Canada’s Innovation Budget / Superclusters

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Canadian Prime Minister Justin Trudeau announced the 2017 budget included an Innovation and Skills Plan.   This is a bold and visionary plan for the development of the country.   It is driven by concerns for the stability of the USA as a long-term trading partner and focuses on building the necessary assets required to be a leading country in tomorrow’s global innovation economy.   The future state plan is multi-faceted targeting major investments in the development of their ecosystem around six superclusters and emerging industries.   It also incorporates the building of new education offerings around lifelong learning for both the current workforce and next generation of students and workers.  While many regions around the world are working on their regional cluster strategies,  this marks a leading trend of county-wide strategies targeting the development and integration of cross-region assets into superclusters.
Here is a quick summary of the budget announcement.
Proposed industry efforts include:
  • $950 million CAD ($709.8 million USD) over five years to develop superclusters in six key national industries:
  1. advanced manufacturing
  2. agri-food
  3. cleantech
  4. digital industries
  5. health/bio-sciences
  6. clean resource
    (+ 7. emerging AI cluster)
  • $50 million CAD ($37.4 million USD) to launch Innovative Solutions Canada.  This is a government procurement program modeled after the United States’ Small Business Innovation Research (SBIR) program.
  • $400 million CAD ($298.9 million USD) over three years to help drive investment in growth-stage companies. Through the Venture Capital Catalyst Initiative (VCCI), the Business Development Bank of Canada would make late stage venture capital deals with the intent of stimulating co-investment from the private sector.  The government hopes to unlock nearly $1.5 billion CAD ($1.1 billion USD) in private sector investments through these efforts.
Proposed education and research efforts include:
  • $3.1 billion CAD ($2.3 billion USD) for research and research training – e.g., scholarships, fellowships, research grants, and support for the overhead costs associated with federally funded research conducted in post-secondary institutions.
  • $741 million CAD ($553.3 billion USD) for investments to accelerate infrastructure projects at universities and colleges and affiliated institutions through the Post-Secondary Institutions Strategic Investment Fund.
  • $340 million CAD ($253.9 million USD) in planned support for equipment and facilities for post-secondary institutions, research hospitals, and other not-for-profit institutions.
  • $158 million CAD ($118 million USD) for several of the country’s public-private partnerships such as Mitacs, Genome Canada, the Canadian Institute for Advanced Research, the Stem Cell Network, the Institute for Quantum Computing, Brain Canada and the Perimeter Institute for Theoretical Physics.
Proposed Workforce efforts include:
  • $454.4 million CAD ($339.3 million USD) over four years, starting in 2018–19, and $46.3 million CAD ($34.6 million USD) per year thereafter, to help Canada’s middle-class workers find and keep good jobs.
  • $225 million CAD ($168 million USD) over four years, starting in 2018–19, and $75 million CAD ($65 million USD) per year thereafter, to establish a new organization to support skills development and measurement in Canada.
  • $221 million CAD ($165 million USD) over five years to fund up to 10,000 work-integrated learning placements for post-secondary students and graduates each year.
  • $186 million CAD ($138.9 million USD) would be provided to support other, unspecified research and development and related scientific activities in the higher education sector.
  • $7.8 million over two years to implement a new visa program that would allow certain skilled workers to obtain a work permit.
  • $50 million CAD ($37.4 million USD) for a new initiative – Coding Kids. The new two-year initiative would help teach Canadian children how to code to help prepare them for future IT-related careers.

 

See images of the announcement in the international gallery

Stay tuned to follow the progress of this initiative and more to come on cluster development and supercluster integration.

