Western Economic Diversification Canada
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Introduction

Acknowledgement

Western Economic Diversification Canada (the department) would like to thank all of the key informants, case study participants and survey participants who generously gave of their time and knowledge to take part in the Evaluation of the Innovation Activity. Without their participation and their insights, this report would not have been possible. The evaluators would also like to thank Dr. Stephen Murgatroyd for his wise advice and important contribution as an external innovation expert on the steering committee. Finally, the evaluators acknowledge the work done by Strategic Review Group Inc (the consultants)in collecting key informant interview and survey data.

Background

Innovation is one of five activities supporting Western Economic Diversification Canada's strategic outcome of a developed and diversified western Canadian economy. The department's website states that "innovation is the process of transforming knowledge into new products, processes and services which, in turn, generate new economic benefits. For this process to succeed, a complete system must be available that supports the movement of a new idea from initial concept, through research and development, to a ready-for-market product. A highly developed innovation system, or "cluster", is focused on a specific area of strength and includes:

  • Universities, research facilities, industry, government labs, and other "knowledge infrastructure" that develop new technologies and a skilled workforce,
     
  • Early stage venture capital financing to help bring technologies to markets,
     
  • Industry associations and other organizations that link the players in the innovation system,
     
  • Firms capable of developing and adopting new technologies, and that are connected to local and global markets, and
     
  • A business environment that fosters innovation.1

The department's innovation activities strengthen the knowledge-based economy by: 1) fostering both existing resource or manufacturing industries and new/emerging knowledge-driven industries within western Canada; 2) creating linkages among participants in the innovation system; and 3) investing in equipment and infrastructure to support industry and build capacity.

To achieve its innovation objectives, the department invests in six sub-activity areas:

1) Technology adoption and commercialization: promoting technology adoption and commercialization in the marketplace;
2) Technology linkages: increasing connections among innovation system members;
3) Technology research and development: developing new technologies with commercial potential;
4) Community innovation: increasing technological capacity in communities;
5) Technology skills development: increasing the number of highly qualified workers through training; and
6) Knowledge infrastructure: increasing the physical assets and capacity of a cluster.

Innovation Programming

The department's innovation activities were funded under the Western Diversification Program (WDP) or under one of the sub-components of the WDP. Eligible recipients for departmental innovation funding are not-for-profit organizations. The department's set of innovation funding vehicles are described below.

Western Diversification Program2 is the main program through which the department invests in initiatives that enhance and strengthen the economy of western Canada. The program supports innovation by funding the department's activities to strengthen the western Canadian innovation system. As an umbrella program authority, it contains a number of sub-components that fund innovation projects.

Urban Aboriginal Strategy, a sub-component under the WDP authority, promotes independence and opportunities for Aboriginal people living in urban areas. The strategy supported innovation by funding the department's activities to promote entrepreneurship and innovation among Aboriginal people living in urban centres.

Intervac, a sub-component under the WDP authority, funded the construction of a facility (InterVac) located at the University of Saskatchewan. InterVac will be the first facility in North America to focus on pathogens affecting both animals and humans. This initiative supports innovation by funding the department's research and technology development activities and advances the federal interest in vaccine research.

Winnipeg Partnership Agreement, a sub-component under the WDP authority, was a five-year urban development agreement between the governments of Canada, Manitoba, and the City of Winnipeg. The agreement supported innovation by funding the department's activities aimed at building Winnipeg's knowledge-based economy and strengthening its innovation capacity.

Western Economic Partnership Agreements, a sub-component under the WDP authority, are designed to address joint federal-provincial priorities and respond to regional needs that are consistent with national economic priorities. The agreements support innovation by funding the department's activities focused on introducing new products, technologies and services to consumers.

Rick Hansen Foundation, a sub-component under the WDP authority, advances knowledge and research aimed at improving the lives of people with spinal cord injuries. This investment supports innovation by funding research in health related life sciences and technologies.

Throughout the remainder of this document, the set of innovation funding programs and sub-components will be referred as innovation programming. The department spent $70.1 million on innovation programming in 2007-08. The department's most recent Departmental Performance Report (2010-11) indicated that: 1) spending on innovation decreased from $86.9 million (2009-10) to $77.1 million (2010-11); and 2) the department provided $86.8 million to 43 innovation projects that then leveraged $209.8 million from other sources ($2.46 for each departmental dollar spent).

