Trade tariffs offer ‘silver lining’ for Manitoba’s innovation ecosystem: Doug McCartney

The man who wrote Manitoba’s innovation strategy has a new job in the private sector. Doug McCartney sees some novel opportunities emerging for the province’s innovation ecosystem – including a ‘silver lining’ in international trade disputes.

McCartney left in July as CEO of Entrepreneurship Manitoba, a “special operating agency” of the province, to become president and CEO of the Composites Innovation Centre (CIC), a not-for-profit corporation based in Winnipeg. CIC supports and stimulates economic growth through innovative research, development and the application of composite materials and technologies for manufacturing industries.

“The CIC is really a catalyst,” McCartney says. “It has the ability to work directly with industries and encourage them to embrace innovation, and help them develop those types of products that can be adopted by industry.” The centre, he adds, also plays an important role in demonstrating to a broad audience the value of composite materials, including their environmental and economic advantages.

McCartney tells RE$EARCH MONEY that he sees a “potential positive” for Manitoba’s innovation ecosystem if international trade tariff disputes aren’t resolved, given the impact on traditional natural resources industries and their steel, aluminum, wood and agricultural products. Despite the downside of such tariffs, they open the door to “taking low value-added commodities and increasing their value through the development of more innovative, home-grown products that can be used in more mainstream applications,” he says. The CIC can be the catalyst in helping industry design, test and prototype those new products, he adds.

For example, the CIC’s FibreCITY initiative is currently working with Buhler Industries, an agricultural equipment manufacturer headquartered in Winnipeg, to develop tractor body panels made from Manitoba-grown hemp and agave plant residues. This value-added agricultural product would be strong, lightweight and environmentally friendly, and use a feedstock from Manitoba “that would have very low value otherwise,” McCartney says.

Several countries are much more aggressive than Canada in exploring the use of non-traditional materials in traditional applications, he notes. “It’s incumbent on us to follow suit if we want to remain competitive, given how strong our manufacturing sector is to not only our provincial economy but to the Canadian economy.” By utilizing Manitoba’s natural resources to produce non-traditional materials, “ultimately we’re going to advance the overall innovation agenda.”

Many of the emerging opportunities McCartney sees for Manitoba’s innovation ecosystem align with areas that the federal government is focused on. They include clean technologies, where the use of composite materials “holds large potential.” Composites also have applications in medical devices, such as orthotics and prosthetics, says McCartney, who was a medical researcher prior to working for government. He also sees new research and innovation opportunities in the environmental arena, including the impacts of climate change in the province’s northern region and the economic potential around Arctic research.

Has The Manitoba Innovation Strategy made a difference?

“Over the past decade, Doug McCartney has been a champion of promoting innovation in the province of Manitoba and encouraging people to think about how innovation can be applied to grow our economy,” says Marshall Ring, CEO of Manitoba Technology Accelerator.

The Manitoba Innovation Strategy, which McCartney wrote while serving as senior executive director of Science, Innovation and Business Development in the previous NDP government of Greg Selinger, was released in April 2014. The eight-page document “really represented a framework, more so than a very defined strategy,” McCartney says. The province’s innovation ecosystem had been struggling with duplication and competition for resources, he says, adding: “I think the strategy has brought clarity with respect to the roles that the various stakeholders within that innovation ecosystem are playing, and the contributions they’re making.”

The strategy also was intended to ensure that entrepreneurs wanting to move an idea through the pathway to market “saw government through a ‘no-wrong-door’ lens,” and could easily access the coordinated support and services they needed, McCartney adds. This is the approach used by the federal government’s innovation strategy and other provinces, “to really speak to the types of economic outcomes they want to see through the monies that they’re investing.”

The No. 1 priority in The Manitoba Innovation Strategy was to bring major, provincial research-funding programs together under one umbrella, overseen by a central advisory body. “The feeling was that our ability to leverage those dollars in terms of additional funding was probably better oriented through a group of individuals that had more direct involvement within the research,” McCartney says.

The Selinger government quickly established the new Research Manitoba agency in its 2014 budget. Total funding for the agency, however, has declined – from $17 million in 2014-15 to $12 million in Premier Brian Pallister’s Progressive Conservative government’s 2018-19 budget. However, McCartney notes that the recent decrease occurred during the current government’s review – expected to be completed later this year – of public spending, programs and economic plans. “As the province’s intent under its own economic agenda becomes more publicly known, I think we’ll get a better appreciation for how it will use research and innovation within the broader economic context.”

The Manitoba Innovation Strategy recommended improving the province’s Small Business Venture Capital Tax Credit, which in fact was increased to 45% from 30%. The document also recommended streamlining the Commercialization Support for Business program for entrepreneurs and businesses. This program is currently being reviewed by the Pallister government. “I think there have been some notional changes to both programs, resulting in greater uptake by those programs,” McCartney says.

Innovative ideas need “triage”

RE$EARCH MONEY asked McCartney whether there is one big change that’s still needed to further advance Manitoba’s innovation ecosystem. Every organization and company needs an evaluation mechanism to determine, early in their engagement with entrepreneurs, how mature their ideas are from a business standpoint, he says. “At Entrepreneurship Manitoba, we wanted to begin at that early stage and triage those opportunities, so those that have the most potential got moved into the so-called fast lane.”

But isn’t government then picking winners and losers? “At the end of the day, I never defined it as picking winners and losers,” he says. “I defined it as providing better service and support ... with the intent that how you were supporting entrepreneurs was allowing for a greater chance of success downstream.”

McCartney believes that successful research and innovation also means delivering an economic return on both private and public investment to the province’s citizens. “The adage, ‘Fail quickly and fail cheaply,’ really needs to be always top of mind when you’re looking at putting systematic processes in place,” he says. “In my opinion, it’s just good business practice.”

In terms of attracting innovative companies, a plus for Manitoba is that Winnipeg is ranked as No. 1 (ahead of Saskatoon, Edmonton and Calgary), out of four cities from Western Canada and 23 from the US Midwest, when it comes to competitiveness in business location costs, according to the most recent Competitive Alternatives guide produced by KPMG.

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