 

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Summary: International Conversations In Innovation

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The past year involved a great number of international conversations they were exploring investment and practices in innovation centers in the United States with the goal to integrate them to centers back in the country of investment origin.  Much of the drivers were to build a sustainable bridge of industry collaboration around innovation between the two countries and to integrate education offerings to develop new workforce skill sets.
Here is a quick list of international discussions covered in prior blogs:
Photo Galleries:
Explore the blog further to see national discussions across US cities and Government

Building a Global Workforce

workforce-word-cloudIn working with cities across the globe on economic development, a consistent challenge our team it is consulting on is the continued development of the workforce.   Many cities are already measuring the shortage of skilled talent in their region and can forecast the gap their industries will face.  For young students all around the globe, the current university track is not as clear as it once was in terms of the cost, relevance and value.   This creates quite a dilemma for students and their parents to navigate.  The impact will be significantly felt by industry all over the world who will struggle to successfully operation and compete.   This crisis will involve building new/alternative models that will need to be led by today’s and tomorrow’s industries.

To break down the complexity of this topic let’s highlight a few of the top challenges in this space:

Workforce Gap vs. Next Generation Workforce

Today the metrics already show a growing gap in the skilled workforce needed to support today’s economies.   The existing systems are clearly strained, sluggish and possibly incapable to meet the demand.   This challenge is also compounded by the fact that many of the new job roles and skills (capabilities) in the coming decades are undefined or unknown.  As new industries emerging around natural resources, new energy, healthcare, space, genetics, etc. will require the development of new disciplines, experience, and the ability to create best practices, training, certification. The time gap required to develop these new programs will outpace the demand of these new industries.

Future of Education vs. Today’s Systems

Today’s primary education systems, and especially the university models, are under massive strain financially. Critically important is that they are struggling to deliver on their mission to develop employable graduates with the depth of knowledge and application of that knowledge relevant to today’s industries.  The future workforce also needs to be educated in creative and problem-solving abilities required to be adaptive to meet their career challenges. Many corporations must augment the university education with extensive additional education and expense to onboard new talent.  It is doubtful that the requirements of the industries of the future can be integrated into the strained education systems of today and get a different result.  The path forward will require new alternatives to be created that integrate academic and industry training backed by new funding and organizational models. Today’s model of universities (that have grown to be massive institutions that are not financially viable and ruled by a tenure system) will have to be challenged with a more global consortium model of combined academic fundamentals with industry application.  This also implies that these new global consortiums can provide a global education inclusive of industries and markets and new models of exchange.  Much of the curriculum will need to come from the cutting edge industries that are creating these new frontiers.  Industry will have to fund much of the workforce development, but not through a granting model with no accountability but more aligned with direct global industry internships models where students work and learn throughout their entire education and earn their education and graduate to direct employment.

Degree vs. Life Long Learning

While tomorrow’s workforce can be built with new programs, the current workforce must remain relevant.  New industry talent development models need to create a culture of life-long learning.   Societally we need to shift from thinking about getting a degree at the beginning of your career to having programs that keep you learning throughout your entire career.   As the speed of technology, innovation, and business keep accelerating, the workforce has to be constantly educated.  Thus from the first day of school to the last day of work you are always both working and learning.  This becomes the new norm of what a career is and it is directly integrated into education and employment.  A job is no longer just a job but continued growth opportunity and it is built right into the job roles of the future.

Global Collaboration vs. Going It Alone

Many new industries will arise in different countries around the world, but many of the solutions developed for the global challenges will need to be shared by everyone.   We must build a workforce for the world to be successful as a whole.  Whether you work in the country that is inventing, producing or implementing the solution, the skills will be required to be in all three locations.  Workforce and talent development programs will need to be integrated around the globe in order for new industries to flourish and meet the urgency of some of the shared grand challenges.

Ecosystem vs. Ego-system

North American companies have grown up in a culture of individual corporations making it big and competing against their rivals.  Globally, the notion of collaboration and co-opition are more embraced as many companies pull together to combine resources and compete in markets.   As global companies grow to or exceed the size of today’s leaders, we will see a larger shift to these global co-opition models.  This makes developing your capabilities around researching and engaging your business ecosystem a critical success factor in building tomorrow’s competitive advantage.  It will also be a key underpinning of workforce management and talent acquisition.  In many cases, top talent and capabilities will begin to be shared effectively across organizations.  Those companies that can’t share talent may find themselves isolated, struggling to retain talent, and ultimately be playing competitively against teams of much larger resources and skills.

