BACKGROUNDER
June 2, 2006
IDEAS TO MARKET STRATEGY
Through its Ideas to Market strategy, the McGuinty government is helping innovative companies develop cutting-edge technologies that will strengthen Ontario's economic advantage and provide high-value jobs for the future.
The government recognizes that fostering a culture of innovation requires not only investment in research and knowledge, but also investment in the transformation of this research and knowledge into products and services that improve people's lives.
The McGuinty government's $160-million Ideas to Market strategy ― announced in the 2006 Budget ― will help companies turn research and ideas into new products and services for the marketplace.
The Ideas to Market strategy is comprised of three initiatives:
- $24 million will be invested over four years to help companies develop promising new technologies by supporting them at the pilot or demonstration project stage. The Innovation Demonstration Fund focuses on new bio-based (made from biological or renewable materials), environmental and alternative energy technologies .
- $46 million will be invested over four years to help early-stage companies become more investor-ready and move breakthrough ideas and technologies further along the commercialization process (from the lab to the marketplace)
- $90 million will be invested in early-stage, innovative companies in partnership with venture capital funds, pension funds and the federal government.
Why an Ideas to Market strategy is needed
The growth of innovative companies is integral to Ontario's economy. But, investment in the early stages of high-potential, early-stage companies has almost disappeared in Ontario. This is the conclusion of an Ontario government Risk Capital Working Group, various risk capital reports and several other reports on commercialization. 1
In addition, a 2004 study by MacDonald and Associates concluded that Canada and Ontario lack the ability to mobilize the private sector capital needed to help early-stage companies get their innovative ideas to the marketplace. 2
The Ministry of Research and Innovation struck the expert Risk Capital Working Group to help identify problems and propose solutions to what was preventing Ontario innovations from being developed, nurtured and brought to market in Ontario. The working group identified two gaps: a lack of investment money and a lack of skilled and knowledgeable people (managers and entrepreneurs).
The lack of initial financial support and entrepreneurial assistance for these innovative early-stage companies is preventing the growth of high-skilled, high-paying jobs in Ontario. Early investment helps promising Ontario companies attract later stage investment. This enables innovative "born in Ontario" companies to remain here, create jobs and compete in the global marketplace.
Other jurisdictions, particularly in the United States, are investing in the early stages of high-potential, technology companies. This emphasizes the need for Ontario to help its best and brightest innovators compete in the global marketplace.
Programs under the Ideas to Market strategy will help bridge this gap in the early stages of a technology's evolution from the lab to the marketplace.
1 People and Excellence: The Heart of Successful Commercialization - Final Report of the Expert Panel on Commercialization, Industry Canada, April 2006; Annual Innovation Report 2003: Trading in the Global Ideas Market, Report by The Conference Board of Canada, November 2003; Picking a Path to Prosperity: A Strategy for Global Best Commerce, Leaders Roundtable on Commercialization — Conference Board of Canada, April 2006.
2 Finding the Key: Canadian Institutional Investors and Private Equity, MacDonald and Associates, June 2004
