Collaborating with International Partners – an IRAP Perspective

Dr. Denys Cooper, Director

Strategic Alliances OfficeIndustrial Research Assistance ProgramNational Research Council Canada(613) 993-7620 fax (613) 952-1079 denys.cooper@nrc-cnrc.gc.ca

FPPT - 2003 May 30 Ottawa

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Purpose

• To review criteria for selecting technologies

and countries for International Technology

Collaboration

• To review access to EU projects for SMEs with Universities

• To review IP Issues under the European Union new 6th Framework Program

• To review WTO Subsidy Issues

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Studies on Assessing Key Technologies for Strategic Positioning of R&D

• EU Technology Map Study for 2000-2015• Foresight Studies 1998

• Summary of National Foresight Studies – ICSU 2002

• EU – Expressions of Interest - 2002

T-1

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Criteria for Selecting Programs / Countries

Client Benefits

SME Needs: Technologies Technology & Business Relationships Partnerships & Alliances

SME Opportunities: Programs in other countries (leveraging $) Downstream market & business opportunities Networking Intelligence gathering Risk analysis

Canada Benefits (NRC-IRAP IC, DFAIT, SBDAs Taxpayer)

Long-term needs of Canadian industry Benefits to Canada Return on investment Link to Provincial initiatives

Criteria Indicators

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Criteria for Selecting .

Regions / Countries

State of industry & technology in target country Accessibility of technology / receptor capacity Desire for partnership & intent of alliance IP laws & IP protection Cost and Risk analysis

Right Participants

Are they the right partners? Type of organisation State of technology Accessibility of technology / receptor capacity Desire for partnership & intent of alliance Cost and Risk analysis

Appropriateness of:

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Selection of Technologies for Potential SME Needs – 5+ years

• ICSU Review of Key Technologies selected from Consolidation of Foresight Studies *

• Used 50 experts from 20 countries • OECD, APEC, UNIDO, and EU

• Covered 28 Technology areas - but weak in ICT sector

• Identified Key Countries with key Science, Collaboration and Market Potential

* Study by UK’s SPRU for Int’l Council for Scientific Unions (ICSU 2002)

T-2

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Technology Fields – European Union – 6 th Framework 2002-06

12,000 Expressions of Interest filed – July 2002

• 2800 Sustainable Dev, Ecosystems• 2500 Information Technologies• 1990 Genomics & Bio for Humans• 1600 Nanotech, Materials, Production• 1000 Food Quality and Safety• 300 Aero and space

Caveat: Covers requests from universities, institutes, large and small firms

T-3

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Country Strengths

Items for Selection Criteria put into 3 pools.

• Country Technology Environment

• Country Market Environment

• SME Context Considerations

C-2

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International Country Selection Issues – Country Technology Environment

1. Country attractiveness - conducive for technology collaboration with Canadian SMEs?

2. Country's position on SME collaboration / strategic alliances both domestically & internationally?

3. Supportiveness of IP and other regulatory regimes of technology collaboration?

4. What is the IP and technology transfer orientation and

character? How do they differ amongst Institutes?

1 of 3C-3

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International Country Selection Issues – Country Technology Environment

5. Nature of country linkages with: a) NRC Institutes b) SBDAs, c) Canadian

provinces?6. Country similarity & compatibility of:

a) industry / SMEs structure & character with Canada in given technology domain?

b) nature of innovation and growth in SMEs to Canadian SMEs?

8. Who is the national or local champion?9. Country's economic programs - plans or policies - that

support / encourage SMEs and innovation?

2 of 3C-4

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International Country Selection Issues – Country Technology Environment

10. Extent of integration of country's economic, S&T programs and policies:

a. National, regional and local program jurisdictions?

b. SME research commitment in the country: in-house, sourced from universities, etc?

11. Is the country targeting Canada for technology linkages? e.g. Germany, or Scotland for Photonics

3 of 3C-5

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International Country Selection Issues – Country Market Environment1. Size of market and potential?2. Country trade history & competition level for products

incorporating the technology under consideration?3. SME manufacturing in Canada versus FDI incentives in

host country?4. Effective positioning of DFAIT / trade commissioners in the

country? 5. Existing complementary trade associations in the country?

MOU linkages?6. Any Canada - country trade agreements?7. Is the country a gateway/ major trade partner with other

countries of interest to Canada?

C-6

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International Country Selection Issues – SME Context Considerations

1. What innovation support organizations / programs similar to IRAP and / or supportive of SME innovation and international technology collaborations?

2. What is the SME orientation to collaboration with other SMEs?

3.  Are there IRAP- like organizations or Industry Associations prepared to work with IRAP?

1 of 2C-7

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International Country Selection Issues – SME Context Considerations

4. Amount of SME technology investment (in a given technology domain) in the country?

5. History of Prior of Canadian S&T linkages, and links by Canadian industrial / technology organizations to similar organizations in this country?