Independent vs. Employee

There are many increasing trends where individuals are taking the path of being an independent contractor vs. a traditional employee.   Corporations also like the flexibility of leveraging consultants as needed vs. committing to full-time employees with benefits.  It also allows corporations to immediately bring on skills in areas they have not prepared for or an industry disruption where a demand has been created.   Given the speed of business and innovation, this flexibility in talent acquisition can also create an advantage or benefit to the agility needed to compete.   The rise of many online platforms where independents can be found and job needs are posted continues to create a global economy of resources and networks of resources, that can quickly be engaged.  Companies that become the best at leveraging networks of independents and can bring them in and out of their cultures the most successfully will have the advantage in agility and building expert teams on demand.

Manual vs. Automation

The 4th industrial revolution is frequently tied to the increased role of automation and robotics use as a workforce replacement.   While many benefits are gained for industry in the use of automation the concern is that of the human workforce that is displaced.   There are many new industries that will emerge around this shift including the design and development of the robotics and manufacturing systems.   The implementation and maintenance of those systems in operation.  The management and analysis of those systems over their life cycle.   Each of these areas will require the development of a skilled workforce to support the shift.   The challenge arises around the retraining of the existing human workforce either into these new fields or into other job roles.   This effort falls within the lifelong learning topic mentioned above  but has brings an added element of possibly retooling of skillsets.

Current vs. Future Industry

Considering the examples highlighted above, I will pivot the conversation to an opportunity.  These challenges already exist and solutions are already being tried around the world from which we can learn. India, for example, is at the forefront of both environmental grand challenges and industry workforce challenges.  Let’s take a quick look at their situation.

One of the great challenges of India’s economy is in the population growth.  With over 650M under the age of 25 and being on track to hit 1.5B in less than 10 years, India has to create over 50M new jobs for the next 50 years!  On top of that, 70% of those new jobs are not defined yet and will be defined by emerging fields like:

  • 3D printing
  • Nano Technology
  • Artificial Intelligence
  • Virtual Reality
  • Space ( $70M for India to go to Mars/$200M for the USA )
  • Transportation
  • Driverless Cars
  • Genetics
  • Communication
  • Robots / Drones

These fields are new and will spawn many adjacent industries to support the primary innovations.  They are also high complexity fields that will require an amazing depth of education and lifelong learning as the industries mature. India already knows it can’t solve these challenges alone, but many of the first experiments and programs will be tried here and this makes it a critical market to study as other countries evaluate their options and to see how people are already collaborating.

To gain a deeper insight into the many fronts where India is facing leading challenges, please see my blog that dives more deeply into their situation:   Future of India

The workforce challenges are real and the solutions will take new cultures of collaboration, new models, and cultural shifts to solve them.  I plan on breaking these challenges down further to explore options that are being pursued in different regions and what models are emerging that will disrupt many of today’s systems.

 

 

1st Investor Conversation with Reps from E. Europe / Middle East / Africa

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Our Economic Development Team connected with another group representing investment groups spanning Saudi Arabia, Turkey, and Eygpt.
Currently, the conversation is in the exploration stage but interest seems high around innovation services.  Particularly the ability to build out start-up incubation services in key areas of technology critical for these regions.   These services would be used to support US based start-ups and the exchange of international based startups to incubate in the USA all with goals of having commercial potential to solve challenges in their regions.    Most of these technologies around water, energy, agriculture, etc would have applicability around the world so are high priority efforts for many investment groups.
What has been interesting over these past few months of hosting international delegations is not only the similarity of interests in innovation, education, and exchange,  but the vast diversity of how they view investments in different cities in the USA.   Some of the factors that seem to create the variance is determined by:
  1. Where they see the strength, growth/decline,  or emergence of industry clusters in the USA.   Cities with old brands are not attractive and cities with significant international brand and clear economic development plans for the region attract attention.  Note:  This is not always the biggest US cities that have the best plan forward and those plans are not always lead by government agencies but more private economic development companies working collaboratively across the region.
  2. Demographics of the overall region.  How international is the area?
  3. Education opportunities,  what international programs exist or willingness to develop.
  4. Current USA industries working in their region
  5. Current regional government engagement with the international region.   This is more state level vs. federal.  How proactive is has the state been to do outreach and build relationships.
  6. The vibrancy of the startup economy:  The amount of investment corporations or Venture Capitalists had made in their local region.
  7. The personal networks of the investors in partnership with other USA investors.
  8. Willingness to partner in foreign the capital stack between domestic and international money.en
  9. Vetting and background checks of all parties.
  10. Personal networks / history of past business success.
Our next step is to partner with the US Commercial Services to vet these opportunities / sources at this time.

