CCA panelists talk innovation financing
It’s been said that innovation is spurred by a crisis. That when a novel situation presents itself with new challenges, people imagine new solutions to deal with those challenges.
That adage holds true today as contractors deal with the challenges presented to them on their worksites and in their offices by the COVID-19 pandemic.
As part of its series of Un-Conference webinars, the Canadian Construction Association (CCA) hosted a panel discussion on innovation financing, called How to finance innovation during a crisis.
Joining CCA board member Mike Reinders were Kyle Hulme, vice president, strategy and operations with BDO Canada; Jean Léger, industrial technology advisor with the National Research Council of Canada’s Industrial Research Assistance Program (IRAP); and Tim Fitch, owner and director at Invennt Ltd.
The panelists opened with a discussion about innovation, and why it is particularly important during the COVID pandemic.
“Innovation has been on construction’s radar for a long time now,” said Léger. “With COVID, I think things that might have been in contractors’ minds for development five years from now are coming to the forefront today. There is very much a motivation now to adapt or create.”
Hulme agreed, adding that COVID is encouraging contractors to think in new ways about managing sites, working remotely and handling transactions.
With that in mind, Reinders asked whether there are particular innovation-funding programs available to construction during this crisis time. Léger said there isn’t anything specifically available now with a “COVID-19 crisis management for the construction industry” label attached to it, but the Government of Canada maintains several programs that are available to the construction industry.
Innovation Canada, for example, offers a range of funding programs that can be accessed by all Canadian businesses. IRAP is similarly open to working with construction firms to build innovation projects. Innovative Solutions Canada often issues challenges to industries to solve particular societal problems, and the National Science and Engineering Research Council always has programs to link innovative firms with university researchers.
One of the other programs being promoted by the CCA in conjunction with Innvent is the Scientific Research and Experimental Development (SR&ED) Program. The program is offered by the Canada Revenue Agency, and provides tax credits for qualifying projects. Innvent has partnered with the CCA to offer proposal-investigation and writing services for contractors that may qualify for such credits.
Reinders asked Fitch whether the SR&ED credit program was worth the effort for contractors.
“It needn’t be a massive administrative burden for applicants,” said Fitch. “Our specialists can help contractors uncover qualifying costs and activities, and articulate these properly to CRA evaluators.”
The process of discovering the information needed for an application is really about having conversations with staff, and honing in on those projects and solutions that look promising. In this way, Innvent’s processes take the burden off contractors.
Reinders asked Hulme whether private funding is available to contractors to fund innovations.
“Cash flow is tight, so before making applications, I recommend doing a complete due diligence of your expected return on investment,” said Hulme. “Contractors need to ask what is the minimum level of return required to make a project worth the investment. That return could be in the form of boosting profits or growth, or it could be about creating operational savings. We’re also seeing more non-traditional approaches to funding out there, whether those be strategic partnerships or accelerator programs. We always recommend organizations consider partnering with similar companies to solve shared problems and share resources.”
Léger also suggested that construction look to the manufacturing sector for innovation inspiration.
“Construction is a form of manufacturing, and that sector has adapted its processes to respond to the COVID-related challenges,” he said. “I also think there are many ideas to be drawn from your own team—the people on the sites performing the work—as well as subtrades, suppliers and design partners.”
Reinders also asked about the kids of innovation that may be most likely to draw funding. Hulme suggested two.
“One is workplace productivity and collaboration,” he said. “So any solution that helps organizations work getter together remotely. The other is social distancing and health and safety protocols. I see a ton of innovation out there in the way people are responding to those requirements.”