Arthur Carty, the NRC's entrepreneurial scientist, balanced cluster development and commercialization with fundamental research strengths
- Ottawa, Ontario
It was either the best of times or the worst of times when Dr. Arthur Carty arrived in Ottawa in 1994 to assume the presidency of the National Research Council of Canada. A renowned chemist and Dean of Research at the University of Waterloo, Carty was selected to lead Canada's largest research and development (R&D) organization through a period of steady growth, strong research and a renewed focus on commercialization and industry partnerships.
Carty's residency in the nation's capital lasted 13 years – 10 years as NRC president and 3 years as Canada's National Science Advisor (NSA) – during which time he put his own indelible stamp on science and technology (S&T) on both the NRC and the larger innovation ecosystem. From technology clusters and spin-offs to basic research, industrial support and skills training, Carty immersed himself and his team in the complex yet critical task of boosting the NRC's capacity and expertise as a vital component of the innovation ecosystem.
Carty also became adept at establishing political and bureaucratic allies as he developed a solid reputation as an entrepreneurial scientist by championing the organization as an engine of research, technological development and commercialization. And while success in the first few years was hard fought, the NRC's stature, activities and budget grew as the government of the day increasingly prioritized research and innovation.
When Carty assumed his new role as Canada's NSA, he left behind an NRC with a research presence in every province – a first for the national agency – and an elevated reputation internationally for its increased focus on bilateral and multilateral R&D. As Carty wrote in the NRC's 2002-2003 Annual Report, "NRC has developed a permanent organizational willingness to embrace change, to seize opportunity, and to act with imagination to continue to meet the emerging needs of Canadians".
The policy context
The NRC under Carty is roughly bracketed by two key national S&T policy documents intended to bring coherence and impact to Canadian growing S&T expenditures. The period also encompassed the transition in government leadership from Jean Chrétien to Paul Martin, Chrétien's long-standing Finance Minister who was a key driving force of the build-up of Canada's research capacity.
In 1996, the federal government released Science and Technology for the New Century – also known as the 1996 federal S&T policy, which encompassed some of Carty's thinking about the organization's future direction.
"The NRC will take a more entrepreneurial approach to innovation and technology transfer," states the policy document focused on the industry portfolio. "This will ensure that the scientific knowledge, technology and related services that the NRC generates correspond to the country's technological needs for the short, medium and long term".
The new policy also heralded a major change in scientific advice with the announcement of two new national bodies – one for internal S&T and another for the broader S&T ecosystem. In place of the previous government's National Advisory Board on Science and Technology (NABST), the government called for the creation of the Council of Science and Technology Advisors to oversee federal S&T. And the private sector-focused Advisory Council on Science and Technology (ACST) – chaired by then Industry Minister John Manley – was established to provide advice on how S&T can enhance national economic performance. It reported directly to the Prime Minister and the Cabinet-level Economic Development Policy Committee.
The 1996 strategy was also notable for the introduction of Technology Partnerships Canada (TPC), external advisory bodies for science-based departments and the government's on-line Strategis database. It also marked a renewed and concerted effort to make federal S&T assets work together as an integrated whole, based upon 7 broad operating principles.
Increase the effectiveness of federally supported research
Capture the benefits of partnership
Emphasize preventive approaches and sustainable development
Position Canada competitively within emerging international regulatory standards and intellectual property regimes
Build information networks for the infrastructure of the knowledge economy
Extend science and technology linkages internationally
Promote a stronger science culture
Specific to the NRC, the strategy announced the launch of a Fellows program, new programs to encourage spin-offs and start-ups of new companies "by creating new linkages to financial institutions and by supporting new innovative business practices". It also cited the NRC's "new program element on 'clean' processing technologies" to support the strategy's emphasis on sustainable development.
In 1998, Building Momentum: A Report on Federal Science and Technology, was released as an update to the 1996 policy, noting the NRC's mandate for industrial support and assistance and increases achieved in the number of spin-offs, licensing agreements and industrial clients.
Early in the new millennium, the federal government undertook an even more wide-ranging initiative that resulted in a new innovation strategy. Achieving Excellence: Investing in People, Knowledge and Opportunity was formulated following an extensive consulting process whereby Canadians at the local, regional and national levels were invited to provide advice and recommendations.
