Aerospace Sector Information

SessionSeizing the OpportunityJanuary 2015

Presentation Overview

• Innovation – a Global perspective

• NSERC – the big picture

• Canada’s Aerospace Sector overview

• NSERC industry support

• Defining the opportunity

A process through which economic or social value is extracted from knowledge — through the creation, diffusion, and transformation of ideas — to produce new or improved products, services, or processes.

-- Conference Board of Canada

HERD AS PERCENTAGE OF GDP, TOP OECD COUNTRIES (2009)

CANADA LEADS THE PACK…

5

BERD AS A PERCENTAGE OF GDP, TOP OECD COUNTRIES (2009)

CANADIAN BUSINESSES ARE LAGGARDS IN R&D EXPENDITURES!

6

Source: A comparative analysis of the sciences and innovation profiles of ODEC and selected countries: December 2011

SCIENCE AND INNOVATION PROFILE IN CANADA

7

Federal S&T Structure

PARLIAMENTPARLIAMENT

Prime Minister

Prime Minister

CABINET CABINET Minister of IndustryMinister of Industry

Science, Technology and Innovation

Council

Science, Technology and Innovation

Council

Research Performed in Labs

• National Research Council (NRC) • Science-Based Department and Agencies e.g., Environment Canada, Natural Resources Canada (NRCan), Health Canada

Research Performed in Labs

• National Research Council (NRC) • Science-Based Department and Agencies e.g., Environment Canada, Natural Resources Canada (NRCan), Health Canada

Research Funding• National Research Council’s Industrial Research Assistance Program (IRAP)• Canada Revenue Agency’s Scientific Research and Experimental Development(SR&ED) tax credits

Research Funding• National Research Council’s Industrial Research Assistance Program (IRAP)• Canada Revenue Agency’s Scientific Research and Experimental Development(SR&ED) tax credits

Research Funding

3 Granting Agencies: Natural Sciences and Engineering Research Council (NSERC), Social Sciences & Humanities Research Council (SSHRC), Canadian Institutes for Health Research (CIHR)

Foundations: Canada Foundation For Innovation (CFI), Genome Canada

Post-secondary research inuniversities, colleges and

teaching hospitals

Post-secondary research inuniversities, colleges and

teaching hospitals

IndustryIndustry

Industry CanadaIndustry Canada

Minister of State (S&T)Minister of State (S&T)

Federal Tri-Council Funding Agencies

HealthSocial

Sciences & Humanities

Natural Sciences & Engineering

SSHRC NSERC MRC

Canada’s Granting Councils>20 years ago

NSERC

CIHR

CFI

21st Century Approach

SSHRC

The NSERC Organization

Total national staff ~400o Headquarters in Ottawa: ~379 staffo Regional Offices: 5 offices, 4 staff each (*5 in Ontario)

Pacific

Prairies

OntarioQuebec

Atlantic

NSERC-Ontario:• Promotion• Relationship Development• Follow-up

In a nutshell … $1.1 Billion BudgetNSERC helps make Canada a country of discoverers and innovators for the benefit of all Canadians

PrioritiesPeople:Building our human capital in the natural sciences and engineering

Discovery:Unleashing the creative power of our researchers

Innovation:Connecting & applying the strength of our research capacity to the challenges & needs of industry & society

26.8%

37.3%

31.5%

4.4%

People

Discovery

Innovation

Admin.

NSERC Support Spans the Research Continuum

Strategic Partnerships(Government Priorities)

Business-LedNetworks

Discovery Grantsresearch and training

Industry-Driven programs

Commercialization of Research

RESEARCH & TECHNOLOGY MATURITY

MAR

KET

READ

INES

S

TRAINING IN INDUSTRYTRAINING IN UNIVERSITIES

College and Community Innovation

Program

16

The Canadian Aerospace industry

• Number of companies in the Canadian aerospace industry: 700* companies of all sizes

• The Canadian aerospace industry contributed more than $27B in direct and $42B in indirect revenues to Canada’s economy in 2012, and employed 170,000 FTEs

• Canada’s aerospace manufacturing sector is ranked 5th among OECD countries in terms of revenues and GDP and 1st in terms of relative importance over total manufacturing (2010).

