2012: The Actors of Innovation in the Province of Quebec, Canada

Abstract - The aim of this paper is to map the innovation actors of Quebec, Canada, through an exploratory study based on Etzkowitz’s Triple Helix model. It is sought to identify the role of each actor that favor local development through innovation and cooperation. Qualitative, descriptive and exploratory methods were used to collect data. The content analysis procedure, carried out through the use of the Atlas.ti® software, suggests that the university, the government and the industry work together in favor of innovation. The identification of the Quartier de l’Innovation, of the University Valorization Society and the SR&ED are among the main models of organisations identified that seek the development of the region through innovation and cooperation.

Keywords – Cooperation, innovation, Quebec, regional development, Triple Helix model.

I. INTRODUCTION

In the wake of the financial crisis of 2008 comes a new impulse for innovation and competitiveness, where regions increasingly become relevant actors [1]. Thus, this study aimed to map, through an exploratory study, the actors linked to innovation and local organisations that, through cooperation, promote regional development. The study established a typology of the organisations and their definition, through the use of the Etzkowitz’s Triple Helix model, published in 2008 [2]. The interviews were conducted with the objective to validate and complement the data collection, carried out in the institutions that sought to identify the views of the respondents on the importance of such actors and, their elements connected to innovation and cooperation that promote regional development.

The role of the local actors is what generates the development of a region and enhances the quality of life of a community [3]. The importance of innovation for business growth and the economic development of the regions is solidly conceptualized in the literature, being of common interest for the universities and the governments [4], [5], [6], [7], [8]. Porter (1989) in his book "The Competitive Advantage of Nations", which analyzes why some nations succeed and others fail in international competition, considers that companies only compete in the international market, not the proper countries. That is why it explains that the success of businesses is based on their economic environment, government policies and by support institutions. In that context, innovation has

assumed a key role in all economies of the world, and is considered essential for the growth and development of businesses and nations [12].

A. Regional development

Development is an upward movement of an entire social system, being characterized by endogenous economic and non-economic factors, but also by exogenous elements induced and implemented through policies in a specific system [13]. The idea of development is multidimensional, which involves economic, environmental, cultural, social and political dimensions [14].

Each region has specific characteristics, and collective goods such as economic, social, cultural, political and institutional, which influence its capacity to produce knowledge, learning and innovation. In a regional system, the cognitive dimension of the actors is crucial to their ability to create the processes of development and changes for local development [15].

Successful economic and industrial systems are those whose regional contexts normally provide businesses with the best conditions to grow with quality of life, knowledge, finance, connectivity, talented people and its business dynamics [16].

In a context of cooperation, it is essential that governments focus on regional development in order to foster innovation. The regional development agencies can be connected with companies, governments and universities, acting as hybrid organisations in a triple helix pattern [2], in a context of networking between the actors involved in innovation.

B. The Triple Helix model

Innovation has taken on a wider meaning over the years. More than just to explain the development of new products in firms, innovation also constitutes the creation of new models in institutional spheres that promote the proper conditions for innovation. The Triple Helix model is focused on new productive activities such as “innovation potential” [17].

Such concept has been developed through the analysis of government relations with the university milieu and the industry in different societies, based on the various functions of innovation.

2012: The Actors of Innovation in the Province of Quebec, CanadaG. C. LAIN1, E. C. H. DORION2, C. C. PRODANOV2, F. COALLIER3, P. M. OLEA1

1Department of Administration, University of Caxias do Sul, Caxias do Sul, Brazil 2Minister of Science, Technology and Innovation, The State of Rio Grande do Sul, Porto Alegre, Brazil

3École de Technologie Supérieure, Montréal, Canada ([email protected]; [email protected]; [email protected]; [email protected];

[email protected])

393978-1-4799-5529-9/14/$31.00 ©2014 IEEE

Fig 1. Triple Helix of Etzkowitz

The scheme of the Triple Helix model usually starts

with the university, followed by the industry and the government, entering into a reciprocal relationship with each other, and aiming to improve the performance of all. Many of the initiatives are carried out at a regional scale, where specific industrial clusters, academic development and the presence or lack of government authority directly influence the development of the Triple Helix scheme [2].

Innovation begins to take a new meaning when the circles of the Triple Helix scheme are intertwined, from a position of relative autonomy, to a cooperative relationship with the goal of increasing the performance of one another and their traditional functions (Fig. 1).

In the model of the Triple Helix, the industry and the government interact with greater intensity. Hybrid organisations such as cooperative research centers, strategic alliances and incubators were created from the relationship between the three actors to foster innovation. Innovation increasingly takes shape in the Triple Helix, which is the platform for the creation of new forms of organisations that promote innovation, such as incubators, technology parks, and venture capital [2] organisations.

