ARCHIVED - Evaluation of Central and Western Cluster Initiatives - NRC Centre for the Commercialization of Biomedical Technology (NRC-CCBT)

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Executive Summary

In 2001, NRC was allocated resources to target a number of emerging research and technology fields that were identified by local partners in consultations with NRC. Under the central and western technology cluster initiatives (CWI) six initiatives were funded, each with an identified technology focus. These included:

  • aluminum transformation in the Saguenay;
  • photonics fabrication in Ottawa;
  • biomedical in Winnipeg;
  • nutraceuticals and functional foods in Saskatoon;
  • nanotechnology in Edmonton; and
  • fuel cells in Vancouver.

In 2005, an evaluation of these Round II clusters was launched. This report presents the key findings, conclusions and recommendations related to the Centre for the Commercialization of Biomedical Technology (NRC-CCBT). NRC-CCBT is the Industry Partnership Facility (IPF) adjacent to NRC's Institute for Biodiagnostics (NRC-IBD) in Winnipeg.

The primary reasons for conducting an evaluation of the initiative at this time are as follows:

  • to collect information on the progress of the initiatives to date, including lessons learned and novel practices, as a means of supporting NRC's strategic direction in contributing to the socio-economic sustainability of Canada's communities, through technology clusters;
  • to provide an opportunity to communicate with initiative stakeholders in the communities; and
  • to provide information on NRC's performance to date, to be used to facilitate decision-making around funding renewal of the cluster initiatives, which expires at the end of a five year funding cycle (2006-2007).

NRC Senior Executive Committee approved the Terms of Reference for this evaluation in September 2005.

The evaluation covered the period 2002-2003 to 2005-2006 inclusive. It addressed issues related to relevance; early outcomes and impacts; design, delivery and cost-effectiveness; and lessons learned and novel practices. The federal government's Expenditure Review Committee questions were also taken into account in the development of the evaluation issues.

The key methodologies used to address the evaluation issues included a review of documents; a review of administrative and performance data; key informant interviews; and a cluster measurement study.

Centre for the Commercialization of Biomedical Technology Cluster Initiative Overview

NRC launched its Centre for the Commercialization of Biomedical Technology cluster initiative in 2002 as part of a second round of funding dedicated to technology clustering. Footnote 1 Lead delivery of the initiative is the responsibility of NRC-IBD. NRC-CISTI and NRC-IRAP also play roles in the initiative.

A total of $10M over five years, in federal resources, was allocated to the Centre for Commercialization of Biomedical Technology (NRC-CCBT) cluster initiative in the 2001 federal budget. All NRC resources in support of the technology cluster initiative have been directed to NRC-IBD. None were allocated to NRC-CISTI or NRC-IRAP.

NRC-CCBT is an Industry Partnership Facility (IPF) that acts as an incubator for new entrepreneurs and small Canadian biomedical technology firms. It is a four storey, 5,109.5 m2 (55,000 ft2) building, adjacent to NRC-IBD's facility in downtown Winnipeg. NRC-CCBT comprises a mix of office and laboratory space available for rent as well as housing part of NRC-IBD's prototyping facilities. NRC-CCBT is the newest addition to NRC's network of IPFs across the country. Thirteen other IPFs are currently in operation at other NRC Institutes. The main goal of the IPFs is to foster the creation and growth of new firms aligned with the area of expertise of the Institute they are associated with. Firms renting space in these facilities are able to easily access NRC expertise, laboratories and equipment.

Based on the evaluation study conducted from October 2005 to June 2006, the following key evaluation findings and recommendations were identified.

General Conclusion

NRC's overarching rationale for launching technology cluster initiatives is to support the economic prosperity of communities. The evaluation found that the Centre for the Commercialization of Biomedical Technology cluster initiative is relevant and aligns with the priorities and needs of the region. The creation of an IPF associated with NRC-IBD to provide space for early start-up firms was a logical step for the Institute in its efforts to contribute to the Winnipeg biomedical sector. The province of Manitoba supported the initiative through the provision of $1.75M to the project. Although there are similar offerings of incubation space in the region, none are specifically targeted to biomedical technologies.

