IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

In this interview, InspiringBoomers talks to David Lisk of the Industrial Research Assistance Program (IRAP). Developed over 40 years ago, IRAP is funded by Industry Canada and deployed by the National Research Council (NRC). While closely linked to NRC's mandate, when IRAP provides support to firms it is often independent from other NRC Institutes. However, IRAP does encourage firms to work with NRC Institutes when appropriate. In fact, IRAP is a program that provides client tailored advice, linkages, technical data, and funding. These are the four legs of the IRAP program. Canadian entrepreneurs facing technical challenges in their business can benefit through the resources that IRAP has to offer . Better yet, all of the IRAP services are free of charge. Read on!

InspiringBoomers: Can you give InspiringBoomers readers an idea of how the IRAP program helps Canadian entrepreneurs?

David: In the fiscal year ending March 31, 2008, IRAP supported 7,500 firms. Of these, 1,900 firms received contribution funding. The federal government stimulus package has added another $200M into the program over the next two years. In this fiscal year and next, the funding for the IRAP Program is $170M per year. Our review of the wealth created from that investment indicates that IRAP has created 10X to 20X ROI (return on investment). IRAP measures success in terms of increase in employment and increase in revenue for our client firms. We will work with small companies where a $100K contribution could enable the addition

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IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

of 5 new staff and grow from 15 to 20 people. IRAP will work with a lot of smaller firms that would have difficulty securing venture financing. We also work with Venture-backed firms. However, in general, IRAP takes the very scary front-end projects where banks will never go and VC's seldom tread and help get the firm to a point where it can make sales and allow the founders to go to the banks and the VC's for funding. We encourage successful firms with whom we've worked in the past to come back and we will help them to grow again and again. The objective is to help the firm grow and create wealth.

InspiringBoomers: So to be supported by IRAP doesn't necessarily imply funding?

David: That's correct. There are rules around when a firm is eligible to receive funding. However, from IRAP's perspective, even an individual can be supported with advice and linkages, not necessarily funding.

IRAP is located across the country in 100 cities and towns. There are 240 staff members providing outbound reach into the community. Generally speaking, these individuals will have a technical background, often with a PhD, they are generally older and been through several generations of technology, they may have small business experience and they may have entrepreneurial experience from having started their own businesses. Those experienced advisors are called Industry Technology Advisors (ITA's) and they will share their advice and experience, free of charge, with Canadian small & medium businesses.

InspiringBoomers: In what situations should a small / medium business engage IRAP?

David: At any stage in their development. IRAP is truly tailored to the needs of the firm. There is a dialogue between the ITA and the firm. Any company looking to innovate in manufacturing or technology is a potential candidate for the IRAP program.

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IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

Second, they must be incorporated and have under 500 employees to receive financial assistance. However, an entrepreneur or firm will always be able to receive advice, networking, and the CISTI search to better understand their market space - all free of charge. Sometimes a firm isn't yet ready for the IRAP's financial support. We encourage nascent firms to do the legwork to understand their market, their competitors, and their chances of success. Once a firm has some growth and market success, they may be ready for IRAP funding. And it's not just for high tech companies. For example, let's say you have a bakery and bake bread and want to innovate around how your ovens work, or how you mix and create the dough, and you need technical help to innovate. Those types of challenges are potentially supportable with some funding through IRAP. It is innovation, but it's not necessarily high tech! Making business more competitive, allowing them to lower their cost so they can sell at a lower price and perhaps export. Those are all things that are of interest to IRAP.

InspiringBoomers: Once an entrepreneur contacts IRAP, what happens next?

David: The very first step that a small business will go through when it contacts IRAP is essentially an interview. The ITA wants to understand where the business is today, what challenges it has, and what could be done from an IRAP perspective to support the firm to become stronger and more competitive. Of course there will be forms to fill out for the program database.

What IRAP is trying to do is to provide innovation expertise to the firm. Sometimes this is done with a contribution agreement so funding can go into the firm. But more often, it could be that the firm isn't quite ready for funding, perhaps because they don't yet have their marketing plan. More work by the firm is often required up-front. Having an ITA is like having an extra business advisor. The government pays the salary of the ITA, so there is no charge to the entrepreneur.

Specifically, the IRAP program will provide technical advice, linkages to research from universities, national research labs, and other businesses, introductions to other people or firms who could act as enablers (both domestically and internationally). There's full access to the library here at NRC for IRAP. The library has a collection of technological databases that carry patent information, publications, and competitive intelligence information. The firm can, with the

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IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

ITA, fill out a request with the key-words they want to search on. A CISTI search will be performed and the ITA will sit down with the entrepreneur to review the results. The search results can help the firm understand how crowded their area is. The space they're targeting could be completely empty and no-one's ever heard about it, or it could be totally crowded because everyone has decided to jump in! Successful firms understand what's happening in their global market space.

InspiringBoomers: To receive IRAP funding, what process is followed. What kind of criteria is used to decide if a firm warrants funding?