Although it mentions the NRC only in passing, its emphasis on S&T and skills training (which led to the strategy being shared between two departments) once again underlined and complemented the policy thrusts Carty had implemented over the previous 8 years.
Program review: Let the cuts begin
In the fall of 1993, Canada elected the first of several successive Liberal governments that would hold power until early 2006. Initially under the leadership Prime Minister Jean Chrétien, the incoming government was confronted with a $43 billion annual deficit, which it vowed to eliminate through a variety of means including a government-wide "program review" that reduced the budgets of departments and agencies. The Chrétien administration was simultaneously developing a research and innovation strategy but its implementation was delayed while the government put its fiscal house in order.
The NRC was not immune to the cost cutting that ensued. Carty's ambitions to refocus and transform the organization were hampered early on by reduced funding, leading to the short-term necessity of eliminating more than 300 positions from its workforce of roughly 3,000.
In FY 1996, the NRC's $449 million budget was slashed 15%, or $77 million over the next two years. In an early 1995 letter to staff, Carty described the cuts as a "significant blow".
"It is hard for you to think positively about the future during this difficult period of adjustment," he wrote. "I share your frustration over the seemingly endless changes you have gone through."
According to Dr. Bruce Doern, a Carleton University-based public policy researcher and author of the book, The National Research Council in the Innovation Policy Era (University of Toronto Press, 2002), "Carty made it clear to colleagues that he wanted to move away from the 'command and control' era of the early 1990s toward a more participative style of management".
"Carty is seen by many colleagues as less 'bottom line' performance," Doern writes. "The style that Carty brought to the NRC was in large part a product of his experience at the University of Waterloo, arguably Canada's most entrepreneurial university."
Carty opted to implement the program review-related cuts in the first year rather than spreading them over three years. This allowed him to put more focus on restructuring the NRC's technology divisions, as well as technology transfer and commercialization, utilizing the streamlined operations stemming from program review, which were announced in mid-1995. Perhaps most notable was the manifestation of Carty's belief that the NRC had a key role to play at both the fundamental research and commercialization ends of the innovation spectrum.
"Not every scientist or engineer is an entrepreneur and many of them – the majority – want to get on with their research and quite rightly so," Carty told the research policy newsletter Research Money at the time. "There are a few people who seem born to be entrepreneurs and you have to have the mechanisms to enable them to go that route."
Carty even managed to successfully cap a year-long effort to establish a new institute – the Integrated Manufacturing Technologies Institute – in late 1995, by transferring the existing Institute for Advanced Manufacturing Technologies to London Ont. Part of its recently reorganized Manufacturing Technologies Division, initial corporate commitments to the new institute were made by Bell-Northern Research, Siemens Electric Ltd. and 3M Canada.
Riding and surviving the tech boom
While government cost cutting dampened the NRC's ability to expand, Carty's arrival coincided with the global technology boom and Canada's meteoric rise as an information and communications technology (ICT) powerhouse. In 1994, Nortel Networks Corp. was ramping up R&D and marketing on its way to becoming one of the world's largest and most innovative telecommunications firms. Its success spawned the emergence of a world-leading photonics cluster in which the NRC played a pivotal role, assisting in the development of underlying technologies and prototype development.
The agency's expertise also led to important collaborations with many other ICT, aerospace and tech sector firms eager to tap into the NRC's world‑renowned talent and sophisticated research infrastructure.
Despite the financial challenges early in his tenure, Carty was successful in bolstering morale among staff. It helped that he was a scientist and not just a technocrat. Another subtle advantage was his uncanny ability to remember staff names as well as the projects they were working on. Carty also gave institute directors general (DGs) greater latitude in directing operations and initiating research projects. At the same time, he promoted and enabled a more entrepreneurial culture that included an increased emphasis on technology development in the areas of hydraulics, surface transportation and others deemed important to the social and economic interests of Canada.
Tackling the morale challenge would require some flexibility from Treasury Board. Carty wanted to use incentives to encourage researchers to engage in commercialization and providing extra flexibilities to improve the culture for innovation and the commercialization of promising research. Specifically, Carty instituted a bonus system just as a growing cohort of companies emerging during the tech boom was beginning to poach the NRC research expertise.
