As I have noted on more than one occasion, the ‘success’ model in Canadian technology-based businesses is predicated on a buy-out, i.e. develop and grow your business so you can sell it and retire. The news about Canadian Nano Technologies (Canano) fits very well into this model. From the Jan. 12, 2011 news item on Nanotechnology Now,
Arkansas-based NanoMech, Inc. announced today that it has acquired Canadian Nano Technologies, LLC (Canano).
Canano (www.CanadianNano.com) provides custom engineered nanopowders designed to solve unique problems, adding value to products that span multiple industries including electronics, agriculture, solar energy, and aerospace. The company was founded to develop and commercialize applications of pure metal nanopowders. Using a proprietary gas condensation process partially based on research carried out at Los Alamos National Laboratory, Canano produces a wide variety of high-quality nanoparticles. Their proprietary process is unique and offers significant improvements over other nanoparticle production/collection processes.
NanoMech is a leading designer and manufacturer of nanoparticle-based additives, coatings and coating deposition systems.
Richard Tacker, Founder and CEO of Canano said, “Our customers have seen the value that our custom-engineered nanopowders bring to their products, and as a result the demand for our materials is growing rapidly. By joining NanoMech we can take advantage of their excellent management team, nanomanufacturing expertise, and scale up our production capacity to serve existing and future customers.”
The Canadian technology certainly has some interesting applications,
The nanopowder technology applications include advance methods of improving: nutrient replacement fertilizers and environmentally safe pesticides and conductive inks for printed circuit boards, RFID’s, photovoltaic printed solar cells, solar connectors, surface coatings, new generation ballistics, RF shielding, self-cleaning surfaces, solar heaters, condensers , silicon wafers, solid rocket fuels, and primers. Other applications include textiles, nano fabrics for clothing and car seat covers, odor free materials, cosmetics, sunscreens, deodorants, lip balm, cleansing products, surface protectants, cleaning chemicals, antibacterial coatings, scratch resistant surfaces, thermal barriers, super hydrophobic, dielectrics, wound dressings, lighter, stronger sports equipment, smart materials, air purifiers, water filtration and bio-aerosols, safety, sun and high definition glasses, non-reflective and smart shielding, odor free refrigerators and washing machines, automotive parts, chip resistant paints, non-corrosives, cement, concrete, and fuel savers, and much more.
Meanwhile, the discussion about innovation in Canada continues as we try to figure out why we aren’t better at innovating as per a Jan. 12, 2011 article by John Lorinc for University Affairs. (Thanks to Rob Annan for the tip via Twitter.) Lorinc notes in his article,
In its ninth report on the state of Ontario’s competitiveness, the task force headed by Roger Martin, dean of the University of Toronto’s Joseph L. Rotman School of Management, argues that low productivity in the country’s manufacturing heartland has led to low prosperity, revealing an “innovation gap.” Professor Martin writes that public policy is more concerned with science-driven inventions that, while very important to society, won’t necessarily lead to products and services that consumers want – and thus products and services that could improve Ontario’s innovation capabilities. [emphasis mine]
I am not sure that a focus on ‘science-driven inventions’ is the big problem. Certainly our inventions seem attractive to large foreign companies and corporations as per the Canano experience and many others. The article even points out that Apple is currently pursuing RIM, which is, for now, the largest Canadian technology company.
The perspective from William Polushin from McGill is closer to my own,
For many years, William Polushin has taught a core international business undergraduate course at McGill University’s Desautels Faculty of Management. Each year Mr. Polushin (who’s also founding director of the Desautels program for international competitiveness, trade and innovation) polls his students about their attitudes towards entrepreneurship and innovation by asking whether they see themselves as the next Bill Gates – in other words, as individuals who will come up with an innovation that could be a game-changer. Year after year, the response rate is consistent: only about 10 percent say they see themselves in this kind of role. By comparison, at a recent conference on North American competitiveness in Mexico City, he asked the students in the audience to raise their hands if they saw themselves running their own businesses in the future. “Well over half put up their hands,” he says.
The results of his straw polls tell a story. Canada has not been especially successful at fostering an innovation mindset among successive generations of business grads and entrepreneurs. Mr. Polushin says, “We don’t have a strong risk orientation in our own country.” [emphasis mine] Most of his students aspire to work in large companies, even though the supply of Canadian-based multinationals continues to shrink due to consolidation. The result, he says, is that much R&D and innovation activity occurs elsewhere.
