Where technology stumbles

[vc_row][vc_column width=”1/1″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″][mk_dropcaps style=”simple-style”]W[/mk_dropcaps]hen it comes to innovation, energy or otherwise, the “Valley of Death” is not a good place. That’s the pre-commercial technology development phase of a project, known as such because that’s when testing and improvements often prove too expensive to implement. The result? Typically a project’s demise.

The path of a technology from development to commercial success — the “innovation chain” — has a steep drop-off in support at this research stage, and that’s key to why Canada struggles on overall international innovation rankings (see charts). (Canadian innovators, however, only have access to support mechanisms to help them reach market in some cases.)[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]An economy’s competitiveness is typically measured by a few key indicators: government, higher-level education and business investments in research and development (referred to in the industry as GERD, HERD and BERD).  According to the Organisation for Economic Co-operation and Development, an international association devoted to promoting policies that improve global economic and social well-being, Canada punches above its weight on the first two measures, but under its weight on the third.

Simply, business investment is not keeping pace with overall economic growth. The issue is ensuring a return on research and development investment by establishing a clear path to market. This is particularly important in times of economic upheaval — it’s paramount that investors see a pathway to a return on their investment.[/vc_column_text][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]Helping investors realize a return (and ultimately innovation success) can be as simple as aiding technologies through the Valley of Death and into market. Helping technology developers establish the team and the business plan they need to get their product to market is also crucial. This support in turn spurs other investors to participate in a project.[/vc_column_text][/vc_column][vc_column width=”1/2″][mk_custom_box border_color=”#000000″ border_width=”1″ bg_position=”left top” bg_repeat=”repeat” bg_stretch=”false” padding_vertical=”5″ padding_horizental=”10″ margin_bottom=”10″ min_height=”100″ bg_color=”#f6f6f6″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]How Canada ranks
When it comes to innovation, Canada lags behind global averages in regard to business investments in research and development (BERD). This diagram shows how the nation compares to the Organisation for Economic Co-operation and Development median for BERD on a range of key measurements.[/vc_column_text][mk_image src=”http://www.energy-exchange.net/wp-content/uploads/2015/01/How_Canada_ranks.png” image_width=”800″ image_height=”250″ crop=”false” lightbox=”true” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”10″][/mk_custom_box][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]Companies that receive this kind of support get clear results. For instance, Sustainable Development Technology Canada, which is funded by the federal government, provides this type of assistance, and the 58 companies into which it has invested $192 million over the past eight years have raised a further $2.5 billion in additional financing from the private sector.

As an example, SDTC recently collaborated with the Canadian Gas Association, which represents the natural gas industry, to establish the $30 million SD Natural Gas Fund, aimed at supporting development and demonstration of new natural gas technology. New models for support such as this fund get business and industry involved — thereby increasing the ratio of business investment in research and development.

Canada is a leader in energy innovation. A lot of effort has gone into applying cleantech to the energy sector. The energy industry is eager to use these tools, and there’s no shortage of good ideas. Around the world, there’s a strong appetite for energy production with as small as possible a footprint on the surrounding natural environment, and an understanding that cleantech is the best way to do that. Continuing to channel Canada’s innovative potential into applying cleantech to the energy sector means answering a worldwide industry need — and that translates into a path to market for Canadian clean technologies.

Mobilizing the nation’s business community to support the next wave of Canadian entrepreneurs is key to innovation success. It’s also a model that ensures Canadian technology survives the Valley of Death.[/vc_column_text][mk_image src=”http://www.energy-exchange.net/wp-content/uploads/2015/01/Funding_Gaps.png” image_width=”800″ image_height=”250″ crop=”false” lightbox=”true” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”10″][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][mk_custom_box border_width=”1″ bg_color=”#86a43f” bg_position=”left top” bg_repeat=”repeat” bg_stretch=”false” padding_vertical=”30″ padding_horizental=”20″ margin_bottom=”10″ min_height=”100″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]Born of the need to focus on getting Canadian innovation to market, Sustainable Development Technology Canada, an arms-length not-for-profit, is an example of a program that supports innovators as they move through the pre-commercial gap. SDTC operates two funds. The SD Tech Fund helps projects that address climate change, air quality and clean soil and water and the NextGen Biofuels Fund supports large, first-of-kind demonstration-scale facilities for the production of next-generation renewable fuels. With a portfolio led mainly by small- and medium- sized enterprises (94 per cent of the portfolio), SDTC has helped many of the companies including General Fusion and Hydrostor, as well as GE and SaskPower.[/vc_column_text][/mk_custom_box][/vc_column][vc_column width=”1/2″][mk_image src=”http://www.energy-exchange.net/wp-content/uploads/2015/01/Surving_the_gap.png” image_width=”800″ image_height=”631″ crop=”false” lightbox=”false” frame_style=”simple” target=”_self” caption_location=”inside-image” align=”left” margin_bottom=”10″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]Surviving the gap — and beyond
Sustainable Development Technology Canada helps fund companies through the technology development stage. This chart shows the additional funding that the companies SDTC invested in generated from the private sector annually since 2005. Note that the private investment in these companies rebounded quickly following the global economic downturn at the end of 2008.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″ el_class=”Story-Author”]— Rick Whittaker is vice-president, investments and chief technology officer, of Sustainable Development Technology Canada.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][mk_padding_divider size=”40″][mk_button dimension=”three” size=”large” outline_skin=”dark” outline_active_color=”#fff” outline_hover_color=”#333333″ bg_color=”#13bdd2″ text_color=”light” icon=”moon-reading” url=”/resources/energy-exchange-magazine/issue-3/” target=”_self” align=”left” fullwidth=”true” margin_top=”0″ margin_bottom=”15″ animation=”fade-in”]Read more stories from the Winter 2015 issue of Energy Exchange magazine[/mk_button][/vc_column][/vc_row]