The NRC-CCBT building opened in October 2005, on budget but six months after the planned opening day. The facility is presently occupied by four service-delivery firms and NRC-IBD's prototyping group. It is anticipated that these will help attract biomedical start-ups to the building. NRC-IBD has signed a Memorandum of Collaboration with one of NRC-CCBT's tenants, Biomedical Commercialization Canada (BCC). This national not-for-profit organization is in the process of developing programs and services it will offer to entrepreneurs and start-up biomedical firms, as well as to established firms wanting to enter or expand into the biomedical technology market. It is planned that these programs and services will be offered to future NRC-CCBT lessees. It appears that the NRC-CCBT/BCC arrangement is a value added model, but it is too early to determine the level of success.

The evaluation found that, although some high level statements about a vision and goals for the new building were documented, no formal implementation plan for the building once it was complete was ever developed. Some interviewees expressed concern about the lack of long-term, ongoing operational funds and felt this could potentially put the Centre in a compromising financial position in the future.

Despite not receiving specific funding under the NRC-CCBT technology cluster initiative, NRC-CISTI and NRC-IRAP have contributed in ways appropriate to their mandates. The two organizations have worked in partnership to provide business analysis expertise to firms within NRC-CCBT.

NRC-IBD senior management is recognized as a champion for facilitating cluster development and plays an important leadership role. Access to venture capital was identified as the major impeding factor that may limit the region's success.

Summary of Findings and Recommendations – Relevance

The evaluation found that the establishment of NRC-CCBT in support of a biomedical technology cluster initiative was consistent with federal government and NRC priorities established in 2002 through the Innovation Strategy. The initiative continues to be aligned with federal priorities, and in particular, with NRC's new Strategy. The evaluation also found that there is a legitimate role for NRC in fostering the development of clusters, and in supporting the development of biomedical technologies for Canada.

The Centre for the Commercialization for Biomedical Technology is consistent with priorities and needs in the region. In 2003, the Manitoba government released a report entitled Manitoba - At the Forefront of Innovation, which established an innovation framework for the province and articulated strategic priority areas in which Manitoba had particular strengths. One of these is biotechnology (including biomedical). NRC-CCBT is also aligned with the priorities of other federal departments active in the region. For instance, Western Economic Diversification (WD) identifies technology clustering as one of its strategic priorities and, in particular, life sciences as offering a 'field of opportunities for economic development in Manitoba.' In addition, NRC-CCBT aligns with the priorities of the City of Winnipeg, which has recognized health research and biotechnology as one of its five strategic areas of focus.

The evaluation found that around the time of the federal Innovation Strategy (2002), it was recognized by most key stakeholders in Winnipeg that, if the biotechnology/biomedical sector was to grow in Winnipeg, business incubation space would be needed to help stimulate and facilitate new firm formation (at that time there were no technology incubators in Winnipeg). NRC-IBD management felt that the establishment of a purpose-built Industry Partnership Facility (IPF) would be the next logical step for the Institute in its efforts to contribute to the Winnipeg biomedical sector. At the time, half of NRC's Institutes had specialized industry partnership facilities available to them.

Summary of Findings and Recommendations – Early Outcomes and Impacts

Access to Industry Partnership Facilities: NRC-CCBT provides industry partnership space. It has been in operation for six months. The facility is presently occupied by four service-delivery firms and NRC-IBD's prototyping group. It is anticipated that these will help attract biomedical start-ups to the building.

Attraction and Development of Highly Qualified Personnel and Level of Research Activity: The NRC-CCBT cluster initiative has been in operation for only six months. There are no early outcomes yet realized under these headings. These will be important outcomes to measure in future evaluations.

Access to NRC Technology and Industry Support Resources: NRC-CISTI activities are contributing to support for the biomedical cluster initiative, in particular through the development of a medical technology newsletter and the provision of business analysis expertise. NRC-IRAP activities have supported the biomedical technology cluster initiative, in particular through funding of a business analyst position accessible to BCC and its clients.

Cluster Networking and Industry Development: There is significant commitment by all stakeholders to regional economic growth in life sciences and a high degree of civic engagement. Senior management at NRC-IBD is a recognized champion and plays an important leadership role. The biomedical industry is struggling to grow. While NRC-CCBT aims to make an important contribution, it is only one player in an innovation system that will be required for industry to be successful.

