The Jenkins Report: A review of federal R&D support

Today we report upon the release of Innovation Canada: A Call to Action, formally the Report of the Independent Panel on Federal Support to Research and Development and commonly referred to as the Jenkins Report (after the panel’s chair, Tom Jenkins). You can read the full report at rd-review.ca, and I’ll be summarising the key points below.

In October 2010, an independent expert panel was convened to review the three types of federal research and development initiatives for businesses: tax incentives, direct support programmes and indirect support programmes. After a year of thorough briefings, 228 written submissions, 60 programme reviews and extensive group consultations (including experts from the UK and other OECD countries), the panel made six broad recommendations:

Create the Industrial Research and Innovation Council

This new department would be the go-to agency for entrepreneurs with innovative ideas. It would deliver the existing innovation support programmes (such as the Industrial Research Assistance Program), provide a “concierge” service to help firms access the support tools that they need and help to develop federal innovation talent strategies.

Simplify the Scientific Research and Experimental Development Tax Credit

The current SR&ED programme is overly complicated, to the extent that firms often hire consultants to make their submissions. The base for the tax credit should be labour-related costs (for small and medium enterprises), and there should be more support for direct expenditure.

Facilitate access to risk capital

Innovative, growing companies require access to risk capital, but often have trouble getting it. Risk capital funds to support companies at start-up and later stages should be established, delivered through the Business Development Bank of Canada.

Dismantle the National Research Council

The business-oriented institutes of the National Research Council should become independent, not-for-profit organisations that focus private sector research. The institutes that perform fundamental research should become affiliates of universities, while those involved with public policy should be transferred to the relevant federal agencies.

Create opportunities in public procurement

The government should use its purchasing power to stimulate innovation and productivity in Canadian suppliers. The pilot Canadian Innovation Commercialization Program should be expanded and made permanent.

Establish business innovation as a whole-of-government priority

This reordering of priorities cannot be done piecemeal if it is to drive the government’s economic strategy. A minister should be designated as the voice of innovation, and an external Innovation Advisory Committee should be created.

The report recommends that most of these changes be implemented over the next few years, with new initiatives (such as the IRIC) happening quickly and changes to existing programmes (such as the SR&ED) happening more gradually. Expect plenty of comment, feedback and analysis over the next few weeks.