"The boom was a bit of an issue and even a threat or risk for the NRC because the good people were getting pulled into Nortel so there was a huge demand for people," says Kevin Fitzgibbons, Executive Director of Corporate Planning and Policy at the Natural Sciences and Engineering Research Council (NSERC), who worked with Carty at the NRC and Office of the National Science Advisor (ONSA). "Even after (the tech meltdown) he made sure he wasn't going to be losing people. He helped negotiate with PIPSC to get a number of concessions to keep some of the scientists in the lab and get technicians back."
For Carty, it was all about building confidence among his employees.
"I thought the key to this was conveying that the staff could contribute in a number of ways to the advancement of the organization and to Canada and it didn't all have to be done with industry," says Carty. "The emphasis I made was, everybody can contribute. We're not going to tell you to go one way or the other. That was up to their supervisor and the director general of the institute. They had goals as well … It began to get people to see that this was a new way of looking at management of research and also made them feel that they weren't useless. In (Pierre) Perron's day, if you weren't working on a contract generating money it was not worth keeping it going."
Strengthening regional collaborations
The NRC's growing engagement with regional innovation players also received a significant boost in early 1996 with its release of an Action Plan for Innovation in the Ottawa‑Carleton Region. The plan served as a template to strike similar agreements with regional innovation centres across Canada – an early indication of the emerging cluster strategy that was implemented in the coming years. The regional innovation agenda was championed by NRC Vice President Dr. Clive Willis, who credited the initiative to Carty's experience at the University of Waterloo and its close ties with the greater tech community. Willis noted at the time that previous NRC presidents tended to shy away from embarking on local initiatives for fear of distorting the NRC's historical national perspective.
Collaboration with academia was further strengthened through a 5‑year, $25 million program with the NSERC aimed at linking the NRC's private sector clients to the university sector through collaborative R&D projects.
Also in 1996, the NRC released its Manufacturing Technologies Strategic Planning Framework, the first of 5 frameworks produced for each of its technology divisions. The strategy aimed to support all manufacturing sectors by establishing technology competencies in 12 areas, including materials processing, chemical process technology and integrated manufacturing technologies. Of the 4 relevant NRC institutes, the Boucherville Que.‑based Industrial Materials Institute was in the best position to contribute to the strategic framework. It was one of the NRC's highest earning institutes and had strong linkages to industry and university players.
Restructuring an institution
As Carty began his fourth year at the helm, his senior VP, Clive Willis, announced his decision to retire from the NRC after 24 years. At the time of his departure, Willis was wrapping up work on the NRC's cluster strategy, community and regional initiatives and a new performance framework. These initiatives reflected his keen interest in linkages between research and economic impact, and the need for an integrated national system of research.
Dr. Peter Hackett, then DG of the Steacie Institute for Molecular Sciences before becoming VP Research (1998‑2004), credited Willis with getting the NRC through "difficult times".
"(Willis) wanted to enable more research for the national need – wealth and economic good. He was the source of all this thinking and structured our labs along those lines well before the NRC thought this way," said Hackett at the time (R$, ).
Following Willis' departure, Carty moved to restructure the 5 technology divisions, reducing them to 3. He also split the 17 institutes under the direction of the VP research into 2 divisions: Research and Technology Support and Research, Science and Engineering Systems. Jacques Lyrette, head of the NRC's Industrial Research Assistance Program (IRAP) and former president of the Communications Research Centre, was named VP Technology and Industry Support, which included the Construction Technologies Group and the Infrastructural Technologies Group.
By 1997, biotechnology was emerging as an important economic engine globally, and in Canadian metropolitan centres like Montréal. The NRC benefitted from this momentum with an explosion of activity at its Biotechnology Research Institute (BRI). Under the direction of Dr. Michel Desrochers, BRI enhanced its reputation as a key catalyst for industry development and Montréal's growth as a global biotech cluster. With its focus on pharmaceutical and environmental biotech, BRI boosted its external revenue, forged links to the venture capital sector and attracted government and industry investment in its cutting‑edge facilities. Like Carty, Desrochers was a firm believer in maintaining a healthy research base, as he explained at the time.
"We try to manage the BRI with a portfolio where I put 15% of my efforts in contracts, 45% in collaborative agreements and 40% in long‑term research," said Desrochers. "The 40% is sacred. If I go below that, my pipeline dries up, then the expertise people are looking for at the BRI is going to disappear." (Research Money, ).
