The global competitiveness challenge that Canada faces was the highlight of yet another newspaper article (http://bit.ly/1cQRDuZ). In 2007 “Mobilizing Science and Technology to Canada’s Advantage” (http://bit.ly/OniZTv), was to make Canada “a world leader in science and technology and a key source of entrepreneurial innovation and creativity.” Yet we are still falling behind even with significant investments in research targeted to address this challenge. Much of the data suggests a lack of meaningful investment in innovation by Canadian businesses and therefore a lack of innovation by business in general. Much of this may be due to the conservative business models taken by Canadian businesses since the 2009 market correction and resulting weak global recovery. Canada’s natural resource industry has been particularly affected by this weak recovery, and the need to protect profit margins and shareholder value in a capitol intensive sector. The result is a lack of investment in R&D and innovation and a widening innovation gap.
So why is this not working?
At CMIC, our experience has found four major roadblocks to increasing investments by the Canadian mining sector.
a) Although the operating definition of innovation is established, the implementation of research, development and innovation (RDI) programming in Canada focuses on the research aspects almost exclusively. Many believe and vigorously defend the notion that research is innovation. The fact that the great majority of funding in Canada for RDI is targeted at research in academia is a testament to this reality. Research may lead to innovation and can play an active part in the innovation continuum. However it is not innovation unless new knowledge is translated into commercial value.
b) The research system as it currently operates in Canada creates push versus pull approaches to addressing natural resource business challenges. In these scenarios, academics and research laboratories typically try to “sell” or market their own ideas, research projects, solutions or even products without, in many cases, fundamentally understanding both current and long-term challenges faced by Canada’s resource sectors. In Canada’s exploration and mining sector, the push versus pull approach therefore generates transactional relationships versus real partnerships. The formation of transactional versus real partnerships is not limited to the natural resources sector and is a fundamental challenge with Canada’s innovation strategy in general.
c) Despite the presence of both federal and provincial agencies dedicated to encouraging RDI partnerships there is still a lack of strong and continuous commitment to the innovation agenda by Canada’s mining sector. This is partly a result of the sector’s strong cyclical nature, and the tax advantages towards supporting largely unmitigated risk in mineral exploration rather than towards finding more effective and efficient methods to discover, extract and process minerals and move towards a minimal and harmless waste product. Strategic federal and provincial support of such sectors as the aeronautics and forest product industries has returned large dividends for both Canada’s economy and the industry’s shareholders.
d) There is no national coordinating body that can effectively network, focus and increase the Canadian mining sector’s RDI presently carried out and supported by a myriad of academic, government and industry entities. The Funding Portal, a for profit business created to help catalogue, identify and navigate the funding system in Canada, has identified approximately 4,500 different sources of RDI funding totaling $28 billion. This results in the diluted impact of government and industry RDI funding, which has translated into Canada’s loss of competitive edge in the global exploration and mining industry. This efficient use of taxpayer’s dollars further creates a poor return on government and industry investment. This is reflected in the Conference Board of Canada rating this country 13th out of 15 countries in its Innovation Index.
How does CMIC address these challenges
The answer to this is very simple; we use a pull versus push approach and employ massive collaboration in an open innovation practice to solve the greatest challenges of the industry in;
- Underground mining
CMIC’s role is to instigate, facilitate and coordinate the development and adoption of innovation across the industry.
We offer a significant degree of leverage on RDI investments, as much as 50:1, demonstrating to the Canadian mining industry that collaborative investment in RDI results in creating shareholder value. This is accomplished by increased discovery rates, reduced OPEX, increases in energy efficiency, increased productivity and reduced risk of RDI investments and technology adoption.
It is becoming more widely recognized by industry that open innovation initiatives give a better return on the dollar than closed, proprietary approaches. The result is more nimble companies that can compete more effectively in the global market.
The other role of CMIC is to smooth the cyclic nature of RDI mineral industry financing, which allows continual and well leveraged industry investment to place companies ahead of the competition curve when increased investment becomes available on the cycles upswings. This encourages change from the 100% short-term focus on immediate shareholder value to a diversified “portfolio” that recognizes the need for strategic RDI investment for continued financial growth.
CMIC is the model for closing the innovation gap in the Canadian mining industry.