March 6, 2012 / 7:03 PM / in 6 years

Government plans R&D overhaul, targeting next RIM

Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa March 1, 2012. REUTERS/Chris Wattie

OTTAWA (Reuters) - The Conservative government will “soon” take steps to foster the creation of more high-tech innovators like prized BlackBerry maker Research in Motion, a junior cabinet minister said on Tuesday.

Prime Minister Stephen Harper received advice last year from a group of experts he had tasked with proposing ways to revamp federal programs for business research and development (R&D), an area where Canada lags behind other developed countries.

“The next Steve Jobs, Mike Lazaridis, Mark Zuckerberg or Jim Balsillie is probably walking on campus in Vancouver, Winnipeg, Kitchener, Quebec city or Halifax right now. We need to make sure that he or she has the tools and motivation to prosper here in Canada,” Gary Goodyear, minister of state for science and technology, told an Ottawa business audience.

“The government is assessing the panel’s recommendations within the broader context of its economic agenda and other priorities and is preparing to act on certain elements of the panel’s advice,” he said.

A spokeswoman for Goodyear would not comment on whether an announcement would come in the March 29 budget, but said Ottawa would act “well before the end of the year.”

With the global financial crisis long past and signs that the external risks to Canada’s economy are fading, Harper is turning his attention to what he calls “major transformations” that the economy needs to remain competitive in the long term.

Economists have long lamented Canada’s poor record on innovation, which makes its economy less productive than that of the United States. The World Economic Forum last year removed Canada from its list of the top 10 most competitive economies, citing low private-sector R&D.

The expert panel’s report, also known as the Jenkins report after its chair Tom Jenkins, made six broad recommendations to streamline a bewildering array of programs and produce more marketable business products from R&D funds:

- Create a new, centralized funding agency that becomes the platform for all federal business innovation programs.

- Decrease spending through a flagship R&D tax credit for small businesses in favor of direct support to help these companies grow faster and become more competitive.

- Link government procurement deals to business innovation.

- Transform existing science and technology research institutes into large-scale centers where business, universities and provincial governments collaborate.

- Give the Business Development Bank of Canada a bigger role in funding high-tech startups as well as in developing venture capital and growth equity funds that would specialize in deals worth C$10 million or more.

- Identify a lead federal minister responsible for innovation agenda, with help from an external advisory group and who engages in dialogue with business and provinces.

Harper said in January the dismal results of the existing R&D system is a “significant problem” that he plans to fix.

In another sign of the value he places on this issue, Harper told Reuters last month he wanted to see RIM grow as “as a Canadian company” and singled out hostile takeovers and bids for what he described as “critical technology” companies as ones the government might block.

Reporting By Louise Egan; Editing by Janet Guttsman

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