Budget balanced, government reinvests in S&T
With the federal deficit on track for elimination by early 1998, the government embarked on a reinvestment strategy that many regard as the "golden age" of Canadian science and technology. The NRC was determined to make the most of these new investments, even though positive budgetary outcomes were not always in lockstep with the organization's strategic plan.
"Things changed in 1998‑1999‑2000 when the government … started to put money into science. They created the Canada Foundation for Innovation (CFI), the Canada Research Chairs (CRCs), Genome Canada and, funding for the granting councils doubled over a period of time," says Carty. "That was a time when Canadian science looked good and was relatively well funded. By 2005 we had climbed the tree, not just among the top countries in the G8 but the larger group in the Organisation for Economic Cooperation and Development."
With the purse strings loosened, Carty and the NRC responded with a series of cluster‑focused initiatives that became a central hallmark of his presidency. Delivered in 2 phases, they included a new or enhanced NRC presence throughout Atlantic Canada followed by an aluminium technology centre in Quebec's Saguenay region, photonics research and fabrication in Ottawa, fuel cells innovation in Vancouver, biomedical diagnostics in Winnipeg, nutraceuticals and functional foods in Saskatoon and nanotechnology in Edmonton.
Carty continued to be guided by a new 5‑year strategy developed shortly after his arrival. Described as a "fresh look" and a "revitalized vision", the Vision to 2001: Science and Technology for Canada's Future strategy was complementary to the 1996 federal S&T strategy and contained the hallmarks and long‑term aspirations of Carty's presidency:
A commitment to excellence
A new entrepreneurial attitude
The finest research facilities
Focusing research institutes into 5 technology groups
Partnerships with industry, government and academia
On the budgetary front, however, all was not smooth sailing for the NRC. The NRC came away empty‑handed in its 1998 requests for significant increases to its base funding and money to launch 5 new initiatives. The initiatives were selected after an ad hoc committee co‑chaired by Carty and Peter Nicholson (then senior VP at Bell Canada Enterprises Inc.) identified the NRC's needs, developed proposals and created a campaign to sell them. Similarly ambitious "asks" in the federal budget of 1999 were also greeted with disappointment.
Other than a one‑time $16 million infusion to purchase new equipment, the NRC was stymied in securing funding for new initiatives. The government decided instead to target its surpluses at the academic sector with some $2 billion over 3 years in new funding. The news prompted an angry response from Carty.
"The money we got doesn't do anything more than what we're doing. There's no scope for starting anything new," he told Research Money. "In comparison with the large amounts that were given out, we did not fare too well. It speaks to the relative priorities." (R$, ).
Nevertheless, Carty remained committed to the strategy contained in Vision to 2001. The government announced funding for some of the initiatives not addressed in the Budget and the NRC forged ahead with its clusters strategy, formulating a freshly conceived pitch for additional funding in the 2000 Budget.
As Research Money noted at the time, Vision to 2001 was designed more like a high‑tech annual report, recasting the NRC as "client‑focused and business‑like … working in collaboration with the private sector and united in the goal of focusing on transformational technologies with the greatest potential for wealth generation and job creation". (R$, ). The strategic plan also coincided with the larger S&T Review and Strategy, the federal government's latest formulation of its S&T assets.
"Absent are the grandiose projections of financial investment in R&D to which the previous (five‑year) plan committed, only to be shot down by repeated budget reductions," wrote Research Money at the time. "Where the earlier document only mentioned regional efforts in passing, Vision to 2001 underlines its new thrust, making its depth in communities across the country a national strength." (R$, )
Intensive discussions with other players in the federal S&T ecosystem were also conducted, including the Business Development Bank of Canada and NSERC – the latter focused on establishing a new venture capital fund similar to the Canadian Medical Discoveries Fund that was nurtured by the Medical Research Council (now Canadian Institutes of Health Research).
Clusters and "Downtown"
Throughout its history, the NRC has experienced significant policy and operational shifts that roughly coincide with changes in presidents. The Carty era was no different, as reflected in the two 5‑year strategic plans he oversaw during his tenure.
By nearly all accounts, Carty was effective in nurturing the relationships required to open up lines of communication, establish horizontal collaborations, interact with the broader federal S&T ecosystem and advocate for additional funding. Patricia Mortimer, a long‑time NRC employee who served as Executive Assistant to Carty and Perron, attributes Carty's success in enacting change to his easy‑going personality and relentless enthusiasm for the position.
