SWOT for Western Canada’s life sciences cluster

The following section reflects the views of project recipients and key industry informants regarding the strengths, challenges, opportunities, and barriers to growth of the life sciences cluster across Western Canada. Responses to the questions from both groups were similar; consequently, through the remainder of this section project recipients and key industry informants are referred to collectively as respondents.

Respondents saw the current life sciences research effort in Western Canada as world-class, but lacking strategic direction and vision on the part of the cluster and all levels of government. Respondents also saw lack of access to capital, the need to focus on translating research into commercial products and services, and the absence of international awareness as being major barriers to the development of the cluster.

The following are key points taken from the respondents regarding cluster strengths, challenges, opportunities and barriers to growth.

Current strengths

Respondents believed that Western Canada has considerable strengths that provide the foundation for a vibrant and diverse life sciences cluster. Respondents stated:

• A broad research base exists across Western Canada's academic institutions. Not only in biopharmaceuticals but in all areas of life sciences, including applications in medical assistive devices, aquaculture, agriculture, bioproducts, and the study of plant and animal genomics
• The life sciences community is entrepreneurial and innovative. Western Canada is home to some of the top revenue generating biotech companies in the world. Western Canada has experienced professionals who can take research out of the lab and establish companies. Successful commercialization of any life sciences product helps to build the management and skill level in the region
• With a wide variety of natural resources and raw materials (including existing strengths in forestry, aquaculture, agricultural products, and crops), Western Canada has a competitive advantage that can support further research and product development in these areas
• Investments by institutions and research organizations have resulted in the construction of physical infrastructure that has increased the capacity of life sciences research
• The life sciences community collaborates well, and is willing to support multi-disciplinary initiatives
• Western Canada has many skilled and highly qualified people whose expertise and knowledge is at an international level
• There is good early stage support through the NRC-IRAP program, Angel networks and several provincial funding programs. Examples include the BC Small Business Venture Capital program, and the Alberta Research Foundation)

Current challenges

Respondents believed that Western Canada faces significant challenges to building a vibrant and diverse life sciences cluster. Respondents stated:

• Leadership is needed from the Federal government regarding its commitment to developing a life sciences strategy. A corollary to the need for leadership is the desire for a coordinated strategy among all levels of government. Generally, members of the life sciences community believe there is poor coordination at the provincial and federal level regarding the life sciences industry. As well, a coordinated strategy may better address other areas of life sciences such as bio-products or other natural resources products, which are strengths for Western Canada
• There is a lack of international context evident in government programming. Current programming could do more to make Canadian organizations aware of the full impact of global competition. The lack of international awareness extends to the corporate tax treatment of foreign companies. For example, changes to how US venture capital investment is treated may improve access to US capital for start-up companies
• There is an access to capital issue that crosses all stages of the innovation continuum. While there is a network of angel investors and funds available at the provincial level, there is a need to identify financing for seed and early-stage funding. Access to capital also includes access to tax benefits that would promote private cluster collaboration with non-profit entities. As well, with newly built research infrastructure, there is a need to identify sources of funding for ongoing operating costs
• The longer term challenge for the life sciences community is to convert the research and development that is being created into innovative and useful knowledge with an economic value. There is a need to identify the resources that are required to put in place an integrated value chain where projects are conceived from start to finish with the economic value identified throughout
• There is little coordination between the life sciences cluster and the provincial health care systems. Where researchers have access to patient populations, there is a greater understanding of patient need resulting in more efficiency in developing devices or products to improve care
• Western Canada has a skills shortage. One side of the skills shortage is the inability to attract and retain highly qualified people. At the same time, students trained in Western Canada may leave because there is no research funding or company opportunities for them
• Although the research infrastructure is advancing, the scale and size needs to be increased to attain critical mass

Current opportunities

Respondents believed Western Canada has an opportunity to provide leadership in the future direction of the life sciences cluster regionally and nationally. Respondents stated:

• Western Canada can be on the leading-edge of emerging areas of research in life sciences, including specialty areas such as environmental products like biofuels. There are a number of specialized areas that would benefit from a long-term, integrated strategy for the life sciences across Western Canada
• In Western Canada there are many opportunities for commercialization of existing research that is "in the pipeline" and is ready to be translated into commercial applications
• Government has an opportunity to strengthen the cluster through supporting investment in world-class infrastructure that will support commercialization activity. This could include product development centres, business incubators, and facilities where multi-disciplinary teams can work together
• There is an opportunity to attract highly qualified people to Western Canada who can facilitate research into commercialized products. Facilitators can take basic research from the lab and translate the results into successful product. Other opportunities for highly skilled people include young, research scientists as well as specialized manufacturing skills
• Opportunities to strengthen the cluster through adjustments in public policy mechanisms especially in areas such as tax programs that promote private investment and attract and retain highly qualified people
• The boundaries of knowledge and technology are rapidly changing. The convergence of technology could be accomplished across Western Canada by developing stronger linkages around researchers, business, engineers, clinicians and others in national and international centres. These new linkages would lead to substantial scientific and economic value for Western Canada.

Current barriers

Respondents identified several barriers facing the life sciences cluster in Western Canada. Respondents stated:

• Currently, there is no clear vision or priorities for the cluster at any political level, which reflects the lack of a strategy and cluster champions
• The public is not engaged in the relevance of research in the life sciences. Without general public support there is less public pressure at the political level for greater research and investigation into life sciences
• Nationally and provincially, there is less investment from the public sector into life sciences when compared with jurisdictions such as the European Union
• There are structural barriers with regard to foreign investment. US venture capital firms are typically organized as LLC's, (Limited Liability Companies) which excludes the participants from benefits under the Canada / US tax treaty. In lieu of investing in Canadian start-up companies, US private capital firms will most often purchase the technology or start-up company and move the entire asset or operation across the border
• The development of the life sciences cluster suffers from a lack of international focus. This focus was prevalent throughout the interviews when discussing the lack of cluster promotion whether by company management in executing strategy or general industry involvement to build awareness in the public regarding the international implications of the cluster
• Working permits and visas needed for working scientists are difficult to obtain, take considerable time to be processed, and are not flexible when compared to the US. (In the US, 10 year visas are provided for visiting scientists)
• The local depth of senior managerial talent is thin, and often senior management must be recruited from the US to run Western Canadian start-ups
• The lack of continuity in funding makes it difficult for organizations to fully develop research projects. Funding is often either short-term, project based or tied to political cycles. Longer-term funding models can be used to create a base from which to lever other funding
• In Western Canada, there is a lack of resources available to transfer applied research into actual useable technologies. The support for "validation" and prototype development of research is missing. In the commercialization process, technology transfer works once markets have been identified, developing greater linkages with industry to facilitate commercialization are needed.