Industry Committee on May 27th, 2008

[The Chair, Conservative, James Rajotte]

Thank you.

Merci, Madame Brunelle.

We'll go to Mr. Stanton.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

I echo my colleague's comments this morning. I'm having a great visit here in Winnipeg, albeit a very full day for us. It's terrific to come. We've been at this study for about a month, and this is an opportunity to build on the foundation we've already begun in earnest.

One of the things that has been a recurring theme throughout today, and I must say throughout the course of the study, is the strength of the collaboration and clustering that's been referred to. I'll leave this question open to whoever is best to address this, but could you give us some practical examples of how that happens?

Everyone has talked about the great implications of having groups, or a pooled knowledge, talent and expertise in these areas of science and research, and you're all working in your different areas, but you've all referred to this collaboration that spawns a better movement. What are some practical ways in which that collaboration really takes place?

Dr. Smith.

[Ian Smith]

It all has to do with communication and will. In a smaller town it's a little easier I think than it is in a larger town because there's a loyalty. When A goes to B and asks for help for such and such, you're more likely to receive a positive response in a community of under a million than you would in a community of over a million.

I came to Winnipeg in 1992 with two employees. Now I have about 200. We pulled all these resources together, not by seducing and cajoling, but merely by asking for help, be it from the university, the hospitals, private physicians, or engineering companies. For example, when we began we needed to refurbish our building. We had to form a committee to raise $7 million to do that. On that committee we had the head of Investors Group, the head of the Health Sciences Centre, and the head of St. Boniface Hospital. All of these very credible people came together to help us raise this money to furbish the building and put it together. That's one aspect--small city loyalty.

The other one is to remove the silos between the disciplines. Physics doesn't know how to talk to medicine; biochemistry doesn't know how to talk to architects, etc. Everybody has to change their language, to talk in simple terms and show what we can do together relative to what we do separately. That means a lot of running around. I spent my first year doing nothing much more than talking to various people.

It can happen, but I think it's easier here than it would be in a large place, where there's more competitiveness between areas than there is in a town of under a million, where you really want to help your city or your town.

[Bruce Stanton, Conservative, Simcoe North, ON]

Are there some things that government policy or programs could do to help pull those together, to break down some of those barriers? Are there things we can do to help this clustering and collaboration be better than it is?

[Ian Smith]

I think there's a realization today in the major granting organizations that interdisciplinary research is the way to go. Nobody can know everything, and often you involve many disciplines. There are such things at NSERC and CIHR called interdisciplinary grant programs. You must have a partner from, say, a medical school and a physics department, or an engineering department and a dentistry faculty, something like that to bring them together. It could use a little more funding, perhaps, because they're always having to make decisions to do this or that, but I think the message is out and we are on our way. We are actually on our way to solving that problem of interdisciplinary collaboration. It's simply language and will.

[Bruce Stanton, Conservative, Simcoe North, ON]

Mr. Dacombe.

[Len Dacombe]

As Dr. Smith has said, it's communication, and what he's really referring to here, I believe--and I don't want to put words in his mouth, but it's a community. In our experience, we are a community. We are a community of industry members and government representatives, including small business and large business, and we help manage the IP, because IP is a pain. The management of IP is a very large pain, so we help our industry sponsors by managing the IP for them. We help them by protecting it through the patent process--that's part of the privilege of the service you get when you join TRLabs--and that helps the companies in the innovation process.

I also think, from a funding perspective--and I would agree with Dr. Smith--that we need to increase the R and D spending in this country. But I think we also have to maybe reallocate it so that more of it is going to the industry-participating programs that exist today.

[Bruce Stanton, Conservative, Simcoe North, ON]

I'll pass it over to either of my colleagues.

[The Chair, Conservative, James Rajotte]

One minute, Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

I have a quick question. We all realize the importance of communication--as you mentioned, communication and will. In listening to our witnesses in the past, we sometimes see that there seems to be a disconnect from the people working at the bottom level to the government up here. By the time the communication gets anywhere, you lose that advantage of innovation.

In the study, what we're looking for are recommendations from people in the community, such as you. Do you have some recommendations that would help the government as far as getting this communication and will to move a little more smoothly?

[Ian Smith]

There's a committee called PAGSE.

Do you know PAGSE? It meets with members of Parliament once a month in Ottawa and it invites representatives from the scientific community to give talks. I know this because I gave one on commercialization of medical devices to an audience of maybe 10 or 15 parliamentarians. It wasn't a very good day because I think there was an extension of the sitting that day. But that committee has been going for about five years. I think all that needs to be done there is a better realization that it's happening and that it's there, because the mechanism of knowledge transfer is there.

I would say that from the community of Ottawa there were at least 150 people in that meeting. Unfortunately, the MPs were a small audience because there was a vote or something that was very urgent. But I understand the attendance is pretty good. It's just to find out a better means of your knowing when it's going to be and what it's going to be. It's always in one of those very large rooms in the West Block of Parliament.

So that's my suggestion.

[The Chair, Conservative, James Rajotte]

We are over time, so perhaps I could go on.

Just for the information of members and witnesses, it's a bacon-and-eggs breakfast they sponsor. I think it's once a month in room 200 in the West Block.