"Dr. Carty had a close relationship with all the institutes and DGs, visiting each one annually. He always took time to speak with researchers and remembered them from previous visits," says Mortimer. "He never said 'No' to meetings whether it was with NRC staff, federal bureaucrats or media. He would often conduct interviews or have conversations while in a car going to an airport … Staff liked him because he was a researcher himself and they could relate to him. He sought to combine the research and entrepreneurial aspects of the institutes, which had previously been treated separately."
Mortimer recalls Carty's determination to grow the NRC and have a presence in every province, despite the impact of program review‑related budget cuts. And while he enjoyed close working relationships with Industry Minister John Manley, Jon Gerrard, Secretary of State for Science, Research and Development, Industry Canada Deputy Minister Kevin Lynch and NSERC President Dr. Tom Brzustowski, he also tended to occasionally strain those linkages by taking bold chances.
Says Mortimer: "He (Carty) liked to take risks and often didn't appreciate the bureaucracy of government when he launched new initiatives," which influenced his decision to bring aboard Dan Demers as Director of Strategic Initiatives. Demers acted as a conduit between the NRC and the government during the period when cluster funding was ultimately awarded.
Nowhere were his working relationships with the bureaucracy and federal S&T ecosystem tested more than when he advocated for an ambitious NRC cluster strategy. Building on his emphasis on regional collaboration and eyeing the power and financial muscle of the Regional Development Agencies within the Industry Canada portfolio, the cluster strategy seemed a natural and logical extension of Carty's push for greater community and regional interaction and collaboration.
"Once we got program review in order at the NRC, we began thinking about the future and the opportunities to contribute to science on behalf of Canadians. We then made successive appeals to the government – Industry Canada and Finance and Treasury Board – and we sought new money for new things. That was pretty successful," says Carty. "We had support because Minister Manley was very favourably inclined towards NRC … Those clusters were ahead of their time. Now people are re‑thinking them and it's a new era and hopefully it will work out as well. The cluster strategy was a new initiative and had the support of ministers and the local authorities and that was the beauty of it. It would help give parts of Canada a piece of the NRC and involvement in an activity they hadn't had before."
NRC clusters were enacted in 2 phases. The first cluster initiative was Atlantic Canada‑based, affording the region significant participation in a national organization with linkages to industry and academia. The second phase saw the establishment of institute‑grounded clusters in other parts of Canada, namely Edmonton, Vancouver, Winnipeg, Ottawa and Quebec's Saguenay region.
Manley says the NRC cluster initiative is best viewed within the "broader narrative" the government was developing at the time and spelled out in the policy document Building a More Innovative Economy, which was primarily authored by Industry Canada Deputy Minister Kevin Lynch.
"The NRC was part of it, Canada Foundation for Innovation (CFI), Canada Research Chairs (CRCs), Genome Canada, that whole array … We were trying to build Canada as a place where lots of things were happening, attracting the best people, building the opportunity for more collaboration on scientific issues," says Manley, now President and CEO of the Business Council of Canada. "That became a big component of it, so Art's initiatives tended to be part of that overall narrative … The notion of having the National Research Council partner with regional development agencies to build a science and technology‑based regional hub, now we've got something that maybe we can find some economic merit and that was the cluster strategy."
The NRC's cluster strategy was not quickly realized, nor was it linear. Budget requests for funding to enhance the A‑base, cluster development and other strategic initiatives initially went unanswered in the S&T‑heavy 2000 Budget, prompting sharp response from Carty after being surprised on Budget day.
"I saw the full extent of the money being doled out – which is quite considerable – then I realized the NRC didn't even figure," he told Research Money (R$, ). "I thought this would have been an opportunity to invest in innovation and in the future. This gives us a real problem with some of our initiatives."
The NRC's fortunes changed just 4 months later when the government launched the Atlantic Investment Partnership to support economic development through the region. The announcement included $110 million over 5 years for the NRC to establish clusters throughout Atlantic Canada. Carty said the implementation teams were in place at the time of the announcement, suggesting prior notification. The funding saw the creation of the New Brunswick e‑commerce Institute, enhancements to both the Institute for Marine Biosciences and the Institute for Marine Dynamics, as well as the creation of the Cape Breton Innovation Centre and the Prince Edward Island Innovation Centre.
