National Research Council president John McDougall has a theory about why Canada doesn't get full value out of the billions it pours into research.
Blame it on health care. The country spends nearly half of its research dollars in an area that produces relatively few spinoff benefits because Canada isn't a global player, says Mr. McDougall, appointed last year by the Harper government.
"We don't have a health industry, other than a consuming one. So it's not really a surprise we don't get much out of it," the Alberta-bred engineer and businessman explains between bites of a sandwich and a cup coffee at Ottawa's Fraser Café.
"We're investing most of our assets in a race that might start in Canada, but ends in another country. It's not that we don't do good things, it's that we're exporting raw technology, and people."
With the keen eye of a portfolio manager, Mr. McDougall is determined to get a better "return" on the nearly $1-billion a year Ottawa spends at the NRC by firmly rooting the country's leading government research organization in a clutch of quintessentially Canadian projects.
And just maybe, he'll help fix Canada's innovation gap along the way.
So Mr. McDougall is moving the venerable 94-year-old institution away from pure "curiosity research" toward work on a cluster of key scientific challenges that have the potential to drive Canada's economy. So far, the short list of four flagship projects, or "big ideas," includes research into higher-output wheat strains, printable electronics, composite materials made from biomass and CO2-ingesting algae.
The NRC can "sprinkle" resources around the country, hoping some of its bets pay off over time, or it can "steer the ship a little more," he said.
"We're dealing with limited resources, and it's not as if there is a mattress full of money that keeps replenishing itself. We've got to get value out of it."
The transformation is not without controversy. Critics have complained about Mr. McDougall's lack of a science background (he doesn't have a master's or a PhD), his penchant for projects most likely to benefit Western Canada and his attraction to research in areas he put his own money as a private investor.
And inside the NRC, there's grumbling about his efforts to turn scientists and researchers into salespeople and promoters.
But Mr. McDougall is unapologetic. Canada, he pointed out, is too small a country to do everything. So it must develop critical mass by better targeting its R&D efforts.
"Canada has a psyche, and the psyche is one of fairness, which leads to a slice-and-dice mentality," he lamented.
If Calgary has a medical school, Edmonton wants one, too. And the pattern, he argued, is replicated across the country, with every dollar spent on R&D.
"It's very hard to develop critical mass when we are continually chopping it up," he said. "But if we don't get critical mass, then we're never going to develop more RIMs in this country," referring to Research In Motion Ltd., the Waterloo-Ont.-based maker of BlackBerry smart phones.
Mr. McDougall is an Albertan to the core – a fourth-generation Edmontonian who made his living in the oil patch and real estate before taking over the Alberta Research Council in 1997.
He's blunt, but amiable, peppering his sentences with expressions such as "by golly" and "surely to God."
And he grumbles good-naturedly about the Ottawa bureaucracy: "It's a very well-refined art, and there's lots of it."
But the smile fades as he describes the conflicts between the demanding timelines of the NRC's private sector customers and the endless questions and requests he gets from inside the government.
"The one word I hate in this town is 'template.' There's always a new template," he complained of the traditional ways of doing things.
Mr. McDougall, entering Year Two of a five-year term, still lives in Edmonton, in a newly built house he and his second wife Irene recently moved into on the North Saskatchewan River near the University of Alberta. Among his regrets is that he only gets back there three or four days a month.
Year One at the NRC has been consumed with developing the flagships. Aided by a team of about a dozen NRC officials, Mr. McDougall has identified the first four programs. He eventually expects there will be 15-20 of them, helping to guide the NRC's money and effort for years to come. As new projects come to the fore, other research projects may be wound down.
"The flagships will be a constant evolution, like a series of waves coming on a beach," he said. " … It's a process that's never-ending."
But how do you take the vast breadth of research the NRC does – everything from ice to microelectronics – and figure out what stays and what goes?
Mr. McDougall suggested it's a case of figuring out where Canada has a strategic advantage, where our industries fit into the global economy and where there's realistic potential to develop a value chain of companies that will use and ultimately invest in the NRC's work. And almost as importantly, he said the flagships must be projects that people can get their minds around – both inside and outside government.
"If we are going to get these economic benefits, we have to find things that make sense in the Canadian context," he said.
All countries have different assets to work with, Mr. McDougall said. And like it or not, Canada's greatest strength is its natural resources, which are a natural focus for the bulk of the NRC's work. He pointed out that Canada has 20 per cent of the world's known oil reserves, a third of its high-grade uranium, 20 per cent of its fresh water, as well as boundless biomass and minerals other countries crave.
"Surely to God, in a world that has an insatiable appetite for this stuff, that should be a natural hook to hang at least some of this innovation agenda on," he argued. "Because if you do it well, you help the world, you help your own economy, and you create jobs, innovation and a value chain along with it. And it's very hard to break it away because it's tied to something here in the ground."
The NRC, he added, probably enjoys a better reputation internationally than it does at home. And that's a problem.
"We aren't clear with the public in Canada what we are doing. They can't see it," he said. "Part of success means being able to communicate with people so they understand what you're doing and why it matters."
Mr. McDougall is less concerned about budget cuts, which are looming for all government departments and agencies this year. The NRC recently cut 52 jobs across the country, many of them linked to the organization's Industrial Research Assistance Program, which provides research aid to smaller companies.
Mr. McDougall acknowledged there will be more cuts. But he said he's confident the NRC can continue to grow, by attracting private sector financing to its flagship programs.
"I came to grow the place, not shrink it," he insisted. "Worst-case scenario is that whatever we will lose from government, we'll make up from other sources in terms of overall capability."
Roots: Born and raised in Alberta, John McDougall's provincial roots date back to the 1870s, when his great-grandparents came to Edmonton, then a remote outpost of 40 people. "In the beginning, if you're going to come into a place and make something, you really have to dig in and do it yourself," he says of his ancestors.
Education: Unlike many of his predecessors at the National Research Council, Mr. McDougall is not a scientist. He doesn't have a PhD or Master's degree. He earned a BSc in civil engineering from the University of Alberta and completed several postgraduate courses in environmental engineering. He is a fellow of the Canadian Academy of Engineers.
Family: Mr. McDougall has been married to his second wife, Irene, for 15 years. The couple live in a newly built house near the University of Alberta in downtown Edmonton. They have four adult sons from their previous marriages. One owns a yoga studio, another runs a ski school, one is doing post-doctoral research in the United States and the fourth is in marketing for Cold-FX.
Career: Mr. McDougall began his career in the oil industry, worked for a while in the family's real estate business and eventually founded his own consulting engineering firm. He later spent 12 years as president and CEO of the Alberta Research Council. From 1991 to 1997, he taught at the University of Alberta as chair in management for engineers. He's also the founding chairman of Innoventures Canada.
Why he took the NRC job: "In Canadian terms, in innovation, this is as good as it gets. You have the biggest levers to pull, great infrastructure, lots of brilliant people and a mandate that says 'Make a difference to the economy.'"