Monday, April 16, 2018

Struggling to Capitalize on R&D, Branch Plants & CDN Space Agency Budget a Little Higher than Expected

         By Chuck Black

The Canadian Space Agency (CSA) has just released early estimates for its next budget. As outlined in the April 16th, 2018 government of Canada post, "2018-19 Departmental Plan for the Canadian Space Agency," at an estimated $349Mln CDN it's a little higher than expected at least when compared to the planned spending for this year.

But that short term "stay of execution" won't last.

Without a major new Canadian focused project, such as the billion dollar RADARSAT Constellation Mission (RCM) to bolster CSA budgets, most science and innovation funding will continue to default to other government organizations like the National Research Council (NRC) and the Natural Sciences and Engineering Research Council (NSERC) which, oddly enough, also report to Innovation, Science and Economic Development (ISED) Minister Navdeep Bains.

Those organizations, as outlined in the March 1st, 2018 post, "'Patent Boxes,' our Canadian Space Agency and the Lack of Real Innovation in the 2018 Federal Budget," are currently flush with several billion additional dollars, courtesy of the latest Federal budget.

However, as outlined in a report released last week by the Ottawa ON based Council of Canadian Academies (CCA) under the title "Competing in a Global Innovation Economy: The Current State of R&D in Canada," our problem isn't with the science.

According to the report, our country is struggling to capitalize its admittedly strong science sector and turn inventions into commercial products:
  • While Canada remains a leading global contributor to research, and is making important contributions across a wide range of fields, our international standing as a leading performer of research is at risk "due to a sustained slide in private and public R&D investment.

Gross domestic expenditures on R&D (GERD), as a % of gross domestic product (GDP) for Canada as compared to the average of member states in the Organization for Economic Co-operation and Development (OECD) an intergovernmental economic organisation with 35 member countries (including 22 of the 28 European Union member states, Australia, Canada, the UK and the US). As demonstrated by the graph, Canada’s total investment in research and development (including government, business and academic sectors) has been dropping as a percentage of its GDP since 2001. Graph c/o John Sopinski/ Globe and Mail/ The Council of Canadian Academies using data supplied by OECD.

  • Canada is not producing research at levels comparable to other leading countries on most enabling and strategic technologies and the research is "comparatively less specialized and less esteemed in the core fields of the natural sciences and engineering."
  • Canadian industrial R&D spending is declining and concentrated in industries that are intrinsically less R&D intensive. Despite poor overall performance, Canada has pockets of R&D strength across several industries.
  • The barriers between innovation and wealth creation in Canada are more significant than those between R&D and innovation. The result is a deficit of technology start-ups growing to scale in Canada, and a loss of economic benefits.
  • Data limitations continue to constrain the assessment of R&D activity and excellence in Canada, particularly in industrial R&D and in the social sciences, arts, and humanities.
As outlined in the April 10th, 2018 Globe and Mail post, "Canada struggling to capitalize on research and development sector," Canada’s current innovation efforts "may not amount to even that much, as other countries surge forward with investments that leverage science and technology and reap the economic rewards."

The article quoted Max Blouw, a former president of Wilfrid Laurier University, who chaired the panel that produced the report, as stating that, "We’re now at a stage where we’d almost have to double our investments in order to catch up to the leaders.”

Of course, there are those like serial entrepreneur Tony Lacavera, who feels that real solutions lie outside the realm of simple spending.

According to Lacavera, at least some of our problems have to do with being too deferential, our oligarchical business structure and our need to subscribe to a "branch plant mentality" where we think that attracting giant foreign firms like Amazon and Boeing (and NASA) is better than developing our own expertise or taking on the mantle of leadership ourselves.

Surely the CSA is also riddled with this perception.

As outlined most recently by career public servant Graham Gibbs (who spent his final seven years in public service as Canada’s counselor for US space affairs in Washington DC) & retired CSA president," W. M. ("Mac") Evans in the June 4th, 2017 post on "A History of the Canadian Space Program - Policies & Lessons Learned Coping with Modest Budgets," the Canadian space program:
... because it is and always has been a modestly budgeted program, has learned that leveraging international cooperation is a necessity, not a luxury...
That sort of sounds like our space agency is happy enough seeking out opportunities to build components for NASA and European Space Agency (ESA) missions.

That could also be why the CSA, as outlined in the March 22nd, 2018 post, "What Happens After the Failure of the Space Advisory Board?," will most likely end up primarily as a subcontractor for future US space exploration efforts.

But it could also be why, as outlined in the February 28th, 2018 post, "'Big Winners' in Tuesday's Federal Budget," $100Mln CDN was allocated in the 2018 Federal budget for "low Earth orbiting (LEO) satellites intended to bring internet services to rural parts of the country." but wasn't allocated through the CSA.

Maybe we shouldn't give the the CSA (or any other ISED managed program, for that matter) any more money until they figure out that we don't need to become simply a branch plant for foreign concerns, figure out how to commercialize our IP and learn how to scale our admittedly innovative start-ups.

We could even an build an entirely original space program. Something unique and designed to address Canadian requirements such as communications over large distances or taking inventory of our assets in the far north.

You know, like Telesat did back in the 1970's and is currently doing today to access the latest $100Mln CDN allocated for funding LEO satellite constellations and what others did in the 1980s -90s with RADARSAT 1 and 2 programs.

Those projects were complete systems, not just components, which were built by Canadians to solve Canadian problems.

We could do that again. What a concept. If the idea was a good one, we could even fund it through the space agency.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

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