More good news followed a few weeks later with the long‑awaited announcement of federal support for the National Institute for Nanotechnology (NINT), capping a 3‑year effort by the NRC to establish a presence in Alberta. With support from the Government of Alberta and the University of Alberta, this unique hybrid institute was championed by both Carty and Vice President Dr. Peter Hackett. Through a Cabinet directive, the NRC received $60 million to support NINT, with matching support coming from its provincial partners. The federal contribution fulfilled a government pledge to increase innovation‑related spending in the oil‑rich province.
"I've been working on what and how to do something in Alberta since I became VP three years ago. We had a false start with proteomics but then we came back and I had the idea of nanotechnology as a key platform and everyone jumped on it," said Hackett at the time, adding that he spearheaded a nanotechnology conference in Banff earlier in the year. "We've positioned this activity so that the federal government is making a commitment to the long‑term interests of the provincial economy and Alberta is committing to the national innovation structure of Canada."
While the hybrid institute was touted as a potential model for future NRC initiatives, the experiment in jointly funded and managed institutes was never replicated. While Hackett was not involved in finding the resources to support NINT, Carty says "He was very involved in the intermediate stages of making it happen, putting in place the people and the process to make NINT work. Dan Wayner was also involved. He reported to Peter, served in an interim role as Director General and played a major role in interacting with the VP at the University of Alberta and establishing the initial research projects."
More funding flows
Another $110 million tranche of new funding followed in the December 2001 Budget. It was used to launch the 5 clusters across Canada (aluminium, photonics, fuel cells, medical technologies and nutraceuticals), to purchase new equipment for the institutes and to fund the NRC's substantial contribution to the implementation of Canada's Long Range Plan for Astronomy.
A clearly relieved Carty called the Budget "a great step forward".
"We haven't had many good budgets in the past seven years so this is a welcome change," he told Research Money. "This is phase two of our (cluster) strategy if you like, following the first tranche of $110 million for our portion of the Atlantic Investment Partnership."
The next federal budget in early 2003 brought further modest increases - $10 million to its base budget in support of the cluster initiatives, facilitating new technology centres in Charlottetown and Regina, as well as a $15 million boost to IRAP's base budget, allowing it to expand its core programs. More than half of the new IRAP money was used to repatriate its Industrial Technology Advisors (ITAs) with the remainder used to replace sunsetting funding from the Regional Development Agencies.
While less than anticipated, Carty took some solace in the potential to receive funding through other budget initiatives that were not primarily directed towards the NRC, as he noted in a letter to staff.
"Through other Government initiatives and investments, we will have new opportunities to pursue priorities in areas such as health, sustainable development technologies, to build new partnerships with researchers in universities and to encourage industrial innovation," he wrote. (Research Money, ).
Impact of the University of Waterloo
The University of Waterloo had a profound and multifaceted impact on Carty. Many, including Carty himself, credit that experience for his determination to pursue cluster funding and instil a strong sense of entrepreneurial culture at the NRC. His 27 years at U of W also influenced the NRC's overarching strategy for assisting Canadian industry and enhancing the nation's economic performance. Combined with Carty's strong support of science and research, the NRC embarked upon an expansion of its scope and activities that was well suited to the era of strong tech‑based growth in Canada and globally, augmented by efforts to strengthen horizontal collaboration across government.
"Carty was there at a very good time in general. You saw a lot of investment in science in Canada during that period under (Finance Minister) Paul Martin's watch," says Fitzgibbons. "(Carty) had a role in the creation of CFI, Genome Canada, the CRCs and Sustainable Development Technology Canada. They all blossomed under that time. So there were a lot of interactions that NRC could be involved in as a result of that."
Second 5-year plan
Carty's second 5‑year plan - Vision 2006: Science at Work for Canada - was released in 2002. According to Carty, it was the "first time we set explicit targets in a vision document". Vision 2006 was also the first 5‑year plan that included "an employment philosophy to attract, retain and support its workforce" of 3,400. As well, it included a commitment to boost support and increase collaboration within the NRC clusters being developed at the time. Another key component was the NRC's plan "to identify and develop three technology areas in which it believes Canada can take a position of global leadership".
