This major innovation support program for small and medium (SME) businesses,  appears to be on a soon-to-be-gone watch.  In fact, the CRA agency which administers it has been cutting its pay-outs with vigour since 2010. While the new( in 2011) Director General, Susan Betts, has stated that it’s being tightened up, in fact the intent is clearly to reduce the cost of the program and especially target overly ambitious support submissions from which an industry of consultants has taken significant income in the past.  Clearly the notion that 20 -30 % of the payout sums would end up in the hands of the consultants who help companies access the program by preparing the lengthy submissions is a flaw in the use of these funds.

Yet some of the recent recommendations of the Jenkins Report dealing with revising the overall federal approach to innovation support should be of concern. For example, a centralized funding agency to direct the government spending for innovation, essentially picking winners and losers, or worse, being politically influenced is worrisome.

Another recommendation, to link government procurement with supporting innovation, while sounding wholesome, has the potential to have procurement of items in government spending based upon degrees of innovation claimed rather the value for each dollar spent.  Yet the notion of assisting high-growth, innovation firms access risk capital in later stages of early growth where there are gaps now, could be of real benefit.

It’s a difficult path to chose from for the federal government and the Minister for State for Science and Technology, Gary Goodyear has indicted that it will be chosen before 2012 is over.  Let’s trust there will still be some realistic program left for companies responsibly accessing SR & ED now, even if they aren’t the next RIM.

John Bielby