While Canada has not conducted formal technology foresight studies, it has used broad-based consultations involving governments, the private sector, academia and interest groups to set national science and technology (S&T) strategy. Such an exercise was completed in 1997 and resulted in a comprehensive federal S&T strategy, as summarised in this paper.
In addition to this national approach, public and private sector institutions do use a variety of technology projection methods, such as technology forecasts and technology roadmaps, for setting S&T strategy. These studies may serve individual firms or institutions or may be aimed at specific industrial sectors or sub-sectors. While large-scale Delphi surveys are not used to conduct these studies, techniques such as scenarios, expert and interest group consultations and roundtable discussion groups are similar to methods used in foresight studies.
This paper describes the technology road map process for setting industry sector R&D strategies and its outcomes. Finally, this paper discusses the technology forecast methodology used by industry to set firm-level R&D strategies.
As the world continues to head towards economic globalization, the competitiveness of knowledge-based economies is becoming increasingly dependent on the development of leading-edge technologies and their rapid application by a country's innovation system. Some of the many challenges facing countries that are competing in the knowledge-based economy are: to develop more productive scientific and technical infrastructure and expertise; to become more effective in acquiring knowledge from global sources; and to increase the efficiency of diffusing and utilizing knowledge throughout the innovation system. In addition, the science and technology (S&T) capacity of a country must be underpinned by the ability to set strategic directions and to establish investment priorities. In Canada as in other countries a variety of methods and tools are used to develop S&T strategy, ranging from techniques used to set national direction to those used to establish firm-level strategies.
While Canada has not used large-scale Delphi surveys to conduct formal technology foresight studies to set national S&T strategy, it has used broad-based consultations involving governments, the private sector, academia and interest groups to achieve similar results. Such a consultative exercise was completed in 1997 and resulted in a comprehensive federal S&T strategy. The description of the results of this exercise constitutes the first part of this paper.
In addition to this national approach, public and private sector institutions do use a variety of technology projection methods, such as technology forecasts and technology roadmaps, for setting S&T strategy. These studies may serve individual firms or institutions or may be aimed at specific industrial sectors or sub-sectors. While large-scale Delphi surveys are not used to conduct these studies, techniques such as scenario development, expert and interest-group consultations and roundtable discussion groups are similar to methods used in foresight studies.
In late 1996 the ministry of industry (Industry Canada), in partnership with the Ontario Aerospace Council, 22 Canadian aerospace firms, the National Research Council and the Department of National Defence, developed a technology roadmap for the aerospace industry. This study fit within the greater context of other Industry Canada roadmap studies on electrical power, forest operations, geomatics, medical imaging, metal casting and wood-based panel products. Entitled "Canadian Aircraft Design, Manufacturing and Repair & Overhaul Technology Roadmap", the document identifies fifty critical enabling technologies required by the industry to design, build and maintain aircraft, aircraft systems and components, in order to meet customer demands in the period 2001-2005. The steps and the results of this process constitute the second part of this paper.
Lastly, in 1997 a study was conducted by the National Research Council of Canada (NRC) on the use of technology projection methods within Canadian industry. The study revealed that, in general, industry conducts technology forecasts that use similar methodologies to those used in the technology roadmaps mentioned above. The final part of this paper discusses the findings of that study in terms of the methods used in the technology forecasts, criteria used in the selection of an industrial R&D portfolio and the sources of information.
Gross Domestic Expenditures on Research and Development (GERD) in Canada, in 1998, represented about 1.7% of GDP, up from 1.2% in 1981. In absolute values total expenditures in Research and Development (R&D) have increased 3-fold from 4 billion in 1981 to 13 billion in 1998. This growth has been fuelled largely by growth in industry expenditures and by foreign funding of Canadian R&D. In 1998, 49% of all R&D expenditures were funded by industry, 22% were funded by the Federal government and 13% were funded by foreign sources. Also in 1998, 64% of research was performed by private enterprise, 22% by Universities and 11% by the Federal government.
Although Canadian industry carries out R&D in a large number of sectors, it has focused significant resources in the areas of telecommunications (38%), manufacturing (16%), aerospace (14%) and pharmaceuticals (10%).
In 1996, the Canadian federal government completed a major review of its expenditures and programs related to science and technology. This S&T Review was part of a government-wide Program Review aimed at getting government spending under control, reducing duplication and focusing activities more closely to the strategic priorities of the future. As part of the S&T review, seventeen industrial sectors were examined, covering a broad range of industries from resource to high-technology manufacturing and services. This exercise provided the basis for understanding the relationships between Canada's resource, manufacturing and service industries and enabled the identification of trends and opportunities in key sectors of the economy where federal S&T could have a positive impact.
