Innovative people, innovative companies
By Patrick Flannery
We all have heard for a long time that we are drawers of water and
hewers of wood with little ability to add value to the resources we
extract from our rich landscape.
We all have heard for a long time that we are drawers of water and hewers of wood with little ability to add value to the resources we extract from our rich landscape. Such organizations as Export Development Corporation’s Corporate Research Department have linked this failure to a lack of investment in R&D. “R&D has become a key element in the development and support of companies’ global supply chains,” EDC CRD director Todd Evans wrote in a 2009 working paper. “However, Canada has fallen behind its G7 and Organization for Economic Co-operation and Development competitors when it comes to investment in R&D. Spending on R&D in Canada is equivalent to 1.8 per cent of GDP, versus 2.3 per cent for the OECD on average, and this divergence in R&D intensity has worsened in the pas few years. Countries such as Sweden, Finland, Japan and Korea have R&D intensity rates in excess of three per cent.”
|Research and development in the Canadian glass industry is rarely a matter of bubbling beakers and white lab coats. Innovation is something that happens every day as part of normal operations, and not a dedicated initiative. NSERC appears to understand this.|
The Institute for Competitiveness and Prosperity, an Ontario think-tank, points to the dire consequences of our incuriosity in a working paper called Small Business, Entrepreneurship and Innovation. “We are less productive than other developed countries like the United States, France and Germany,” Roger Martin, dean of the Rotman School of Management at the University of Toronto, writes. “That is to say, we are less successful in creating value from our human, physical and natural resources than other countries. Lower productivity is synonymous with lower innovation, since product and process improvements result in more value being created with the same resources. The economic progress we have enjoyed is the result of more people working and working more hours in Ontario and Canada than in many other peer jurisdictions. We work more, but not smarter.” Chilling words, to be sure. But are they true in our industry?
Statistical data on R&D spending in the Canadian glass construction industry is hard to come by. But everywhere you look, companies seem to be coming up with new products, new ways to apply old products and new processing methods. One example is All Weather Windows in Edmonton, Alta., which made significant investments in four-point welding technology and a number of process innovations to produce its V-weld window design. The V-weld system does away with mechanical mullions, gaskets and sealants to produce a one-piece, welded frame, even for combination windows. Then there is Garibaldi Glass in Burnaby, B.C., which actually built its own ceramic frit screening machine to expand its capabilities in the architectural glass market and meet the requirements of the marine glass work it was contracted for. Vaughan, Ont.-based Tiltco’s owners travel the world looking for new technology to bring home, and found an extruder capable of producing PVC profiles strong enough to not need steel reinforcing even in very large applications. Drier Wall Works in Caledon, Ont., has come up with a window wall system that performs comparably to an insulating glass unit without using sealed units that depend on exterior seals. Agnora, a Collingwood, Ont., glass fabricator, has built a dedicated R&D lab to explore ways of building ever-larger laminated glass fabrications. Another Vaughan fabricator, Euro Vinyl, just launched a pinless screen product. It seems like you can’t swing a cat in the Canadian glass construction industry without hitting someone who is trying something new. Why are we bucking the trend?
It may be because fenestration manufacturers do not always do R&D the way governments and statisticians expect them to. Derek Lukala, technical sales manager at Tiltco, explains his company’s process: “We see what needs to be developed and where our products need to be advanced, whether it needs to be esthetics or performance or different applications for architecture, then from there we all kind of brainstorm. From that process we get into design on our end, then we see if it can be manufactured and then you have a new product. Before we release it to the marketplace, we’ll go through testing for structural, air, water and thermal. We tend not to try to start anything from scratch – it is usually a refinement of our existing products.” So Tiltco uses a collaborative, problem-solving approach combined, as mentioned above, with discoveries the owners make as they travel around the world.
Not exactly a laboratory environment with bubbling beakers and researchers in white coats. And the process is incremental and evolutionary – at what point does a change to a product become “innovation?” Each tiny tweak to one of Tiltco’s profiles probably does not count as such, but over time those tweaks add up to very different, proprietary designs. Tiltco’s process is also hard to gauge with traditional measures because there is no dedicated budget for R&D. “There is a certain amount we know we will have to spend to certify something,” Lukala explains, “so we take that into account always.”
This is probably how product development happens most frequently in small and medium-sized companies in our industry: a problem-solving approach that is part of the everyday culture of the organization, rather than something that anyone does as a task. “We don’t have a research and development department or program,” Lukala says. “We just set aside some time in our weekly meeting to talk about different products. We just kind of bounce ideas off each other.”
