1. Aerospace Sector Information Session Seizing the Opportunity January 2015

2. Presentation Overview Innovation – a Global perspective NSERC – the big picture Canada’s Aerospace Sector overview NSERC industry support Defining the opportunity

4.  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

5. HERD AS PERCENTAGE OF GDP, TOP OECD COUNTRIES (2009) C ANADA LEADS THE PACK … 5

6. BERD AS A PERCENTAGE OF GDP, TOP OECD COUNTRIES (2009) C ANADIAN BUSINESSES ARE LAGGARDS IN R&D EXPENDITURES ! 6

7. Source: A comparative analysis of the sciences and innovation profiles of ODEC and selected countries: December 2011 SCIENCE AND INNOVATION PROFILE IN CANADA 7

8. Federal S&T Structure PARLIAMENT Prime Minister Prime Minister CABINET Minister 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 in universities, colleges and teaching hospitals Post-secondary research in universities, colleges and teaching hospitals Industry Industry Canada Minister of State (S&T)

10. Federal Tri-Council Funding Agencies Health Social Sciences & Humanities Natural Sciences & Engineering

11. SSHRCNSERCMRC Canada’s Granting Councils >20 years ago

12. NSERC CIHR CFI 21st Century Approach SSHRC

14. The NSERC Organization Total national staff ~400 oHeadquarters in Ottawa: ~379 staff oRegional Offices: 5 offices, 4 staff each (*5 in Ontario) Pacific Prairies Ontario Quebec Atlantic NSERC-Ontario: Promotion Relationship Development Follow-up

15. In a nutshell … $1.1 Billion Budget NSERC helps make Canada a country of discoverers and innovators for the benefit of all Canadians Priorities People: 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

16. NSERC Support Spans the Research Continuum Strategic Partnerships (Government Priorities) Business-Led Networks Discovery Grants research and training Industry-Driven programs Commercialization of Research RESEARCH & TECHNOLOGY MATURITY MARKET READINESS TRAINING IN INDUSTRY TRAINING IN UNIVERSITIES College and Community Innovation Program 16

17. 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 5 th among OECD countries in terms of revenues and GDP and 1 st in terms of relative importance over total manufacturing (2010). * Firms where aerospace is their primary business activity

18. Aerospace: a strong export industry (80%) 54% of exports to USA – 24% Europe – 11% Asia

19. Canadian aerospace industry size of firms Over the last ten years: sizeable increase in number of medium-sized firms, slight decline in small ones

20. Tier structure of Canadian aerospace industry

21. Aerospace across the country * Maintenance, Repair and Overhaul NSERC +NSERC -

22. Aerospace: one of the most R&D intensive sectors of the Canadian economy Large firms responsible for 92% of R&D intensity

23. NSERC RP Funding & Industry Contributions

24. Aerospace Companies & NSERC Courtesy of CRIAQ …Mostly manufacturing companies

25. 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

26. 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.

27. 5 Major Research Partnerships (RP) Programs UniversitiesColleges 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)

28. Project NSERC Industry Academia Grants, scholarships, awards ($) $, In-kind, background IP, training HQP, facilities, equipment expertise Ideas, advice, future employees Peer- Review, awards ($) Future research knowledge INNOVATION PORTFOLIO: NSERC Research Partnerships Model Connections to the academic enterprise Solutions to R&D challenges Training, advancement of knowledge NSERC Partnership Budget $335M

29. Key Evaluation Criteria 1. Applicant 2. Company 3. Project

30. Engage Grant (EG) (University) New relationshipNew relationship Up to $25kUp to $25k 6 months6 months No company cashNo company cash Company owns the IPCompany owns the IP No application deadlineNo application deadline Fast 4-6 week turnaroundFast 4-6 week turnaround

31. Engage Plus Grant (EG) (University) Continue project and relationship with EngageContinue project and relationship with Engage $12.5k company cash + $12.5k award$12.5k company cash + $12.5k award 6 months6 months Company owns the IPCompany owns the IP No application deadlineNo application deadline Fast 4-6 week turnaroundFast 4-6 week turnaround

32. 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

33. Applied R&D (ARD) Grant Applied R&D Grant (ARD) (College) oThree levels of grants: 1.Up to $25K (6 months) oRequires new relationship, industry partner contribution o4-6 week internal review target 2.Up to $75K / year, up to 3 years: oIndustry partner(s) contribute 1/3 of project costs oExternal peer review 3.Over $75K / year, up to 3 years: oIndustry partner(s) contribute ½ of project costs oExternal peer review committee

34. Thank you! Thank you!

35. 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