The Triple Helix theory argues that university-industry-government interactions are key to improve the conditions for innovation in a knowledge-based society. The industry operates in the Triple Helix model as a place of production, the government acts as the guarantor of the stability of contractual relations, and the university as a source of knowledge and technology; generating principle of economies that have their basis on knowledge matters [17].

II. METHODOLOGY The method used in this research is qualitative,

descriptive and exploratory, with a content analysis scheme, as [18], and the use of the Atlas.ti ® version 2007 software, for the categorization of the results. The descriptive analysis describes the behaviour of the phenomena and the exploratory search goes beyond the description of the characteristics, analyzing and explaining why or how the facts are happening [19].

Content analysis is established by describing, understanding and interpreting, evaluating materials, texts or discourses, and making a theoretical contribution of a study. It is also characterized by including beyond the explicit, implicit, the unsaid, and the implied [20].

To perform the phase of interviews, actors linked to each Helix were selected and 19 interviews were considered valid. The analysis was performed according to the content analysis theory [18]. The categorization was divided into large families of categories, based on the Triple Helix model [2], where each organisation would fit in the proposed model: university, industry, government or hybrid organisation.

III. RESULTS

The Province of Quebec has a very peculiar system of support to innovation, creating new technologies and start-ups. The government demonstrates its concern at all stages of the development of the innovation chain and available resources. Without any specific development, research results cannot be useful and the resources invested are likely to remain unproductive for any economy and society. In a Research and Development (R&D) process, the first steps are considered riskier and more difficult. They mainly involve maturation and initiation (pre-start-up) work and are considered as confidential and uncertain. This is where an integration of the Triple Helix model becomes essential.

Another reason that justifies government intervention is the lack of initial cash flow in technological start-ups. In such cases, only the investment from the founders, parents, friends, and in some situations angel investors constitutes the initial capital. Upon the government to ensure that the outcome of each research with high potential to successfully completes all the phases of the development chain.

One major findings of this research is the identification of an innovation ecosystem called “Quartier de l’Innovation”, born from a provincial government program mixed with a hybrid organisation called “Sociétés de Valorisation des Résultas de la Recherche Universitaire du Québec” (SVUs).

A. Quartier de L’Innovation

An innovation ecosystem consists of economic agents and their economic relations, as well as non-economic areas such as technology, institutions, culture and sociological interactions. Non-economic components or the structure of innovation may enable the creation of innovative ideas and their diffusion. A highly developed innovation ecosystem helps participants to operate across borders, enabling the transformation of knowledge into innovation [21].

Stanford University defines the concept of innovation ecosystem as an inter-organizational political, economic, environmental and technological system, by means of a

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social conducive environment, and where business growth is catalyzed and sustained with the necessary support. The innovation ecosystem value is recreated through events, impacts and coalitions/networks that arise from a common vision of the desired transformations [22].

One of the main models of fostering innovation was identified at “Le Quartier de L'Innovation” (QI), which stands out for being a conventional research park, located in the heart of Montreal, Quebec (Canada). The goal is to be a creative and dynamic platform, dedicated to the needs of the innovation actors in Montreal. The QI is an ecosystem model in response to new realities resulting from the challenges of innovation worldwide [23].

The concept of QI was initiated in 2009 with the leadership of the “École de Technologie Supérieure” (ÉTS), and in 2010, the provincial government of Quebec recognized its potential. In 2011, ÉTS entered into a partnership with McGill University to complement their capabilities in research, education, innovation and entrepreneurship. The QI seeks to create an inspiring physical space for new ideas, with a hosting role in knowledge transmission, linked with tailored services for entrepreneurs, teachers, students, researchers; creating specific industrial partners and residents of Greater Montreal services for the benefit of the community. The QI is a partnership between the ÉTS, McGill University, the Government of Canada, the provincial Government of Quebec and the City of Montreal [24].

According to the creators of the QI, the study of city models across the world shows that creative regional development and the presence of companies and institutions based on knowledge are not enough to create a real and integrated ecosystem into the context of urban innovation. Driven by a large international benchmarking (especially cities such as Barcelona, Boston, Toronto and Helsinki) strategy, QI aims to integrate the four areas considered essential for a creative society, which includes the industry, training and innovation, and an urban socio-culture. The creators believe that it is through the integration and the interconnection between the three helixes that the development of this worldwide innovative ecosystem occurs in Montreal [23].

As shown in Fig. 2, the QI is not a conventional industrial research park. The QI constitutes a creative platform dedicated to meet the needs of the innovation ecosystem of Montreal, while seeking to attract new players to the site. The QI seeks to be more than just a place for meetings, information exchange and networking. In a perimeter of 1.2 km², the QI encompasses segments essential to creative society, such as the industries, the education and the innovation sectors, with the objective to generate an urban mix of a technological and cultural society. The interconnections between the various segments will create and develop an innovative spirit in QI [24].

