Canada's California dreamin' as innovation partnership initiative gains momentum

Formidable hurdles remain

Progress on a unique, multi-faceted R&D initiative between Canada and the State of California has captured the attention of political and bureaucratic leaders in Ottawa and Sacramento and has the potential to vault Canada into the top ranks of research in several areas. Spurred by the early success of a high-speed broadband link between the two jurisdictions, planning for the Canada-California Strategic Partnership Initiative (CCSIP) is moving into high gear with the prospect of initial projects getting underway next year.

Several proposals are being simultaneously developed by bilateral working groups on initiatives in nanotechnology, stem cell research, infectious diseases, sustainable energy and transportation, venture capital and an intellectual property protocol, and highly qualified personnel. The long-term objective is to advance the Canadian S&T agenda through a progressive and profitable partnership with Californian researchers and industry.

"Everybody is picking up on this. California is a powerful innovation engine with great work being done in all sorts of fields," says a Canadian official familiar with the initiative. "In California, there's a very high appreciation for knowledge and discovery and it goes right to the top and the governor."

The idea for such a wide ranging bilateral initiative had its genesis in a meeting with National Science Advisor Dr Arthur Carty and Dr Robert Dynes, a Canadian ex-pat and president of the Univ of California. U of C is arguably the largest publicly funded university on the planet, with 10 campuses around the state, each with student populations equal to that of the Univ of British Columbia (UBC). After floating the concept, Carty found an appetite for collaboration that went beyond the U of C to include the complete state.

The result has been two high-level summits held this past January and June in Los Angeles and Vancouver respectively. At the Los Angeles summit, Dynes summarized the post-911 era of R,D&D (research, development and delivery) and CCSIP's linkage to the 2005 Security and Prosperity Partnership of North America between the US, Canada and Mexico.

"Canada and California have solid relationships, including $28 billion in bilateral trade," said Dynes. "We have complementary strengths. And we have common concerns in areas like public health, energy and transportation. The time has come to build a framework for strategic international and inter-sector collaboration. That will establish us as global leaders in this era of R, D &D."

Overseeing the Canadian component of the initiative in its early stages are Dr John Hepburn, UBC's VP research, and Dr Denis Thérien, VP research at McGill Univ. On the California side are Dr Gretchen Kalonji, the U of C's director of international strategy development and Dr Roberto Peccei, U of C's vice- chancellor. Hepburn, Clarion and Kalonji were in Ottawa earlier this month for a series of meetings with government officials including Iain Stewart and Carmen Charette at Industry Canada and Marie-Lucie Morin, DM International Trade.

Of all the states in the union, California is by far the biggest technology centre, home to many areas of world-class research and the globally renowned Silicon Valley. Many have cited its successful innovation system that has produced numerous technological and commercial breakthroughs.

"California is unique. There's no other place in the US like it," says Hepburn. "CCSIP is a way to both connect university researchers and the innovation system between California and Canada. At its heart, it's the connection between the university research communities. The main pillar is research excellence."

To that end, CCSIP's steering committee is in discussions with high- and middle-ranking members of the Ottawa bureaucracy and is soliciting the support of university presidents from coast to coast. Among those engaged are McGill Univ president, Dr Heather Monroe-Blum, Univ of Alberta president Dr Indira Samarasekera and UBC president Stephen Toope. Canada's California representatives are also actively involved, including Marc LePage, consul general for San Francisco/Silicon Valley and Alain Dudoit, consul general for Los Angeles.

On the California side, U of C's Byrne and Kalonji are the primary drivers, along with Peccei. They have been lobbying the state government to lend its support, which recently received a boost with a October 2nd meeting between Michael Wilson, Canada's ambassador to the US and California governor Arnold Schwarzenegger. The CCSIP was an item on the agenda. According to an informed source, Schwarzenegger welcomed the CCSIP initiative, adding that it had the potential to unleash the innovative capacity of both jurisdictions and offered his willingness to help steer the process.