Through a broad consultation process, which included Canada's industries, the federal government established its strategic priorities for technological investment. It led to the identification of two new priority areas for federal S&T support: information and telecommunication technologies (IT&T) and advanced manufacturing technologies (AMT). As well, the earlier commitment to two key technologies, mainly biotechnology and environmental technologies, was renewed. These technologies fall into the category of "enabling technologies", which are the technological base for new products and processes upon which many industries depend for competing in global markets. It is also acknowledged that stimulating the development of these enabling technologies will leverage subsequent applied R&D in a number of sectors of the economy, providing important technological spillovers and contributing to making those sectors more efficient and productive. As such, these areas for federal S&T investment were selected on the basis of their potential to be key generators of future wealth in Canada as well as for their correspondence with competencies and resources of the government's S&T agencies and, thus, for their potential to form strong links to Canadian industry.
After unprecedented consultations, the Federal government issued a new strategy entitled, Science and Technology for the New Century. This strategy outlines a series of governance mechanisms, operating principles and priorities that will guide Federal S&T into the next century. Recognizing the role of knowledge and technology in economic growth, the Federal science and technology strategy is based on a set of national goals to which our S&T resources should be directed. These goals are: 1) Sustainable job creation and economic growth; 2) Improved quality of life; and, 3) Advancement of knowledge.
To further the management of the Federal government S&T effort in a more comprehensive and coordinated way, the S&T strategy created new institutions and mechanisms to improve advice, governance, decision making and coordination. One of these new mechanisms is the Advisory Council on Science and Technology (ACST), which reports directly to the Prime Minister and provides strategic advice on a range of S&T issues to the Cabinet-level Economic Development Policy Committee.
The strategy also defines seven operating principles to guide government's departments and agencies in performing and investing in S&T into the next century. These operating principles are:
Following closely upon this strategy were Action Plans for each Federal area of S&T activity to put these goals and principles into action. A central theme of these Plans is a new managed approach to coordination and cooperation among the various Federal players in S&T. The creation of the "Industry Portfolio" - a grouping of 11 Federal departments and agencies which report through the Minister of Industry, was a commitment to this new managed approach.
The Industry Portfolio includes five Federal R&D funding and performing organizations (including NRC), three regional development programmes, a financial organization, a Federal standards body and the national statistics agency. Together, these 11 organizations oversee a combined annual investment in S&T of more than $2 billion, which represents 41% of total federal S&T spending.
The Industry Portfolio is creating a new vision and a new strategic approach based on coordinating the distinctive capabilities of its department and agencies. This approach is founded on a common belief in the importance of entrepreneurship, cooperation, and partnership that will foster collaboration and promote synergy. It is also founded on the role of government as a catalyst within the Canadian system of innovation.
Although there are a growing number of initiatives designed to implement the S&T strategy to address the defined priority areas for investment, the development of partnerships and the alignment of portfolio partners programs, the following list provides some key examples.
In 1995, Canadian government officials noted the significant efforts in the US, the UK and other countries on developing technology roadmaps for various industries, usually with significant government support, and the positive results being achieved. This concept was piloted in the Canadian context in certain key industries, starting with aerospace and forestry. Electrical power, geomatics, medical imaging, metal casting and wood-based panel products soon followed. The technology roadmap process brings representatives from both the private and public sector together to create forecasts that will help Canadian companies compete domestically and abroad. Government's involvement is limited to a facilitator role.
In late 1996 the ministry of industry (Industry Canada), in partnership with the Ontario Aerospace Council, 22 Canadian aerospace firms, the National Research Council of Canada and the Department of National Defence, developed a technology roadmap for the aerospace industry. This was in many respects the pioneering roadmap in Industry Canada. It developed the approach and a three-step process for roadmapping in a Canadian industrial context. The approach was to insure that the roadmap was championed and produced by the industry, with support from research organizations and universities, while Industry Canada played a facilitating role. This ensured that industry would consider the results to be credible. To allow industrial competitors to collaborate, only pre-competitive, enabling technologies were considered. The final important aspect of the approach was to address roadmapping from a market-pull rather than a technology-push perspective.
This approach proved to be successful in that it convinced 22 Canadian aerospace firms, ranging from Original Equipment Manufacturers (OEMs) to small sub-system and component suppliers, to collaborate for the first time in defining the technological future of their industry.