Summary of Findings and Recommendations – Design, Delivery and Cost-Effectiveness

Initiative Implementation: The NRC-CCBT building was constructed within budget but with some delay. The building opened in October 2005, six months after the planned opening date. The absence of initial planning documents made it difficult to assess whether the initiative was implemented as intended.

Effectiveness of Management Practices: NRC-IBD has signed a Memorandum of Collaboration with Biomedical Commercialization Canada, a national not-for-profit organization that offers programs and services to entrepreneurs and start-up biomedical firms, as well as to established firms wanting to enter or expand into the biomedical technology market. The lack of a clear governance structure for the management of the new building is causing confusion amongst those interviewed.

Role of NRC Institutes, Programs and Branches: Besides interactions with NRC-CISTI and NRC-IRAP, there are no significant examples of linkages to other NRC Institutes, Programs and Branches. Efforts have been made to establish a network of IPFs across NRC, however, this remains largely informal.

Joint Initiatives: The NRC-CCBT technology cluster initiative is the result of a federal-provincial partnership. The Government of Manitoba supported the initiative through a financial contribution of $1.75M.

Program Complementarity: While there are similar offerings of incubation space and services in the region, none are specifically targeted to biomedical technologies.

Level of Resources: Resources provided for the NRC-CCBT initiative were used effectively to construct the building. Lack of long-term, ongoing operational funds could provide a challenge in the future.

Alternatives: NRC-CCBT's arrangement with BCC to provide programs and services to start-up firms is typical of other incubator approaches, but relatively new for NRC. It appears to be a value added model but it is too early to determine the level of success.

Recommendation 1: NRC-IBD should establish an accountability framework between NRC-IBD and BCC to clarify the roles and responsibilities of the two organizations, particularly relating to tenancy arrangements of NRC-CCBT.

Management Response and Proposed Actions: In progress. Leasable space in NRC-CCBT is already 48% occupied, only nine months after building completion. For the remaining space, in accordance with the IBD-BCC Memorandum of Collaboration setting out each Party's responsibilities, NRC-IBD will consult with BCC to determine space requirements in the next 12 months. For space not required by BCC, NRC-IBD will seek tenants and organizations that will not be in the BCC program, so as not to compete with BCC program objectives.

Recommendation 2: Given the significant amount of space within NRC-CCBT allocated to BCC, NRC-IBD should ensure that BCC has a current business plan in place outlining timelines, milestones and contingency plans for finding and securing appropriate clients for the allocated space and for participating in BCC programs.

Management Response and Proposed Actions: Completed. BCC has a current Business Plan and Work Plan, submitted to its Board of Directors in March 2006. BCC also reports progress to NRC-IRAP monthly.

Recommendation 3: As per the Memorandum of Collaboration between NRC-IBD and BCC, NRC-IBD should ensure formal meetings of the Joint Steering Committee take place and appropriate mechanisms are established to monitor progress against commitments outlined in the MOC and to meet federal government accountability requirements.

Management Response and Proposed Actions: Accepted. Planning meetings have been ongoing since 10/2005 and carried out on an ad hoc basis to date. Joint Steering Committee meetings will commence in Q4 2006. These meetings will utilize agendas and actions arising to monitor progress against commitments.

Lessons Learned and Novel Practices

The final area examined by the evaluation was lessons learned and novel practices. The findings highlight key lessons learned that could be applied or adopted by the central and western technology cluster initiatives as well as other initiatives launched by NRC in support of technology clustering.

Lessons Learned:

  • The technology cluster initiative funding was mainly allocated for infrastructure costs with minimal funding allocations for long-term operational costs, potentially putting the IPF in a difficult financial position.
  • It takes time to market and recruit start-up firms to a new industry partnership facility and it is not realistic to assume the building will have tenants in place soon after its opening.
  • For accountability and performance measurement, it is important to develop, document and maintain proposals, plans and records as an initiative progresses

Footnotes

Footnote 1

NRC's first round of Technology Cluster funding was for the Atlantic Initiatives, a series of 5 initiatives launched in Atlantic Canada from 2000-01 to 2004-05.

Return to footnote 1 referrer

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