We'll go back to Mr. Simard, please.

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you very much, Mr. Chair.

I wonder if you can speak to us about human resources. Pretty well everybody who has come before our committee has talked about human resources, about attracting the best and the brightest to our organizations here. Has that been a challenge? Have we been able to put forward interesting enough labs? They'll come to a world-class facility, but they won't come if we're not there. Has that been a challenge here in Winnipeg in your organization?

[Len Dacombe]

I can speak on behalf of the industry sponsors I represent. It's a very unanimous chant that they are having a difficult time in getting qualified people. One of our outputs is high-quality people--HQP, as we call it--and we work very hard with the university to get the best students working on the most relevant industry projects. That is one of our greatest outputs. We're measured very tightly on it by both the federal and provincial governments. We are meeting and exceeding the matrix, but HR high-quality people still remain a very difficult thing for the companies I represent.

[Harry Schulz]

We are, for the institute, in the middle of recruiting a poster boy. Great institutes always have someone like a Dr. Plummer at the heart of them. We're looking at a team that we're trying to snag in the neurosciences. We would put a package together to bring them, probably from abroad, with the idea of establishing the reputation of the institute. We're probably looking for a 40-something...someone who has fire in his or her belly and a group of colleagues around them. We want to give them their own institute and a pocketful of money to come. So the issue of human resources is very close to our hearts.

A Dr. Plummer or an Ian Smith, or those types, will define what an institute looks like and become absolutely catalytic. The people who work around them often wind up being collections of characters who, over the years, have met, worked well together, and have magic. So it's not about putting an advertisement in The Globe and Mail.

That comment is my side of it.

[Roman Szumski]

The story you actually have here in Winnipeg with medical device development, which I'm familiar with, obviously started with attracting some key high-quality people. The other key is to have sustained federal investment over a period of time that lets you create the critical mass that allows you to attract the top players. Prior to coming to NRC, I wouldn't have thought to myself that Canada was one of the world-renowned places for the development of MRI. That sounds like something that happens in Germany or in the U.S. But it is in Canada, and more than that, it's in Winnipeg. And it's in Winnipeg because you have attracted the right people to Winnipeg. That critical mass leads to expertise in terms of technical development at IBD and expertise in terms of the medical application of that technology in the hospitals. Both of them start to work together over time, because we have the right type of leadership that focuses on the relationships required to lever the funds and lever the investments.

So I think you actually have a good working example here of how to do it right.

[Raymond Simard, Liberal, Saint Boniface, MB]

Mr. Smith, you spoke about your seven technology partner spinoffs. They're a very impressive group, by the way. Could you tell me how you follow them, how closely you follow these groups? When do you cut the cord, basically?

[Ian Smith]

We follow them in the beginning, because we incubate them. So at the moment the company is formed, usually we rent them space. We have them in physical proximity. Then as they grow, they usually move out. We have an incubator building now. I mentioned that in my speech. Now they're across the way, and the umbilical cord is cut at that moment, and they become clients as opposed to children, if you like.

[Raymond Simard, Liberal, Saint Boniface, MB]

You give them advice.

[Ian Smith]

We give advice, and from then on we give research on a contract basis. So they actually have someone they know, trust, and understand with whom they can now work on a commercial basis, but with full efficiency, because they know the people they are dealing with. And that is still true with IMRIS, which has 120 employees. When they want to take a leap, they come to us and try it out on us. We give them advice, yes or no, and they ask if we can do it for them. We tell them how much, and it seems to work. We follow them through their quarterly reports, of course. Now that they're on the stock exchange, we can follow their numbers.

[Raymond Simard, Liberal, Saint Boniface, MB]

Just quickly, on strategic procurement, because we've been hearing about that a lot as well, with respect to the government's role in terms of purchasing local initiatives, is that happening? I know, for instance, that in Winnipeg a company produced fantastic software, but they could never get into the government's strategic procurement initiatives. They couldn't get in. They had to go to IBM or somebody else to do that. Is that an issue? Is that something we should be looking at as well to encourage our smaller companies?

[The Chair, Conservative, James Rajotte]

Could we just get one member of the panel to address this?

[Harry Schulz]

I'm with the hospital, so from my side of it, I know very well the saga of a multinational, a General Electric or a Siemens, selling you an MRI versus a small local company called IMRIS selling you an MRI. There is an inherent adverse reaction to risk. If you buy a car from GM, you can't be faulted later for making a bad decision. If you buy that car from Ray Simard Auto, maybe it's not the same level of risk. So I think there's a natural inclination to do that.

The problem is related to government accountability. There have to be public RFPs. There have to be extensive bid review processes. And sometimes the little guy is just competing against great big shops with tons of resources and it's tough to last out. A GE or a Siemens can last through 100 of those competitions before it hits one, and that little guy can't. There is nobody more pure than government on these things, I'll tell you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Simard.

We'll go now to someone we could always trust to buy a good car from, Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Mr. Smith, you and I were having a quick discussion about some of the possibilities in one area being used in another area. Can you elaborate? And do you have good lines of communication? I'm talking about possibly the automotive industry having initiatives or innovations you can use in medicine or something. Are there lines of communication between those two groups or with other groups?