Grow­ing busi­nesses


National Post (Latest Edition) - - ISSUES & IDEAS - Rory Fran­cis, Ex­ec­u­tive Di­rec­tor, Prince Ed­ward Is­land BioAl­liance

Re: Silly grants won’t bring Sil­i­con Val­ley north, Diane Fran­cis, Jan. 23 While I agree with the ti­tle of Ms. Fran­cis’ re­cent col­umn, the con­tent that fol­lows risks un­der­min­ing valid pri­vate and pub­lic- sec­tor ef­forts at in­creas­ing the com­mer­cial­iza­tion suc­cess of tech­nol­ogy com­pa­nies in Canada.

The irony is that she at­tacks an un­der­funded fed­eral or­ga­ni­za­tion — the Na­tional Re­search Coun­cil’s In­dus­trial Re­search As­sis­tance Pro­gram ( NRC- IRAP) — that is well­re­spected by large and small busi­ness, and ac­tive in the full range of tech­nol­ogy sec­tors in Canada. IRAP grants to care­fully screened re­cip­i­ents are crit­i­cal to those com­pa­nies es­tab­lish­ing proof of con­cept for new tech­nolo­gies and mov­ing closer to the holy grail of pri­vate-sec­tor in­vest­ment.

Then fol­lows the fal­lacy that “Amer­i­cans have cre­ated an in­no­va­tion econ­omy with­out hand­ing out cash.” Have you checked re­cently on the bud­gets of the decades- old ( and well- funded) Small Busi­ness In­no­va­tion Re­search ( SBIR) and Small Busi­ness Tech­nol­ogy Trans­fer (STTR) grant pro­grams in the U. S.? How about the Na­tional In­sti­tutes of Health (NIH)? The Na­tional Sci­ence Foundation (NSF)? The De­fence Ad­vanced Re­search Projects Agency (DARPA).

Yes, IRAP also funds the Cana­dian Ac­cel­er­a­tor and In­cu­ba­tor Pro­gram (CAIP), set up by the late fi­nance min­is­ter Jim Fla­herty in the 2012 fed­eral bud­get to en­sure that early stage tech­nol­ogy com­pa­nies in Canada had ac­cess to the men­tor­ship and guid­ance nec­es­sary to nav­i­gate the chal­leng­ing road from tech­nol­ogy to com­mer­cial suc­cess. The em­pha­sis is on help­ing com­pa­nies be­come “in­vestor ready” and at­tract­ing pri­vate cap­i­tal nec­es­sary to scale busi­nesses. No com­pany in Canada sur­vives on fed­eral or pro­vin­cial grants for long, nor wishes to. But seed cap­i­tal is a nec­es­sary stage.

The PEI BioAl­liance’s Emer­gence In­cu­ba­tor is one of 15 pri­vate- for- profit, and busi­ness- led not- for- prof­its, funded un­der CAIP. With 70 bio­science busi­nesses cur­rently in our in­cu­ba­tor pro­gram both from across Canada and from other coun­tries bring­ing new in­vest­ment to Canada, I would be happy to tour Ms. Fran­cis around our bio­science clus­ter to demon­strate what re­turn- on- in­vest­ment of pub­lic funds looks like. Busi­nesses de­vel­op­ing and man­u­fac­tur­ing phar­ma­ceu­ti­cal in­gre­di­ents, nat­u­ral health prod­ucts, di­ag­nos­tics, an­i­mal health and fish vac­cines for global markets. She would see what com­mit­ted pri­vate-pub­lic part­ner­ships can do to trans­form economies, this one in At­lantic Canada, where there is damn lit­tle pro­vin­cial money “be­ing handed out like Hal­loween candy” in eco­nomic de­vel­op­ment cir­cles.

I can’t speak for all in­cu­ba­tors and ac­cel­er­a­tors in Canada, but I can speak for Emer­gence. There is no link be­tween IRAP grants and a desk in a sub­si­dized ac­cel­er­a­tor. There are no com­mis­sions, there are no “fat ex­ec­u­tives’ salaries.” There are no “fake com­pa­nies.” Sure, there are star­tups — en­trepreneur­s with dreams and promis­ing tech­nolo­gies, some of which will be­come our suc­cess sto­ries of the fu­ture, many of which will fail. Fail early — fail cheap, and avoid putting pub­lic or pri­vate funds into los­ing busi­ness plans. That’s part of our job. Work with the ones that have a shot. Last time I looked, Sil­i­con Val­ley had its share of busi­nesses with tech­nolo­gies that never made it to mar­ket. That’s just busi­ness.

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