Fig. 2. Quartier de L’Innovation

According to the creators of the QI, it is currently an

era of "contact with innovation" and exchange of ideas, which are often based on increased and specialized networks. The actual purpose of the universities is more to integrate collaborative platforms that can provide a new dynamic of convergence between the academy and industry, to create and support knowledge and creative entrepreneurs. The new knowledge economy seeks new ways to do the old things, both with structural and administrative adjustments [24].

To become possible, the QI must commit the various actors (scientific, artistic, social, cultural and business) of economic development and the proper residents of the neighborhood, in search of mutual complicity. The creators argue that these actors will share knowledge and contacts in order to improve their competitiveness and attract the brilliant minds of such active environment, necessary for growth of the region [23]. B. The provincial Government of Quebec

The Quebec provincial Ministry of Economic Development, Innovation and Exportation’s (MDEIE) mission is to support economic development, innovation and export trade, as well as research; particularly by encouraging coordinated actions between the various participants of economic, scientific, social and cultural areas; in order to promote job creation, economic prosperity, scientific development and sustainable development of a region [25].

The Scientific Research and Experimental Development (SR&ED) program is a federal and provincial tax support program that enhances Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada. This incentive seeks to create new products and processes, improved or technologically advanced. The SR&ED program is the largest source of government support for industrial R&D. The program offers tax credits intended for investment, such as wages, materials, machinery, equipment, some overhead and SR&ED contracts.

A Canadian company may receive a tax credit of 35% for qualified expenses, up to 20% of the amounts that exceed the federal level, and up to 35% in Quebec provincial tax credit.

In a report published by the MDEIE in June 2012, called “La Stratégie Québécoise de la Recherche et de l'Innovation” (SQRI), the government has established its main innovation actors and their goals. Among the programs are the Research Fund of Quebec (FRQ), which

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consists of three specific research funds, whose mission is to promote and financially support research, the dissemination of knowledge and the training of researchers in Quebec. The Government is also investing in specific programs like the “Programme Génome Québec”, renowned as a reference center for genomics in Québec and its performance as a research center focused on innovation. Also, the “NanoQuébec” program has the mission to support innovation in nanotechnology, in order to enhance sustainable economic development in Quebec [25].

The University Centers for Technology Transfer (CCTT) carry out activities of applied research; technical assistance and business information with the aim of contribute to the development and the implementation of technological innovation projects, the implementation of new technologies and their dissemination. The Liaison and Transfer Centers (CLT) establish the connections between universities and companies, aiming to raise proposals for research projects, facilitating strategic alliances and technology transfer which contributes to the training of a skilled workforce [25]. The “Centre de Recherche Industrielle du Québec” (CRIQ) offers to companies two research laboratories located in the cities of Montreal and Quebec City, providing strategic intelligence, experience and services that require excellence in the development of different products with high value added, which meet and exceed the demands of the market. C. Hybrid Organisations

As proposed by [2], the four intersections of the Triple Helix model generate hybrid organisations such as technology transfer centers at universities, companies, research laboratories owned by the government, financial support institutions such as angels’ network and venture capital for businesses based on new technologies.

One type of hybrid organisations in the province of Quebec are the Local Development Centre (CLDC), which have the mandate to promote social and economic development of the communities where they are located. The CLDC provide advice for individuals and communities to foster entrepreneurship and contribute to sustainable, efficient and equitable local development, both social and economic.

Through technical and financial assistance, the role of CLD in the social economy is to leverage the companies located in their area of expertise for the development of the economy and employment. By enhancing entrepreneurship, the CLDs aim to support local businesses. To fulfill their mission in the field of social economy, the CLDs have a budget that can be used to finance these companies.

The “Sociétés de Valorisation des Résultats de la Recherche du Québec Universitaire” (SVUs) were created by the provincial government, together with the private sector, to make possible the creation of teams of professionals that support researchers and evaluate the

commercial potential of the results of research. These societies are exclusively focused on the Quebec universities and use different business models. According to the information obtained, their goal includes companies’ enhancement and development, followed by an improvement of their sales. A new venture never arrives to the level of product sales, while under the control of MSBi Valorisation (MSBiV), which is an early stage investment group that provides capital, manpower and business to help promising technologies. It starts from the idea or an invention from one of a partner institution, it supplies support for the development of a technology and up-scale it, but it does not allow current business to occur, since it is not their mandate.

The Government of Québec considers research consortia as a new type of partnership between universities and companies, where the Government participates by granting financial assistance to implement a new form of transfer mechanism. The CRIAQ is a non-profit organisation financed by the Government of Québec. Its mission is to increase the competitiveness of the aerospace industry, and also increase the collective knowledge base of the industry, through improved education and training for students. The organisation seeks to create an incubator for young talents highly specialized for the aerospace industry. The consortium fosters collaboration between academic researchers and the industry to identify and implement pre-competitive projects that meet the industry requirements. At CRIAQ, companies have access to the expertise of renowned researchers and financial resources to assist in their initial budget for R&D.

