increase productivity, improve and fully integrate management systems, and improve the quality of products and services. More specifically, 90% of firms report having achieved success with their DTAPP projects, with 71 % meeting or exceeding their expectations. Fully 92% indicate that the project had a positive impact on productivity, and 89% of firms have increased their technical capabilities through their DTAPP engagement.
Since the beginning of the program, 731 firms have been participating in DTAPP, 511 of which have received funding. As of today, 118 SMEs have completed the digital adoption project and because of DTAPP, 87% of those firms are more likely to undertake another digital technology adoption project.
We are finding that firms need to adopt digital technologies in order to maintain or increase competitiveness in existing markets, to enter new markets, and because of customer pressure, to improve product quality or price. The biggest challenges they face are the availability of expertise, inadequate business processes, lack of leadership, resistance to change, and the high costs associated with digital technology integration.
In conclusion, DTAPP works with clients and the best experts in the field to identify solutions that are best suited to their productivity issues. If the best solutions include the adoption of a digital technology, the program will help them to select the most appropriate technology and integrate it into their activities.
This concludes my remarks. Thank you very much for your attention. I am happy to take any questions you may have.
Bogdan Ciobanu
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Bogdan Ciobanu
2013-06-06 15:55
We are one of the four operational divisions of the NRC. There are three R and D divisions in IRAP—life sciences, emerging technologies, and engineering.
The interaction is at different levels. First of all, IRAP has 210 field staff, people who have a very strong understanding of the industrial sectors and the businesses, who provide input to the R and D programs when the programs and projects are being designed, so that they are as close as possible to the needs of the industry. There's a very strong interaction at the early stages of the development of the NRC programs.
There is a strong interaction with our clients who need very specific and deep scientific or engineering knowledge. We bring NRC scientists into our client's shop. They can spend half a day, a day—short interactions. These interactions can develop into longer-term relationships. Actually, we do this type of linkage between small businesses in Canada and the players in the innovation system on a very wide basis. We have in excess of 120 contribution agreements with universities, colleges, and research labs across Canada—provincial, federal, and others—as well as incubators, accelerators, all kinds of sources of expertise in management, marketing, and science. They bring those resources to our clients. This is one of the major contributions that IRAP brings to this innovation network.
View Kennedy Stewart Profile
NDP (BC)
The reason I asked about the interaction is that you didn't mention it in your presentation. You mentioned universities, research labs, and colleges. I was wondering if that's because of the changes that are happening in the NRC. It's moving away from scientists and researchers and that kind of personnel and moving more towards business personnel. I was wondering if that was affecting your ability, whether now you're looking at outside sources, or are you still able to draw from NRC internal resources?
View Kennedy Stewart Profile
NDP (BC)
Has the NRC reorganization, which has been fairly massive, affected your program, or has yours been mostly left on its own, besides the influx of money that you mentioned?
Bogdan Ciobanu
View Bogdan Ciobanu Profile
Bogdan Ciobanu
2013-06-06 15:58
We maintain the same structure that has been considered appropriate and successful to combine financial support with very strong advisory services. The business model of IRAP was kept intact.
Rather than being one among 21 institutes, we're now one division among four operational divisions of the NRC. The market intelligence, the understanding of the business that our field staff can bring to the NRC, is of major importance right now. It's very much valued.
View Geoff Regan Profile
Lib. (NS)
To your knowledge, do SMEs use services like the NRC Publications Archive, or the NRC National Science Library to learn about ICT, to learn about cloud computing, and other topics? What can government do to encourage this to a greater extent?
Bogdan Ciobanu
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Bogdan Ciobanu
2013-06-06 16:13
One service IRAP is providing to its clients is information on science, technology, intellectual property, market intelligence. This is a service that's provided free of charge to our clients so they can align their R and D projects better with the market needs, with the competition, with existing IP. Sometimes the end supplier of these services is NRC's knowledge management, and of course, there are other suppliers across the world that help us do it. SMEs are more and more open and interested in using information.