2nd Investor Delegation from SE Asia

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Our Economic Development Team hosted the second delegation from SE Asia this month.   This group was based out of Seoul Korea and represented interests in S. Korea, Philippines, and Malaysia.    The core focus of this conversation focused on international exchange programs around both education and business services.
Business areas included:
  • Professional high-density courses for business professional looking for advanced degrees in various business disciplines.
  • Professional briefing in both industry overviews and global market trends.
  • Professional networking services between nations based on industry focus areas.
  • Professional Industry Immersion experiences.
  • Professional and Student based training in English (  note:  With world legislation around Patents and IP center on English is becoming a critical education path for many countries to support overall workforce development.
  • Student Industry Internships.
  • Student based training in business and vocational professions.
  • Professional and Student based orientation & long term stay services ( prior to many of the services list above )
Many of these services are being implemented in countries across SE Asia as both predatory for their business professionals and students.   The goal is to embed these services in all countries to facility easy exchange and support business activities.  Individual firms in the region have contracted over 14,000 instructors from countries all over the world.
Online services are also a key component of the discussion.    Many of these programs in SE Asia have already built extensive online solutions to support both global-scale through partnerships with large technology and communication vendors.   A key learning was that no vendor provided a comprehensive solution  especially in supporting the diversity of infrastructure found between the most advanced cities and the most remote rural locations.   In most cases best of breed solutions needed to be developed and constantly evolved.
There was really strong momentum around partnership opportunities with the US academic institutions and 3rd party businesses we are working with.    Future meetings are currently being planned to discuss implementation of these services across countries.

1st Investor Delegation from SE Asia

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Our Economic Development Team hosted a foreign delegation from Vietnam that represented a large investment hedge fund based in Singapore. This particular group was travelling to the United States representing a broad spectrum of business partnerships and evaluating investment opportunities.   Three major areas of focus included:
  1. Discussions around building new international services around Innovation, Education, and Exchange.   In particular, this group was interested in international exchange services that would facility business networking,  professional & student education, and potential for two-way access to start-ups and technology.
  2. Members of this effort also represented very large scale real estate develops in emerging countries that included both high rise living and resort properties.   They were looking for strategic partnerships to US suppliers and manufacturers in the construction of these large properties due to poor materials sourcing from China.
  3. This group is also supporting a new North American-based global financial platform and was talking with our business partners about integrating this platform under many of the large real estate / campus projects.   This platform supports a broad array of credit card and analytics features on an international scale differentiated from most of the largest platforms today.   It includes aspects of currency exchange and ability to transfer funds under a process model of governance of approvals for control and audibility.   As technology increases the ability to transfer and establish governance models at various levels of society it raises a larger global issue around the movement of capital across national boundaries.   The platforms will ultimately bring new regulation around global cooperation and security but could be certainly disruptive in the mean time.
Upon the delegation returning to Asia we have continued ongoing discussions around these opportunities.

1st Investor Conversation with Norway

B8BB1187-965D-4542-8DB6-5C84217803B5.jpgOur Economic Development Team met with investor reps from Norway.   We explored interest levels around investment in innovation, education, and exchange centers to facilitate stronger international business.  Norway has a very strong culture of innovation and education.   They were very open to looking at international partnerships.   Aspects of the discuss centered on the challenges they face in commercializing and large scale manufacturing of new innovations due to regional costs and the benefit of international partnerships to achieve those goals.   They also talked about investment criteria and key regions in the USA that they are targeting investments.   Their portfolio of interest is also a blend of short term and long term investment objectives which also dictate criteria for selection.