The process consisted of the following steps. The first step was to define the market pull in terms of the future requirements, which each customer in the supply chain would impose on the supplier. This starts with the end user's (e.g. the airlines) requirements, such as cost and performance improvements, environmental and regulatory changes, and passenger comfort. These requirements are refined as they move down the supply chain, from aircraft OEM's to major system integrators, to subsystem integrators, to component suppliers. Each level translates the market requirements from its customer into requirements, that will be imposed on its suppliers. Such a market requirement forecast is largely non-proprietary and therefore capable of being shared by the roadmap project participants.
It was important to choose a reasonable time frame for these market-requirement forecasts in terms of the industry's typical product development and production cycle. This time frame would cover a period far enough in the future to allow the introduction of new products, but not so far as to drastically reduce reliability of the forecast. The time frame chosen was 2001 through 2005.
The second step in the process was proprietary to each participant, and therefore not shared. Each firm examined the impact of the market requirements defined in step 1 on its product line, to identify the next-generation products, including the incremental modifications and changes to their current products, to successfully compete in the future market place.
Step 3 selected and identified the key or critical technologies, which would have to be in place to competitively design, manufacture and support these new or incremental products. These "enabling" technologies did not deal with proprietary products or processes, and could therefore be shared. In fact, the description of these technologies became the roadmap.
The selection process in step 3 was performed by eight Technology Working Groups covering eight technology areas: design; environment; maintenance, repair and overhaul; management; manufacturing; materials and structures; systems; and visualization. These eight groups described fifty critical enabling technologies.
The technology roadmap has benefited all participants. For companies it is a strategy development tool to identify the gaps between their current technological capabilities and future requirements, and to make technology investment decisions to close this gap. For research and educational institutions it provides guidelines for structuring future academic programs. For governments it provides a strategic direction for industrial development activities. In the case of the Canadian Aircraft Design, Manufacturing and Repair & Overhaul Technology Roadmap, several firms have initiated R&D projects to acquire technologies described in the roadmap. The National Research Council's Institute for Aerospace Research has used it to design its strategic plans for research in advanced aerospace manufacturing. The Aerospace Industries Association of Canada and the National Research Council have combined to establish an Office of Collaborative Technology Development, which facilitates the establishment of multi-disciplinary, industry-research organization-university teams to develop roadmap technologies. A key Industry Canada technology investment program provides preferential support to collaborative teams undertaking R&D identified in the roadmap.
In summary, the roadmap effort has focused attention on market-driven technology requirements, and is encouraging collaboration within the public and private sector Canadian aerospace community on technology development.
Finally, on the most micro level, technology forecasting methodology is used by the Canadian private sector corporations for strategy development. A study conducted by the National Research Council in 1997 revealed the technology forecast methods and practices used by industry through interviews conducted with decision makers in six leading Canadian private sector technology firms in aerospace, information technology, communication technology and pharmaceuticals. The following will present the results of this study.
On a general level, from a corporate R&D perspective, a technology forecast is seen as a two-way communication process between both internal and external information sources to ensure future needs of customers are met in a competitive way by the firm and its partners.
From the technology pull of customer needs to the definition of an R&D research portfolio, we found a 3-step process very similar to that used in the technology roadmapping exercise mentioned above. These three steps are used to define the R&D portfolio, which support the corporate strategy. Technology forecasts are used in this process to understand and qualify future needs and opportunities so that a strategy can be defined to meet those needs.
The first step in the process involves looking at customer needs. This is the earmark of a strong technology pull approach. Within this context a common comment by industry executives was that "customer needs are all that count". To understand and meet customer needs the corporation first looks at existing customer needs, as identified by the customers themselves. These unfulfilled needs are understood within the context of existing technologies. Finally the corporation will look at the socio-economic drivers which will re-shape short term and long term customer needs.
Technology projection tools are used in step one to determine what are the present and future technology needs of the customer. To do so, corporations will engage in technology scanning, tracking and monitoring through conferences, literature reviews, and competitive intelligence. They will forecast technologies using consultations with, most importantly, the customers themselves. Other sources of information include suppliers, competitive bids and competitor publications. A characteristic of useful projection information is that it must lead to actionable items whether in the short or long term or identify credible potential technological outcomes. Useful projection information will help answer: What is the potential size of the market and its growth potential? What are the barriers to market entry and the market's key success factors? What is the potential for profit margin?