View Mark Warawa Profile
CPC (BC)
View Mark Warawa Profile
2013-06-06 16:28
I want to focus my questioning on business and the limited level of participation in Canada from SMEs compared to the United States, for example, and on the changing business models.
You highlighted Netflix. Who would have thought five or six years ago that your local video rental places would virtually be gone? It changed very quickly. Yet in the vast majority of Canadian businesses, we see a resistance to be involved in this changing model of business. What are those barriers?
I want to focus on the report, Mr. Ciobanu. You've said in your report that 731 firms have been participating in the DTAPP. Over 500 of them have received funding, so that's most of the 731, about two-thirds. As of today, 118 have completed the digital adoption projects, so they've received some of their funding. Is there additional funding to come as they complete that adoption? Also, because of the DTAPP, you say that 87% of these firms are more likely to undertake another step in advancing.
My focus is on expanding their market. They have an old model that they're using, and now they have something that could be marketed throughout the world using digital technology. What are those barriers? You've highlighted the lack of experience with this technology, because it takes a risk to move on to this whole new way of doing business. Where is that experience?
You're providing some of that experience due to your programs, but where is the experience we need so that business gets buy-in? Is it through the Chamber of Commerce? Is it through the National Research Council programs? How do we get buy-in from SMEs?
View Anne Minh-Thu Quach Profile
NDP (QC)
Thank you, Mr. Chair.
I want to thank all the witnesses.
My first question is for Dr. Otto.
You said that a number of discoveries, including medical discoveries and others related to phosphates in water used by humans, resulted in regulations for protecting people and nature. In your opinion, does changing the National Research Council of Canada's mandate to focus only on applied research jeopardize habitat conservation?
Sarah Otto
View Sarah Otto Profile
Sarah Otto
2013-05-09 9:33
Thank you for your question.
No, I do not at all believe that only applied research is important.
View Anne Minh-Thu Quach Profile
NDP (QC)
With all due respect, Mr. Chair, I think that from the beginning we have been talking about the need for scientific data and to have experts here talking about the necessary scientific data for finding solutions to a number of problems with regard to habitat protection. I think the question on basic research as it pertains to the NRC is absolutely relevant today.
So, I will repeat my question for Dr. Otto.
Might changing the National Research Council of Canada's mandate to focus only on applied research jeopardize habitat conservation?
Sarah Otto
View Sarah Otto Profile
Sarah Otto
2013-05-09 9:35
I'll speak to your question about basic science.
I am a basic scientist, and I think many of the people who are active in science believe themselves to be fundamentally interested in the processes that have led to and maintain the diversity around us. But I can't study the evolution of biodiversity without caring about its current status either. I don't think there is a clear dividing line between what's basic and what's applied. For this reason, I think we need to continue to support a broad base in science, because we will never know when something is of critical applied concern that, to us, seemed originally like basic fundamental knowledge.
View Michelle Rempel Profile
CPC (AB)
Thank you, Mr. Chair, and thank you to the witnesses for being here today.
My time is brief so I'll try to be direct with my questioning, and it will be directed primarily to Dr. Otto.
First of all, on behalf of all the committee members here, I'd like to congratulate you on your MacArthur Fellowship. That's a substantive achievement for anyone in Canada and certainly for a Canadian woman in your field of research. Congratulations to you.
I would like to pick up on the line of questioning that my colleague Madam Quach started. She began by laying the foundation.
Dr. Otto, your background—I believe it's theoretical and experimental evolution—is one that's obviously very relevant to this committee's work as you are studying biodiversity and that naturally feeds into habitat conservation. Given that, since she was asking how basic research, particularly your basic research, impacts habitat conservation, I'd like to go through some of the government policy and funding for basic research specific to your portfolio, which may be helpful.
It's my understanding that currently you hold, since fiscal year 2006, approximately $1.6 million in funding from NSERC. Is that approximately correct?
Sarah Otto
View Sarah Otto Profile
Sarah Otto
2013-05-09 10:22
My personal research is under $100,000. The rest is a training program for graduate and post-doctoral students.
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