TACKLING IP ISSUES

The realization of CCSIP is not without formidable hurdles. To attract the participation of industry, there must be outcomes that industry can collaborate on and run with. IP regimes and regulatory differences between the two jurisdictions must also be dovetailed, with the working group on venture capital and IP exploring the potential of removing barriers through the creation of a basic IP protocol. Such an agreement would help to harmonize divergent treatment of IP and attract VC to projects at an earlier stage, but would require the participation of Finance Canada, Industry Canada and International Trade Canada.

CCSIP's cross-border venture capital working group says existing Canadian tax law and the diversity of IP licensing practices at Canadian universities represent obstacles to effective cross-border IP licensing and private equity investment.

"In the absence of action by the (Canadian) government ... the very real risk is a material drain of best-in-class Canadian innovation to the well-established California commercial ecosystem," states the working group.

The working group asserts that CCSIP "is breaking new ground at the earliest stage of the commercialization continuum." It recommends selecting one of two options for dealing with joint IP — assigning the IP to a new corporation such as Aggregate Therapeutics, a company established to deal collectively with stem cell research emanating from Canadian institutions; or acquisition or in-licensing of IP subject to a similar agreement on its rights and obligations.

STEM CELL COLLABORATION

There are other areas of collaboration where the two sides are not equally advanced, or lack specific instruments for action. For stem cell research, Canada is developing a unique business model — Aggregate Therapeutics (R$, July 28/06). The concept of bundling stem cell IP under a common protocol has attracted considerable interest in California, where a $3-billion bond offering for use in stem cell research is working its way through the system. Genome Canada and the Canada Foundation for Innovation (CFI)are reportedly in discussions with the California Institute of Regenerative Medicine.

Funding of bilateral projects poses a considerable challenge for Canada's participation in CCSIP. For California, initial projects can be funded with U of C's internal resources. For Canadian researchers spread across the country in various institutions, it's being suggested that their contribution to project funding be a combination of university and government support. Another possibility is to use the Networks of Centres of Excellence (NCE) program acting as a conduit. The NCE is currently in the middle of a $7-million International Partnership Initiative (IPI) competition to "internationalize" the NCE networks. While modest in scope, the linkages created through the competition could prove ideal for pursuing CCSIP projects. Decisions are due in late November.

But one official familiar with CCSIP says funding for Canadian participation is now as big an issue as scientific excellence and well conceived projects.

"It's harder to find a great compelling idea than find money," says the official. "We're at the stage of articulating great ideas."

CANARIE-CENIC

The challenge of obtaining the necessary buy-ins for CCSIP were considerably improved with the early completion of a broadband networking link between CANARIE CAnet 4 and the Corporation for Education Network Initiatives in California (CENIC). Completed in just five months, the novel infrastructure and optical connections can deliver up to 10 gigabits/sec to an individual researcher, offering almost unlimited bandwidth and providing an integral platform to accommodate CCSIP projects as they come on stream.

As a result of the CANARIE-CENIC linkage, the U of C has offered Canada an opportunity to participate in its bid for a US$200-million, National Science Foundation funded petascale computing project. Such a distributed facility could link into the Canadian high-performance computing project, which is currently being considered for funding approval by the CFI.

The CANARIE-CENIC linkage has already been successfully tested between the Communications Research Centre in Ottawa and the U of C San Diego (UCSD) division of the California Institute for Telecommunications and Information Technology. Other applications in discussion would link the Montreal Neurological Institute to UCSD's National Center for Microscopy and Imaging Research. Projects involving Ryerson Univ and the Univ of Calgary's HP Labs data centre are also in play.

NEXT STEPS

In the months ahead, there are plans to establish a so-called bilateral Blue Ribbon committee to sell the CCSIP vision to researchers, entrepreneurs and investors. Attempts will also be made to heighten political interest by emphasizing CCSIP's potential contribution to the tri-lateral Security and Prosperity Partnership.

In parallel, the working groups are tasked with developing effective, sustainable R,D&D projects to facilitate the formation of actual partnerships.

In the coming weeks, U of C president will make another visit to Canada to hold high-level discussions. Tentative plans are also is the works for Schwarzenegger to visit Canada, pending his performance in the upcoming mid-term elections.

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