The second step identifies the technologies, systems and equipment required to fulfil customer needs. Technology projection tools such as scanning, tracking and monitoring are used to understand the intersection of in-house, partner and competitor technology development. The outcome is strategic positioning. Competitive intelligence is critical at this stage. Useful information collected will help to answer: What are a company's competitive capabilities and technologies? Are there key partners with key technologies that could help meet customer needs? What are competitors doing in this area and likely to do in the future? Is this an area at which the corporation excels? What will be the benefits of a given R&D investment in terms of company capabilities (productivity, manufacturing advantage, service advantage, maintenance advantage, etc)? What are the risks and opportunity costs? What magnitude of investment will enable market leadership?
The final step is strategy development: what will be the R&D portfolio? Which core technologies will be developed? Which ones will be acquired through partnerships and acquisitions? This is the action step where the knowledge gathered through technology projection tools in steps 1 and 2 now inform strategy. Technology forecasts can help answer common questions asked by a corporation in strategy development: how do we win market position in the current sector with current technology? How do we enlarge customer servicing with current technology? How do we win market position in the current sector with new incremental technologies? What are the new opportunities in latent markets?
The process also includes a feedback and review loop, which continually improves and updates strategy and understanding.
Within this three-step framework, the most important principles in maintaining a dynamic, leading-edge, technology-based corporation is a bottom-up innovation system. Forecast tools, such as scanning, tracking and monitoring are used at the base, within the business units, by project managers and scientists. This makes sense in a technology pull situation as the business units are those closest to the market. The bottom-up model makes use of "information champions". An information champion is an individual within the business unit that will spearhead projection research and disseminate this information horizontally and vertically. Champions ensure a continuity in scanning, monitoring and tracking, which allows for comparable results. Champions cultivate ideas from the base and interface these with external advisory committees of customers and industry representatives to determine feasibility and utility. The ideas then go upwards to feed into the strategic process. Within this model, there will be a small team of technology forecast experts at the corporate service level that will conduct technology forecasts at the business unit level. They will bring rigour to the forecasting process, inform on forecasting techniques, provide genuine analysis, find additional information, and bring the business unit generated ideas into the strategy development process.
Before concluding, one final note should be made on the time horizon of technology forecasts for corporations. Because corporations are client driven, their projections do not go much further into the future than the needs of the customers themselves. This translates into time horizons of normally less that 5 years for a typical technology based organization. Corporations that derive a significant portion of their revenues from new technologies will tend to have a longer time horizon, while those who tend not to lead with technological innovation have shorter horizons. Time horizons also vary significantly depending on the speed of change within the industry, comparing information technology and aerospace for example. Further, with an industry certain product categories demand more technological innovation. For example, in information technology, innovation in keyboard technology will use a much shorter horizon than that in chip design.
National level strategy, industry level strategy and corporate level strategy should and can be highly synergistic in the development of a strong national and regional economy. Stretching from methods for national policy development, to methods for the establishment of industry sector strategies, to those that define corporate strategies for individual firms, we find a continuum in the type of information generated by the respective technology projection tools used. This continuum of information goes from pre-competitive to competitive, from a focus more on breakthrough, enabling technologies to one aimed at incremental improvements in technology, and from an analysis of a high number of potential future paths to an investigation of a more well-defined narrow focus.
National policy can be seen to prepare the soil for technology development. It does so by arranging a set of financial incentives that will create an innovative environment geared towards the advancement of technology. It prepares the soil by focussing on pervasive, enabling technologies that tend to be long-term in orientation, from which many short-term competitive technologies develop. At the National level, emphasis can be on risky breakthrough technologies where a high number of possible paths exist. Technology projection methods at this level have involved extensive consultations to gain consensus on how and where to focus the national research portfolio. The consultations focus on a long-term time horizon, are pre-competitive in nature, and are usually in the realm of technology push.
Technology roadmaps generally focus on an industry sector rather than on technology. Considering the example of the aerospace industry, the process sought to identify pragmatic actionable items for the industry as a whole. The roadmap exercise produced a list of 50 enabling technologies that would be necessary for the Canadian aerospace industry to be competitive in the period 2001-2005. Recently, an office was created to help bring the industry together for the benefit of all. The time horizon here is not very long and the type of information generated mixes both competitive and pre-competitive types of information.
Finally, at the firm level, technology forecasts are used to generate concrete actionable strategy that is highly competitive in nature. In this context, the focus is on developing incremental improvements to technologies, where the time to market is quite short.