Unlike past 5‑year plans, the NRC's finances were in relatively good shape, coming off a series of funding increases that strengthened its ability to effectively pursue longer‑term goals.
"We received new funding in December of 2001 and the summer of 2000 but we are an aggressive organization on the move," Carty stated at the time. "We're looking for other opportunities. We're not going to stop here. You can expect more proposals in the future."
There has been considerable debate about the progress of IRAP during Carty's watch in terms of effectively assisting small and medium‑sized enterprises (SMEs). Lyrette was directly responsible for the program during the first few years of Carty's tenure, before handing off responsibility to Margo Montgomery when he was promoted to Vice‑President, Technology and Industry Support. Between 1994 and 2004, IRAP received only modest budget increases, the largest of which was used to repatriate a large number of ITAs onto the NRC payroll. (There were 240 ITAs in 1996, only 90 of which were NRC employees; the majority were paid through approximately 140 institutions contracted to the NRC to provide its services.)
In 1999, lack of additional resources resulted in one of several instances where IRAP was unable to meet the demand for its grants and services. Ironically, IRAP was able to devote funding to collaborate with TPC in assisting smaller firms that applied to the latter. That, too, ran into problems due to the repayable nature of TPC support, leaving unspent much of the $15 million IRAP contributed to the collaboration.
IRAP has long been an important adjunct to the NRC's suite of research institutes and international collaborative activities and touted as model for how government assistance can be effectively deployed by industry. Established in 1945, the program provides strategic R&D project funding and business advisory support to thousands of SMEs from tech‑intensive to so‑called "low tech" companies. The NRC's business services were also delivered by the Canadian Technology Network (CTN). Built on the IRAP model, the CTN augmented IRAP services with about 250 affiliated organizations that agreed to join the IRAP network.
Dr. Denys Cooper, a senior executive with IRAP during the Carty administration, says the president was more supportive of IRAP than his predecessors, although he left the heavy lifting to his vice presidents. Cooper adds that there was also some friction due to Carty's insistence that the NRC institutes be the primary technology source for IRAP‑supported SMEs.
"Companies decide the most appropriate partner and if that's suitable then (IRAP) will fund it. That was a bit of a friction," says Cooper. "I said what we're going to do is make sure we bring ITAs regularly to the different institutes and it was written into the job descriptions of ITAs. They had to visit some institutes every year and run joint seminars between institutes, ITAs and some companies. We increased activity significantly."
"You really needed to create a bit of a firewall," says Fitzgibbons. "Carty did try and introduced a lot more connections there but I think it was resisted on the IRAP side for I think good reasons."
Along with cluster development, the Carty era was defined by an ambitious effort to move research out of the lab and into the Canadian economy and society. Three NRC institutes that were particularly well suited to spinoff activity were the Biotechnology Research Institute in Montréal, the Industrial Materials Institute in Boucherville and the Institute of Biodiagnostics (IBD) in Winnipeg.
Cooper says that the NRC created 37 spinoffs during Carty's tenure. Prior to 1995, there were few incentives within the NRC to encourage its scientists to take a technology to the product stage.
"At the NRC, Carty gave people two years. If it (the spinoff) fails you have the right to come back to the NRC," says Cooper. "The important thing is, he got the message that spinoffs are an important issue in the process."
Dr. Ian Smith, a 45‑year veteran of the NRC, led the IBD during its heyday (it was closed in 2013). He credits Carty with strongly supporting the institute's commercialization activities, leading to several successful spinoffs and the establishment of an incubator/accelerator that continues to this day.
"Arthur was open, he was not pushy. He could talk to anybody in our place - engineers, theoreticians, mathematicians, all kinds of people," says Smith. "He brought that (University of Waterloo) experience but he also brought that respect."
Fitzgibbons recalls that the emphasis on spinoffs came later in Carty's presidency and was promoted aggressively throughout the organization with varying degrees of success.
When Carty arrived at the NRC, the venerable 78‑year‑old institution was already well known and respected internationally. From a personal perspective, Carty first heard about the NRC while studying in England at the University of Nottingham in the 1960s, and had applied for a post‑doctoral fellowship while completing his PhD in inorganic chemistry. And while the fellowship was never realized (Carty landed at Memorial University of Newfoundland instead), his awareness of the NRC and its achievements is indicative of the reputation the NRC has long enjoyed in foreign scientific circles.