For a bit of contrast,
Although he’s based at the epicentre of Ottawa’s policy machinery, veteran Statistics Canada economist John Baldwin has a message that runs sharply counter to much of the conventional wisdom that emanates from the capital’s think tanks. “There’s an awful lot of innovation taking place,” says Dr. Baldwin, director of StatsCan’s economic analysis division. The problem is that Canadian policy doesn’t recognize it as such.
I think that’s true too and illustrates the point that discussion about innovation in Canada is complex and nuanced. I recommend reading Lorinc’s entire article.
Todd Babiuk’s article for the Edmonton Journal, Canada failing to create culture of innovation, provides an insider’s perspective from Peter Hackett,
He was, for five years, the president and CEO of a now-shuttered endowment fund called Alberta Ingenuity. The mandate of Alberta Ingenuity, devised to be independent of the provincial government, was to encourage and support innovation in science, technology and engineering. This innovation would lead to spinoff companies that would create fabulous wealth and opportunity for Albertans, attract talented people, and diversify the economy.
Then, all of a sudden, he wasn’t the president and CEO of an independent organization. Alberta Ingenuity has been replaced by Alberta Innovates, and it is operated by the department of Advanced Education and Technology.
“What I take from it, in terms of lessons, is it’s thrilling to watch a group of people take a great product to the market,” said Hackett, in his current office at the University of Alberta’s National Institute for Nanotechnology, where he is a fellow. Before he arrived in Alberta, Hackett did similar work at the National Research Council in Ottawa, spinning Canadian research into businesses.
“But in 15 years of an innovation agenda, honestly,” he said, “governments have accomplished nothing.”
On a YouTube video shot at the Canadian Science Policy Centre in late 2010, Hackett criticizes the Canadian government’s unhelpful and backward interventions into business, through the tax system.
“If you’re making a profit, we’re going to help you. But if you’re growing, we won’t. [emphasis mine] In the U.S., it’s completely the other way around. That’s why they have a lot of small companies that grow into big companies.”
In the same video he outlines, briefly and rather devastatingly, the problem with venture capital in Canada. “Government’s intervention into venture capital has ruined the ability for Canadian companies to grow,” he says.
… “We created a tax break for investing in venture capital,” he said, in his office. “So it was about the tax break, not this great company: Facebook, whatever you like. It’s absurd!”
Point well taken regarding the tax break for venture capital. As I recall, there were similar issues with film funding tax breaks. These were addressed and finally, real movies as opposed to ‘tax break’ movies got funded. Part of the problem with government tax programmes such as tax breaks for venture capital funding or film funding is the law of unintended (and counterproductive) consequences and the extraordinarily long time it takes to resolve them.
There was one other point in Hackett’s interview, “If you’re making a profit, we’re going to help you. But if you’re growing, we won’t,” which is well illustrated by Rob Annan’s Nov. 30, 2010 posting (on the Researcher Form blog) where he discusses this phenomenon in the context of Medicago,
Medicago is a Canadian company that produces vaccines in tobacco plants instead of using traditional egg-production techniques. This allows a much more rapid development and deployment of seasonal and pandemic vaccines. Their proprietary technology, currently in phase I and II clinical trials, was developed in Canada thanks in part to government funding …
They’ve been awarded numerous Canadian business and technology awards. They have translated these investments and successes into millions of dollars in private sector investment and a public listing on the TSX. Not bad for a company based out of Quebec City.
So what’s wrong with this obvious success story?
Medicago made the news this week because the US Department of Defense is investing $21-million to build a 90,000 sq ft state-of-the art production facility in North Carolina. The facility will be able to produce 120-million pandemic vaccine doses annually or 40-million seasonal vaccine doses annually. In a news release, the US government recognizes the company’s ability to bolster domestic vaccine supply, respond more rapidly than traditional methods, and bring “hundreds of good paying jobs” to the region.
The 90,000 sq ft facility in North Carolina will dwarf the current estimated 15,000 sq ft dedicated to production in Quebec City, and will inevitably shift the company’s focus south.
The Canadian government’s response?
According to CBC news, Health Canada remains committed to egg-based vaccines …
While it’s discouraging to read about, I like to find hope in the fact that innovation in Canada is being discussed and folks seem to be interested in finding ways to promote and nurture innovation in Canada.