Lukala says existing government assistance schemes for R&D do not work well for Tiltco. “We are not a big company and we do not have an accountant to take a week to go through all the paperwork,” he says. “We have done it a couple times but nothing ever comes to fruition even though we are pretty technologically advanced in our field. We just don’t have a big accounting department where we can say ‘For the next week, all you are doing is filling out paperwork.’”
R&D is often the pet project of a senior person in the company who has a flair for that kind of thing. At Garibaldi Glass, one of the three brothers who own the company, Chris Mobius, has the title vice-president of operations and spends most of his time concentrating on the equipment and processes of this architectural glass fabrication plant. When the company began to work in marine glass, it needed to develop its abilities to apply ceramic frit to meet the tough vibration-resistance and water-ingress requirements for boat windows. Chris, with the help of knowledgeable employees, actually built Garibaldi’s first frit application machine using the design of a silk-screening table. The expertise developed in that project has enabled Garibaldi to grab high-profile architectural projects all over the world. Again, not something that appeared in any budget, nor even a project for which any person was specifically tasked. It was just something Garibaldi did, because it needed to be done.
Governments at all levels say they want to assist Canadian SMEs to innovate, but Tiltco’s experience is all too typical. Assistance seems attracted to easily measured, clearly defined R&D departments with ongoing budgets and dedicated personnel. Absent these characteristics, a mountain of paperwork awaits leading to an interminable waiting period with no attractive chance of success on the other side. Tax credits have long been a favourite way for governments to encourage R&D, but applying for them can be so arcane that companies sometimes have to hire consultants to do it. Plus, the studies show that tax credits are producing little or nothing in the way of real innovation activity in most of the companies that claim them.
One initiative, however, looks like it might work better for the way the average glass fabricator develops new products. We have seen that innovation in the glass industry is not about projects or departments or budgets, but about people. Innovative people lead to innovative companies. The National Sciences and Research Engineering Council of Canada (NSERC) offers programs through its three-year-old Strategy for Partnerships and Innovation that help companies work with universities and colleges to conduct research and to hire graduate and undergraduate students. There are a few different ways the assistance can work, but generally companies can either partner with a university or college department to collaborate on some research (this generally takes the form of the company funding research by a professor or doctoral student, then having intellectual property rights on anything discovered) or by having undergraduate students in a relevant discipline join the company to work on a specific problem or challenge. All Weather Windows has done this, and Banman is a proponent of the strategy. “I think it is important to fund the students so they can learn and so they can apply theoretical knowledge on an actual job,” he says. “It makes total sense to me because when some of them come and become regular employees, the already know the work. I don’t really know the most efficient way of applying government money, but this one certainly seems focused and gets people into the industry and gets them jobs. If they do the work well enough, they can almost automatically work themselves into a job.”
An example of how NSERC would work would be a company approaching the program with an idea to work with an academic research team at a university to try to develop an idea for a new kind of thermal break in a PVC profile. “We require them to describe the problem and hoiw they are going to be working with this team,” Barbara Muir of NSERC explains. “We get the response to them fairly quickly – we try to do it in four to six weeks. In order to lower the risk for the company, we pay for the entire thing: $25,000 for six months and that goes to the university or college. It is about solving the company’s problem.” Opportunities exist for further funding and collaboration if the initial effort is successful. Or, companies can go through NSERC to get assistance with the cost of hiring students. “We will actually pay for the joint salary of an undergraduate to spend four months in the company as an employee to work on a particular R&D project,” Muir says. “It can’t be regular testing for compliance purposes or testing of a product; there has to be an element of the unknown, it has to be a research project. We will pay for $4,500 and the company must pay at least $1,250 of the student’s salary for four months. We are trying to get undergraduates that experience in a company setting with an R&D project.”
One thing that might recommend NSERC to glass industry companies is its apparent culture of customer service. It has regional offices in each region of the country and promises swift answers to project proposals – usually within a month. Muir says advisors at the regional offices will answer questions from company owners about the program and provide ongoing assistance with planning and applying for the aid. The development of the program followed extensive consultations with manufacturers across the country, and NSERC seems eager to avoid the pitfalls of delay, rejection, confusion and extensive paperwork that have plagued R&D assistance programs in the past. Money spent on NSERC partnership projects is usually eligible for Scientific Research and Experimental Development (SRED) tax credits.
Our industry enjoys a strong culture of innovation already, but not one that lends itself easily to the various government attempts at assistance. Maybe NSERC can succeed in sparking even more research and development in the Canadian glass construction sector.