"After the war (World War II), post‑doctoral fellowships became quite popular and that was one of the reasons I came to NRC," says Carty, who maintained a lab with several post docs at the NRC throughout his tenure as president. "They had these positions which meant working at an NRC lab with respected scientists, and many NRC scientists who were NRC post docs went on to faculty positions around the world including Canada. That started well before my time."
Once Carty took control of the levers at the NRC, he began forging scientific agreements with a number of countries in Europe, India and East Asia. Perhaps best known among Carty's international efforts is the Chinese island economy of Taiwan, where a working relationship with fellow chemist Dr. Yun Chi proved to be a stepping stone to a longstanding collaboration with its National Science Council and other science‑based organizations and institutes that continues to this day.
"The Taiwan collaboration has grown and maintained its position as one of the leading collaborations for a Canadian organization," says Carty. "We started collaborating and the idea of having a program dedicated to Taiwan‑Canada collaboration came up. We signed an agreement that expanded significantly until it reached about $2 million a year."
Among the notable achievements stemming from the 1997 Memorandum of Understanding between the NRC and Taiwan was the Eminent Researcher Exchange Program in 1999, designed to generate a higher S&T profile for Canada. Carty visited the island economy many times, and enjoys a high degree of recognition and respect for the work he fostered between the two nations.
"We saw an opportunity to be involved internationally and to build collaborative partnerships with key players around the world (and) it involved more than one element of the NRC. One of the assets we had at NRC was IRAP and we played that card internationally as well," says Carty. "In Thailand … we helped them a lot through NRC collaborations and IRAP involvement. The Thais became so keen on IRAP after we accustomed them to the work it did they built their own program – ITAP – the Industrial Technology Assistance Program. I was talking to one of the Thai leaders at the STS Forum in Kyoto last year (2016) and he said ITAP is the best thing they ever did. It's still going and a really positive thing for the SMEs - the ability to apply for funding and form partnerships between industry and universities."
Carty's departure and his new role
By 2003 and 10 years on the job, Carty was tapped to head up the newly-created ONSA by Prime Minister Paul Martin. Martin's aggressive approach to science, technology and innovation (STI) and commercialization marked a significant increase in priority for the file.
Between 1997 and 2001, Martin as Finance minister oversaw an increase in S&T spending of more than 25% in constant 1997 dollars from about $5.5 billion to almost $7 billion, hoisting its total share of the federal budget from 3.7% to 4.5%. (R$, )
Martin unveiled his thinking on STI in a remarkable speech to the Montreal Board of Trade on September 18, 2003. Entitled Building the 21st Century Economy, the address touched upon all of the policy cornerstones Martin had been developing, including new approaches to technology commercialization, cluster development, community‑based innovation and picking technology niches where Canada can be globally competitive.
Martin's enthusiasm for STI resulted in several structural changes to the innovation portfolio within government, including the creation of the ONSA. ONSA was situated within the Prime Minister's Office and given a small staff and budget but lacked a concrete mechanism for placing proposals before Cabinet.
Still, Carty was enthusiastic about the office's potential, which he viewed as an effective tool for promoting commercialization and industrial innovation. His experience at the NRC and perspective developed during his years at the University of Waterloo were succinctly expressed in an interview with Research Money shortly after the NSA announcement.
"It's absolutely critical in Canada that we build and support more small and medium enterprises and that we grow some of these fast‑moving SMEs — we sometimes call them gazelles — into the giants of the corporate marketplace," says Carty. "The payoff for Canada will be when Canada's knowledge base produces ideas and discoveries that can actually have an influence on industrial growth."
The NRC presidency was next filled by Dr. Michael Raymont, who held the position on an acting basis for a year prior to the appointment of Dr. Pierre Coulombe in 2005. Throughout that time, the legacy and achievements of Carty were leveraged to propel the organization forward and hold its own in an S&T world increasingly dominated by globalization.
NOTE: In preparing this article, the author drew extensively from the archives of RE$EARCH MONEY, NRC documents, secondary analytical sources and primary interviews with individuals who worked with Dr. Carty. The author also spoke at length with Dr. Carty, who recently retired from his position as Executive Director of the Waterloo Institute for Nanotechnology.