6. Is country linked to technology and innovation in other countries of strategic interest to IRAP?

2 of 2C-8

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The 5 “A”s of Technology Transfer - SMEs

• Awareness of Market – needs / sources

• Assessment of Technology Opportunity

• Acquisition of Technology / collaboration

• Adaptation of Technology

• Access Market – JV, future technology supply

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Funding of Joint International Projects with Universities and SMEs

Examples of Access to:

• European Union’s 6th Framework

• Intelligent Manufacturing Systems Consortia

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IRAP and NSERC have coordinated access to International ProgramsAdvantages to researchers:

• Faster turn around

• Coordinated technical Peer reviews.

• Leverage Funding

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COMPLIMENTARY NATIONAL PROJECTS

TWO LINKED PROJECTS

UNIV. SME

NSERC STRATEGIC or OPERATING

GRANTS

MINOR SUBCONTRACT

IRAP

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INTERNATIONAL PROJECTS WITH CANADIAN COLLABORATORS

International Canadians

NSERC - CRDUNIV.

SME IRAP

SR&ED ITCs

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• IRAP - USE T.I.P. Element for EXPLORATORY JOINT VISIT

- Airfare normally - Regular IRAP for R&D

• NSERC - USE C.R.D.

IRAP and NSERC Coordinate Review / Sign Offs

NSERC - IRAP POTENTIAL PROJECT

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NEED CLOSE COORDINATION• NSERC - Use C.R.D. Process

- If < $100 K NO FIXED DATES - If $100+ K 5 MEETINGS / Yr

• IRAP - No Fixed Dates in most Regions- Decisions: < $15 K Aim 14 days

< $100 K “ 30 days $100+K “90 days

NSERC - IRAP REVIEWS of JOINT PROJECTS

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For SAME JOINT PROJECT• If Use Same Reviewers:

• Need Company approval to use NON Federal Government person

• If IRAP uses University Reviewer, need prior approval to permit release of NAME of academic - IF needed -Access To Info Program

NSERC - IRAP PROJECT REVIEWS

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Contacts:• IRAP* Denys Cooper

• NSERC Guy Drapeau

* IRAP sits on NSERC CRD Committee

NSERC - IRAP PROJECTS

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European Union – 6th Framework 2002-6 • 6th Program Launched in 2002 November• 17.5 B Euros ($28 B Can) - up from 15B Euros for FP 5• Projects are likely to be larger and longer term – so may hit

SMEs• BUT EU policy is to have more SMEs involved

• EU is no longer the main contractual party. • EU does not sign the consortium agreement.• ALL Participants must sign the consortium agreement,

• EU negotiates with the consortium LEAD on funding • The LEAD is accountable for the management, to disperse

funds, and for reporting• Change in Parties no longer needs EU approval – decided by

Participants

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European Union – 6th FrameworkIP issues are more flexible.• Background IP – parties can negotiate with or

without royalty fees:• to disclose or not their IP, • allow use for research purposes or declare rights to

use for post project.

• Foreground IP - Parties must agree to define access for European benefits: Typically royalty free during project plus 2 + years after project end, BUT the rights to use must be specifically requested. All parties must be told of any limitations.

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European Union – 6th Framework• Only in special cases will EU Commission

intervene on IP rights (such as some exclusive or non-EU licenses that hurt European competitivity)

• Under a few special conditions, Canadian parties may receive funds from the consortium.

• Marie Curie Fellowships of EU are open for European or Canadian researchers to undertake 1-3 year exchanges.

• IST-EC set up to facilitate EU – Canada info tech networking – lead is Brigitte Leger of DFAIT.

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World Trade Organization WTO – Subsidy Issues• For 1995- 1999, there was protection of R&D subsidies • No longer with the collapse of Seattle talks for 2000+• Severe penalties if industrial subsidies cause harm or damage to a foreign

industry – either for Canadian Exports or reduction in Imports • The only exception now is the 1% de minimis clause• i.e. If a firm receives $100,000 in government support, then it must

generate $10 M in downstream sales to be protected.• Working Group in Geneva looking at reinstating some sort of subsidy

protection.

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Traffic Light Framework

• Prohibited (red light) subsidies

• Actionable (amber light) subsidies

• Non-actionable (green light) subsidies

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SAMPLES of WTO CASES

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• CANADA has LOST Some KEY WTO Cases

• WTO Ruling against Subsidies for Jets– Canada’s TPC $$ s to Bombardier, and EDC $– Brazil’s Export Financing to Embrauer

• Revisions made: – TPC - 2000 Aug - Accepted– Brazil - few changes - has lost 5 Rounds

•Now filed a general Complaint against Canada’s Industry Portfolio Programs

– Severe Penalties could be placed by Canada - $1.5 B?

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EXTRACTS from RECENT PUBLICATIONS - No-No s !!

• INSTITUTE’S MISSION is to STRENGTHEN FIRM’S COMPETITIVE POSITION in GLOBAL ECONOMY

• To GIVE FIRMS a BOOST in WORLD MARKET

• DEVELOPING NEW PRODUCTS for FOREIGN

MARKETS • PRODUCT REDUCED IMPORTS

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Dr. Denys G. T. Cooper, Director Strategic AlliancesIndustrial Research Assistance ProgramNational Research Council Canada(613) 993-7620 fax (613) 952-1079 denys.cooper@nrc-cnrc.gc.ca