Thank you, Mr. Chairman and members of the committee.
I truly appreciate the opportunity to speak to you in the hopes of helping to advance our shared goal of building and maintaining Canada's leadership position in the global agricultural marketplace.
BioEnterprise Corporation is a not-for-profit company that focuses on the commercialization of agri-technology. We are supported by 40 agricultural organizations, we have strategic partnerships with 15 groups in five provinces, and we work with the technology transfer organizations of the major agricultural universities.
At BioEnterprise, we see innovation on a daily basis. In just the past 15 months, our company has been introduced to over 300 new agri-based opportunities from across Canada, each with unique innovative products or technologies ranging in the areas of agri-health, agri-food, agri-forestry biomass, bioproducts, and clean tech. Unfortunately, the vast majority of these innovations will never make it to the marketplace. Most will languish for a period of time, then fade away because they cannot obtain the support necessary to commercialize their products.
My message to you today is that there is a new wave of agri-technology innovation occurring globally, and Canada can be part of that wave if we get our formula right. We can create new opportunities for farmers and create new high-value-added jobs. With leadership, we can create the environment in which Canada can compete on the world stage. That leadership involves developing the tools to move our innovations from the research stage through to commercialization.
This new wave of agri-technology is going to be revolutionary, just as the development of computing technology has been. That is a field with which I am very familiar. I began my career in computing technology and have founded several successful software companies, some of which are still active today. I have worked for a number of high-tech companies focusing on venture capital and investment, including Apple Computers, where I headed the Canadian arm of their venture capital group.
My experience in the computer technology revolution tells me that the same scale of revolution is happening today in agri-technology. To highlight a few examples, consider the addition of omega-3 to dairy products, which stemmed from research done at the University of Guelph.
In the automotive and aeronautics industries, agriculture-based oils are being used in bio-based composites. The dashboards of BMWs, Chryslers, and Mercedes are made partially from bioplastics containing agricultural oils. The foam in the car seats of Mustangs contains agri-products from Canada. Wine pomace, which is the part of grapes usually discarded in making wine, is now transformed by a Niagara region company into high-value food and cosmetic ingredients.
These are leading Canadian innovations. However, unfortunately, in Canada, successes like these are extremely rare because we fail to commercialize the vast majority of our innovations.
Canada spends hundreds of millions of dollars annually on agri-based research, but study after study has shown us that while Canada has been among the leaders in agricultural research and innovation, our position on the world stage continues to fall. This is partly because of our inability to commercialize new, innovative agricultural technologies.
Other countries are now focusing on commercialization. Two years ago France created a $250 million fund focused on the commercialization of new agri-based technologies. Brazil has a similar $500 million program. These are not to be confused with research programs. They are focused solely on commercialization. On the other side of the world, India and China are quickly building world positions in new, innovative agricultural and agri-food products. In the United States, Indiana, Wisconsin, Illinois, Kansas, Iowa, and Texas have each developed new funding programs focused on commercialization. Lastly there is western Europe, where they are becoming leaders in the bio-economy through funding programs and commercialization clusters.
I would like to bring your attention to a study that was completed in February 2009 for Agriculture and Agri-Food Canada. The report, which is called “The National Commercialization Assessment: Taking Commercialization National”, found a lack of support for commercialization within the agriculture and agri-food sectors. Furthermore, it linked Canada's abysmal track record in commercialization of new agriculture and agri-food products to the lack of support programs focused on commercialization of innovation.
It identified and reconfirmed the following critical issues: first, there is a lack of support within Agriculture and Agri-Food Canada for commercialization; second, there is no link between research conducted and the need to commercialize resulting innovations; third, while regional and provincial networks have been created, there is little collaboration or cooperation among them; fourth, there is no coordinated national strategy that will deliver best practices and the necessary suite of services needed within this sector; fifth, there is a lack of experienced entrepreneurs and no national mentorship or coaching programs to help them; and last, the agriculture and agri-food sectors have been almost entirely ignored by the venture capital and investment community.
This report makes a number of recommendations, but the most critical are the calls for the development of a national commercialization expansion program and for the creation of a national agri-technology commercialization funding vehicle. As an organization that eats, sleeps, and breathes innovation, BioEnterprise strongly concurs with the results and recommendations contained in this report.
I would like to elaborate on these two recommendations.
The first is for the development of a national commercialization expansion program. While there are a variety of regional and provincial service organizations across the country, they have the following problems: they operate in a regional or provincial vacuum, yet innovation and commercialization are global. Their services are incomplete, and most focus only on providing networking and introductory services. They're incapable of shepherding entrepreneurs through the commercialization process. Most organizations have no mentorship or coaching capabilities; expertise is available from coast to coast, but no organizations have the means of finding such mentors, nor do they have access to other mentorship databases that may exist. Best practices that exist in one part of the country may not be transferred to other regions. Finally, there is no formal collaboration or cooperation among these organizations.
The national commercialization expansion program would resolve all of these issues quickly and efficiently. A single entity would manage the development of a full suite of commercialization services that would be made available to entrepreneurs across Canada.
The second recommendation is for the creation of a national agri-technology commercialization funding vehicle.
By now most of us understand what is meant by the investment gap. Since 1999, the number of venture capital firms in Canada has dropped from 145 to fewer than 50. Investment incubators are gone, labour-sponsored funds are quickly disappearing, and the big Canadian banks have left the industry. The few remaining venture capital firms either have no money to invest or are focusing on later-stage investments.
Traditionally, agriculture and agri-food have never been able to attract investment capital to their sector. Today there's very little capital available for commercialization in any sector, and this is particularly problematic in agriculture and agri-food.
The creation of a national agri-technology commercialization funding vehicle has three major objectives. The first is to accelerate the commercialization and growth of agri-technology and of innovative new companies in Canada. The second is to increase receptivity in the investment community for future investments in agri-technology. The third is to attract private sector investment from both domestic and foreign sources to Canada's agri-technology sector. These objectives are of equal importance, because successful commercialization of innovation will not take place without private sector investment.
The creation of a national commercialization expansion program and a national agri-technology commercialization funding vehicle would be a catalyst to drive agri-technology commercialization and greater participation by the private sector. For governments and society, new ventures represent jobs, innovation, new products in the economy, wealth creation, a wider tax base, and a healthier sector, but the problems in management of enterprise funding, product development, and market penetration are formidable hurdles for all new ventures. Addressing these problems is vital if Canada's agricultural sector is to evolve to produce high-value innovative products. Our ability to commercialize these innovations is what will drive success for Canadian agriculture and agri-food.
In closing, Mr. Chairman, I would urge the committee to look at the recommendations of this new national commercialization report on agriculture and give them careful consideration as a model for improving competitiveness in the agriculture and agri-food sector.
Thank you for the opportunity to speak today.