David: IRAP is an innovation support program. The first criterion is that the firm's project proposal must exhibit a direction that indicates potential success along an innovation path that will lead the company to be more competitive. Secondly, we assess if the firm can pay its share of the salary and all non-salary costs? IRAP is a cost sharing program. We do not pay for material, we do not pay for expenses. If the firm has a project that involves some capital outlays and expenses, then they need to demonstrate that they can cover these costs. As the project proposal is being developed, the firm will need to get agreement from the ITA that the funding fits with the IRAP criteria and the agreed-upon direction for the firm. Of course, there are IRAP program forms that need to be filled out. These forms are provided by the ITA and are not available on the NRC website.

IRAP is a contribution agreement funding program which is to say that the program provides funding based on a contract. It is not a grant. The IRAP program will have an agreement on what a project will be, what the costs are likely to be, and the firm is obliged to work towards completing the project that was agreed to. The firm will pay the salaries of the employees and subcontractors after which they will submit a claim to the government. The claim is reviewed, accepted, and then paid out. Only the amount agreed to in the contribution agreement of salary or subcontract costs are covered, UP TO 100% of salaries and UP TO 75% of subcontract costs. This process creates a lag and the firm must be prepared to carry 45 days of costs.

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IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

InspiringBoomers: Is there an average amount of funding that firms are generally awarded?

David: $75K to $125K is the average range per project. However, it varies widely. A manufacturing project innovation could be less, but a semiconductor innovation could be much much more. There is no allocation based on size of the project, it is always first-come first-serve kind of engagement. Funding is always tailored to the project so amounts can vary widely. There are two maximums for contributions. The maximums are $1M / yr per firm and $3M per firm lifetime. A firm can have multiple projects operating at the same time.

InspiringBoomers: Can founders be compensated directly?

David: It depends on the project and the skill set of the founder. Decisions are made on the basis of making the project successful.

InspiringBoomers: Why are the NRC IRAP program funding application forms not available on the NRC website?

David: That's because we don't want firms to waste their time. The firm may not be ready and the NRC IRAP doesn't want to be a burden to small businesses. IRAP looks to have a dialogue between the firm and the ITA. Once the forms are filled out, a business assessment of the firm and a technical assessment of the project take place. The technical assessment will assess (1) if the project will increase the level of innovation within the firm, and (2) is there a technical challenge that the project can help overcome, and (3) if the project is successful, will it move the firm to a stronger position in the marketplace. So there is a tie to the innovation and the ability of the firm to grow.

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IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

The business assessor will determine if the firm can handle its share of the project costs by looking at the firm's business plan and sales channels, understand how this new product or innovation fits into their portfolio, and there's a review of the management team. Recommendations may be made to the firm on changes that should be made to the project proposal. Once the project is deemed "valuable" by the assessors, it will be moved on for approval.

InspiringBoomers: If a business has a good proposal, how long does the process take to secure IRAP funding?

David: If there has been dialogue back-and-forth, and there is agreement on what the project should be, and if it's a relatively small project which is well defined, then from the point where it has been loaded into the system for approval, it can be as short as 6 weeks. At that point the firm will have a contract in hand and can start the work. The maximum is indeterminate because for a very large project the firm may not - for example - have the funds to support their half, and they may have to go and secure the financing. The more time a firm spends working with the lead ITA up-front, and the more they incorporate the feedback they get from the ITA into the proposal, the faster the process goes.

InspiringBoomers: Is there an annual deadline?

David: It's ongoing, there is no deadline. However, there are fiscal constraints based on the st to March 31 st . Projects federal budget. The government's fiscal year runs from April 1 are approved on a first come first served basis. As projects are approved, these funds are drawn down. Decisions to approve funds in the current fiscal year can be made starting on the 1
st

of April. However, you should engage with your ITA early in the cycle. October is a good time to talk to your ITA in order to address any concerns or requirements and be ready to be put your project proposal into the hopper for the coming budget year.

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IRAP with David Lisk

Written by InspiringBoomers Staff Sunday, 19 July 2009 12:40 - Last Updated Tuesday, 10 April 2012 14:32

InspiringBoomers: Would NRC IRAP ever tap into NRC patents?

David: This could be part of the technology research that the CISTI search reveals. The search will identify relevant patents and who holds them. The search could reveal relevant patents that are held by the NRC. The 20 NRC Institutes each have their own business development capability and can license their patents in order to create wealth for Canada. If an NRC patent looked promising, the IRAP ITA would help the firm with the introductions. However, the licensing of NRC patents is handled by the various NRC Institutes directly, and not through IRAP.

InspiringBoomers: How can an entrepreneur contact and engage an ITA from the NRC IRAP Program?

David: The chief method is to call the 1-877-994-4727 number. A local office will receive the call (based on the callers originating number). An ITA will be assigned. This is the cleanest and fastest way to engage an ITA.

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