Western Diversification Program Terms and Conditions

Funding, in the form of a contribution or a grant, may be allocated on a payable or non-payable basis. Grants may be used when the assessment demonstrates a low risk project where monitoring is not required through the life of the project, due to the strength of the recipient, and the confidence in the use and value of the required funding. Projects requiring ongoing monitoring of progress and use of funds will be funded as contributions. Contributions can be made to several organizations, including non-profit organizations, educational institutions, and other government departments (federal, provincial, and municipal). A wide range of costs can be covered by the funding, including operational costs, equipment acquisition, and personnel costs.

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Logic Model

Evaluators consulted with innovation programming managers to develop the following logic model.

Innovation Logic Model
Sub-activity
  1. PAA Program Sub-Activity: Knowledge Infrastructure
  2. PAA Program Sub-Activity: Technology Research and Development
  3. PAA Program Sub-Activity: Technology Skills Development
  4. PAA Program Sub-Activity: Technology Adoption and Commercialization
  5. PAA Program Sub-Activity: Community Innovation
  6. PAA Program Sub-Activity: Technology Linkages
Department Inputs
  • Work directly with other organizations to encourage and facilitate the development of projects and initiatives
  • Provide financial support for projects and initiatives that strengthen innovation
Immediate Outcomes
  1. Increase in physical assets for research and development or training.
  2. Applied R&D leading to technologies with commercialization potential.
  3. Increase in training, education and skills building of highly qualified people (HQP).
  4. An increase in the number of technologies developed in research institutions that have commercialization potential and an increase in technologies adopted by existing firms.
  5. Increased technological capacity in a community.
  6. Increased connections and synergies among innovation system members.
Intermediate Outcomes for Innovation Sub-activities
  • A strengthened innovation system in Western Canada
  • Increased technology development, adoption and commercialization
  • Further development of technology clusters
  • People complete and incorporate training
  • Research is shared and used
  • Western firms innovate to create wealth
Final Outcomes
  • Stronger knowledge-based economy
  • Development and diversification of the western Canadian economy

Evaluation Context

Using the existing WDP authority, the department’s innovation programming will be evaluated based on the Performance Measurement Framework of the WDP. The evaluation focused on the degree to which projects achieved their intended objectives and contributed to the development and diversification of the western Canadian economy. This evaluation addressed the relevance and performance of the department’s innovation programming. The evaluation covered the fiscal years 2007-08 to 2011-12. The evaluation results will contribute to program renewal and continuous improvement.

Although this is the first evaluation at the innovation activity level, an evaluation of the Western Diversification Program was completed in 2008. As an umbrella program authority, The Western Diversification Program funds all four activities outlined in the department’s Program Activity Architecture. It became apparent during the 2008 evaluation that the broad focus of the Western Diversification Program made it unwieldly to evaluate as a whole and that a better approach for this evaluation would be to narrow the focus to the innovation activity and follow up with evaluations of the other activities in subsequent years.

Evaluation Scope and Objectives

The evaluation of the Innovation activity was scheduled in the department’s evaluation plan (2010-15) and satisfies requirements of the 2009 Treasury Board Policy on Evaluation. This evaluation of the Innovation Activity included various data collection methods outlined below. The objectives of the evaluation and the core evaluation issues are presented in Table 1.1.

Table 1.1 Core Evaluation Issues for the Innovation Activity
Evaluation Issues
Relevance
 
  • Is there a continued need for innovation programming?
  • Is innovation programming aligned to departmental and federal government priorities?
  • Is the innovation programming consistent with federal roles and responsibilities?
Performance
Achievement
of Intended
Outcomes
Strategic Outcome
In what manner and to what extent has the innovation activity developed and diversified the western Canadian economy?

Measuring Success
  • To what extent has each of the six sub-activities achieved their intended immediate and intermediate outcomes
  • To what extent has the innovation activity achieved its intended outcome of strengthening the knowledge-based economy?
  • What factors facilitated or impeded the achievement of the innovation activity?
  • To what extent is performance measurement undertaken for the innovation activity? How useful are the performance measures?
  • To what extent are risk management strategies identified for innovation programming?
  • Is the programming design appropriate for achieving the expected program results?
Unexpected Outcomes
  • Were there unexpected positive and/or negative outcomes from the department's involvement in innovation?
Demonstration
of Efficiency
and Economy
  • Is the innovation programming achieving its intended outcomes in the most economical manner?
  • Is the innovation programming undertaking activities in the most efficient manner?

 


[1] http://www.wd.gc.ca/eng/107.asp, accessed March 15, 2011.

[2] Western Economic Diversification Canada (n.d.) Western Diversification Program. http://www.wd.gc.ca/eng/301.asp.