The Government of Quebec has a clear support policy for research consortia, which increases the possibilities of success. Thus, the approach suggested by [2] is confirmed in the Quebec context and strategy, including a strong integration between the governments (3 levels), the universities and the industries. The cooperation between these actors in the pursuit of innovation is obvious: the government provides support and financial resources, laboratories; the universities offer researchers, office space and laboratories, and the industry creates new technologies and offer new products to the market, resulting in the development of the region, especially through the generation of jobs and income in the local community.

IV. DISCUSSION The results of this research, out of the 19 interviews,

show a very integrated scheme between the actors, as shown in Fig. 3, which represents the actors of the regional innovation system of the province of Quebec. They are inserted in development stages of innovation, identified by the use of colors, to respect the conceptual model introduced by [2]. For example, the “Sociétés de Valorisation des Résultats de la Recherche du Québec Universitaire” (SVU) is a hybrid organisation (orange


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circle) connected to universities (green circle at the bottom) and to the government (the bottom red circle). The figure also includes some major “systemized” programs, such as the Amorçage program or the SR&ED Tax Credit program. Both programs were studied horizontally, as the stage at which they assist in innovation, from early research to date marketing.

The government helps with a tax return (SR&ED) in the first phase of development, the fundamental research. However, the entrepreneurs need their proper capital or from third parties to start their business and, only after the company is legally incorporated and those employees are working in R&D that it may be entitled to any SR&ED program. At this stage, the presence of universities must be strong, with the work of the researchers who arrive with their researches until the experimentation phase, and disseminating them through scientific articles production. In such cluster model, there are already incorporated companies that seek to meet their research needs in partnership with the government and the universities at a basic research level.

Thus, in the early stages, where the technological entrepreneurs mostly need funds to develop their research, a shortage of financial resources may easily occur, considering that in most cases investors are not willing to take high investment risk. That is why that in this phase, the role of the government, with the availability of resources and university incubators, occupy a role of impact for the creation of new businesses. However, as reported by the incubated companies, access to government resources involves an often slow bureaucratic process. For these reasons, when they have the chance, the incubated entrepreneurs choose to use their own resources.

Fig. 3. Innovation System of the province of Quebec

V. CONCLUSION

The main contribution of this work is the state of integered cooperation that may occur through an ecosystem of innovation, which in the case of the province of Quebec, was developed and coordinated by different organisations created by local communities, in order to foster the development of their region.

The model proposed by [2] constitutes a key tool to understand the dynamics of an ecosystem, such as the one present in the province of Quebec; where the merge of the three helix of the model: university, government, industry and hybrid organisations play a significant role. The industry operates a production platform, the university as a source of knowledge and technology, and the government as a guarantor of stability and of contractual relationships with incentive programs. The hybrid organisations constitute an optimized option for each stakeholder.

The Oslo Manual [10] states that one of the major tasks of the government in this context is to create conditions for companies to make investments for innovative activities. The research demonstrates clearly the presence, in the Quebec provincial government, of many incentive programs for companies to invest in innovation. The SR&ED program is the main financial incentive for innovation. This program reflects what was quoted by [2], which states that the government is the ultimate guarantor and has a direct impact on business and contribution to the development of the regions.

The results also indicate that the Government programs have an impact on individual aspects, only by understanding the specific profile of the incubated companies. However, companies rarely innovate alone, but rather in networks of related actors. Companies need researchers who are often students or recent graduates. The impact of these programs covers the entire society, combining different skills necessary for innovation, facilitating learning and disseminating knowledge, considered as predominant features of a regional innovation system. The results show that the SR&ED program can be considered as the most integrated entity, from the [2] model. The province of Québec represents an interesting example for other economies with regard to the programs developed by the government in order to foster innovation for regional development, through cooperation with universities and industries.

The major contribution of this work was to identify some of the key elements that foster innovation in the province of Quebec: cluster formation with government support, the Quartier de l'Innovation. The research demonstrates a model structure between the organisations that promotes collaborative services to foster innovation. All the organisations have a valued role, considering that it is embedded in a cooperative manner, generating value added for the stakeholders but also for the community that is surrounding the innovation core. The [2] model was effective in exploring the innovation system of the province of Quebec, but still does not serve for measuring


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innovation. Future researches could bring an important contribution to this dimension and to the field of research.

ACKOWLEGMENT The research team thanks the École de Technologie

Supérieure of Montréal and the staff of CENTECH (incubator) for its support in the execution of the interviews.

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2012: The Actors of Innovation in the Province of Quebec, Canada