Canada’s Auto-Technology Incubator Feeling the Heat

Frise Goal more jobs not more research

Auto21, a vital force in Canada’s auto industry, faces an uncertain future as its government funding – more than half of its total support – is set to run out in 2015.

Auto21 brokers partnerships between university-level researchers and industry stakeholders to foster innovation. While private-sector contributions have totaled $44 million ($42.1 million) since the enterprise was established in 2001, some C$58 million ($56 million) has come from Canada’s federal government.

Now the organization is entering the final stages of its second funding cycle.

“You can’t get a third funding cycle,” warns Auto21 Scientific Director and CEO Peter Frise. “Those are the rules of the program.”

And there is no talk of changing the rules, even to accommodate an enterprise that has generated more than 120 patents, licenses, non-disclosure agreements and technology commercialization deals.

Taxpayer-financed “management funds” are available to “help them transition to a new model,” says Lauren Hébert, spokeswoman for Industry Canada, the government arm that now administers Auto21’s support.

But at $1 million ($957 million) over two years, such support represents less than 9% of Ottawa’s $5.8 million ($5.5 million) annual commitment to date.

“We are aware of some of the funding opportunities (government officials) outline and they are under consideration by our board as part of our long-term strategy for life after (federal) funding,” Frise tells WardsAutoin an email. “(Auto21’s board) is committed to ensuring that  Auto21 is able to offer continued support to the Canadian automotive sector following 2015.”

How this will be accomplished is not yet known.

The uncertainty reflects the prudent fiscal policy that largely insulated Canada’s economy from the recession that rocked the U.S. and reverberated around the world. But it also flies in the face of Auto21’s achievements and similar, highly successful public-private partnerships such as Germany’s Fraunhofer Society.

That country’s federal government provides a steady 33% of the funding required to operate the decades-old society’s research. Additional monies also come from various German states.

The Fraunhofer Society regularly comes to the aid of industry, says Steffen Pietzonka, vice president-marketing at Germany-based automotive-lighting giant Hella.

“They may have some testing equipment have we don’t have or can’t afford,” Pietzonka says.

Research sustains the Fraunhofer Society and companies benefit from the research, he adds. “It is a win-win situation.”

The thought of a diminished Fraunhofer Society is inconceivable to Germans, Pietzonka says, because the nation places a premium on innovation. “It’s all we have because we have no resources,” he adds.

Unlike Germany, Canada has no homegrown auto makers. But the world’s 35^th-largest country by population fights well above its weight class in the arena of innovation, Frise claims.

Among the projects shepherded by Auto21 over the years:

Without Auto21’s involvement as knowledge-broker, these innovations likely would have been shelved by researchers who often are content with having their work published in academic journals.

“The goal is not to do more research; the goal is to create more jobs,” Frise says. “Often, the hardest part of (research) isn’t doing the work, it’s making the right connection.”

Auto21 also helps auto makers and suppliers engage the academic world in search of new solutions.

“To most members of the public or the business world, a university is a pretty opaque place,” says Frise, who also is an engineering professor at the University of Windsor, located in the shadow of the Ambassador Bridge that links Canada and the U.S. via Detroit.

“They’re big; they’re bureaucratic; they’re slow; they’re hard to access,” he adds. “Professors don’t have their own secretaries, so if the guy’s away for two weeks, nobody answers the phone. That’s just how it is.”

According to 2010 statistics, Canada’s auto industry employed more than 442,000 people and accounted for 12% of the country’s manufacturing output and 17% of its manufactured exports – more than any other manufacturing sector.

Industry Canada denies any suggestion that the Canadian auto industry is a low priority.

“The Government of Canada recognizes the importance of research, technology and innovation in building a strong and competitive automotive industry,” Hébert says in a statement emailed to WardsAuto.

“Through its science and technology strategy, the government of Canada is working to ensure a competitive marketplace and an investment climate that encourages businesses to compete on the basis of innovative products and technologies.”

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