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Flaherty Seeking Inspiration From Israel to Revamp the SR&ED Program

Flaherty Seeking Inspiration From Israel to Revamp the SR&ED Program
on February 6, 2012
Flaherty Seeking Insipiration from Israel

Flaherty Seeking Insipiration from Israel

In order to address the widely reported lack of R&D commercialization in Canada, our finance minister, Jim Flaherty, met with officials overseeing the Israeli R&D policies. Israel’s R&D government funding model is widely admired and hugely successful. Over the past few years this government funding model propelled Israel to the number one spot in the world for the highest number of startups per capita.

“They’ve certainly had remarkable success and there are aspects of what has been done in Israel that we need to look at closely and perhaps emulate,” Flaherty told reporters on a conference call.

Israel’s innovation/R&D funding model is heavily weighted towards the direct funding model and utilizes public-private partnerships in government fund creation. This model ensure that the private, for profit, sector is involved (at various stages) to ensure that the political inspiration of the current government don’t cloud sound innovation funding decisions.
Israel’s government fund is also administered by one single office called Israeli Chief Scientist Office (CSO). The CSO operates on the basis of a “neutrality principle”, required by the R&D law, according to which the support must be given to companies with high technological capacity independently to their sectoral classification. This is the same single point structure that the Jenkins report recommended for the future of Canada’s R&D funding program in order to increase government accountability.

The government has not made it clear what changes will be made to the existing $7 billion in government funding for innovation (this includes direct funding such as Industrial Research Assistance Program (IRAP) and indirect funding such as Scientific Research and Experimental Development (SR&ED). However Harper has said that he will consult the Tom Jenkins report submitted to the government last November. The Jenkins report recommended a number of changes specifically related to providing more direct funding such as grants to specific industries and companies. At the same time the Jenkins report recommends major changes to the flagship indirect broad based SR&ED funding program.

So far we know that the government will draw upon the already presented Jenkins report and a number of innovation programs administered by other successful countries in order to spur Canadian innovation. The government hinted that they are looking at the Israel, Sweden, and Finland as models for government innovation.
“We would be less than wise if we did not have a very close look at what they’re doing and choose some of the opportunities here to use in Canada,” Flaherty said.


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