* Firms where aerospace is their primary business activity

Aerospace: a strong export industry (80%)

Aircraft39%

Engines28%

Avionics11%

Landing Gear6%

Flight Simulator4%

Other Parts12%

Product Exports by Segment

54% of exports to USA – 24% Europe – 11% Asia

Canadian aerospace industry size of firms

85%

11%

4%

Company Size

Small (1-99 FTEs)

Medium (100-499 FTEs)

Large (500+ FTEs)

Over the last ten years: sizeable increase in number of medium-sized firms, slight decline in small ones

Tier structure of Canadian aerospace industry

Aerospace across the country

5%

60%

27%

8%

Manufacturing

Atlantic

Quebec

Ontario

Western

11%

21%

22%

46%

MRO*

* Maintenance, Repair and Overhaul

NSERC + NSERC -

Aerospace: one of the most R&D intensive sectors of the Canadian

economy

Aerospace Manufacturing

Total Manufacturing

Total Industries

0 2 4 6 8 10 12 14 16 18 20

R&D Intensity

R&D Intensity on GDP

Large firms responsible for 92% of R&D intensity

NSERC RP Funding & Industry Contributions

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

Aero 2002-12Cash

In-Kind

NSERC

Aerospace Companies & NSERC

Courtesy of CRIAQ…Mostly manufacturing companies

Defining the opportunity

• NSERC currently benefits from strong partnership with CRIAQ able to reach out to several companies in QC

• Strong participation from Ontario and Quebec companies but…

• Partnership initiatives together with CARIC, OAC, OCE provide new access for ON based companies

• Current context is favorable to increased collaborative R&D

OCE Partnership – First Call

Ontario Aerospace R&TD Challenge OCE 1:1 cash + in-kind with 50% cash min. NSERC ROF + CRD

Enabling cross-sector partnerships with industry associations to address sector-wide research and development challenges.

5 Major Research Partnerships (RP) ProgramsUniversities Colleges

Strategic Partnership Program

Industry-Driven Collaborative R&D Program

Commercialization Program

Training in Industry Program

Colleges Community Innovation Program (CCI)

Strategic Project Grants (SPG)

Partnership Workshops (PWP)

Idea to Innovation (I2I) Industrial Undergrad Student Awards (i-USRA)

Applied Research and Development (ARD) Grants

Collaborative Health Research Projects (CHRP)

Interaction Grants (IG)

Centres of Excellence for Commercialization & Research (CECR)

Industrial R&D Internships (IRDI)

Applied Research Tools and Instruments (ARTI) Grants

Auto. Partnership Canada (APC)

Engage Grants (EG)Engage Plus Grants (EPG)

Industrial Postgraduate Scholarships (IPS)

Innovation Enhancement (IE)

Strategic Network Grants (SNG)

Collaborative Research and Development (CRD)

Technology Access Centres (TAC)

Network of Centres of Excellence (NCE)

Industrial Research Chairs (IRC)

College-University Idea to Innovation (CU-I2I)

Business-Lead Network of Centres of Excellence (BL-NCE)

Industrial Research Chairs for Colleges (IRCC)

Project

NSERC

Industry Academia

Grants, scholarships, awards ($)

$, In-kind, background IP, training

HQP, facilit

ies, equipment

expertise

Ideas, advice, future employees

Peer-Review,awards ($)

Future research knowledge

INNOVATION PORTFOLIO:NSERC Research Partnerships Model

Connections to the academicenterprise

Solutions to R&D challengesTraining, advancement of k

nowledge

NSERC Partnership Budget

$335M

Key Evaluation Criteria

1. Applicant 2. Company3. Project

Engage Grant

Engage Grant(EG) (University)

• New relationship• Up to $25k• 6 months• No company cash• Company owns the IP• No application deadline• Fast 4-6 week turnaround

Engage Plus Grant

Engage Plus Grant(EG) (University)

• Continue project and relationship with Engage

• $12.5k company cash + $12.5k award

• 6 months• Company owns the IP• No application deadline• Fast 4-6 week turnaround

Strengthening and Maintaining a Longer Term Collaboration

Collaborative R&D Grant (CRD)

Industry driven R&D project Shared costs: Each $1 cash

and $1 in-kind from company levers up to $2 from NSERC

Flexible* Entire R&D spectrum* Duration 1-5 years* Small to large projects* Apply at any time

Success rate: 85%

“We are definitely ahead of the curve today as a result of this collaborative R&D project… significantly reduced our material costs …placed us in a much stronger position technologically“

John Persic, VP R&D, Microbonds

Applied R&D (ARD) Grant

Applied R&D Grant(ARD) (College)

o Three levels of grants:1. Up to $25K (6 months)

o Requires new relationship, industry partner contribution

o 4-6 week internal review target2. Up to $75K / year, up to 3 years:

o Industry partner(s) contribute 1/3 of project costs

o External peer review3. Over $75K / year, up to 3 years:

o Industry partner(s) contribute ½ of project costs

o External peer review committee

Thank you!

Igniting New Research Partnerships Through Engage Grants

• 445 new collaborations in first year, 88% with SMEs

• 272 companies new to NSERC Partnerships (>10% increase)

• 187 researchers new to Partnerships Programs

• Decisions in 4-6 weeks