2019–20 Annual Report Innovation Unleashed
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2019–20 AnnuAL REPORT Innovation Unleashed Contents 4 Message From Our Board Chair 40 GOAL 5 Be recognized globally as a leading innovation engine. 5 Message From Our CEO 44 InnoTech Alberta 6 Accountability Statement 50 Management Discussion & Analysis 7 Executive Summary 52 Management’s Responsibility for Reporting 9 Annual Report at a Glance 53 Statutory Report 11 Context and Outlook 54 Audited Financial Statements 13 Results & Achievements 78 Report on Risk Management 16 GOAL 1 Making the lives of Albertans better today and for generations to come by contributing to a 80 Appendix A diversified economy, cleaner and sustainable Tech Comm Scorecard environment, and healthier communities. 23 GOAL 2 82 Appendix B Cultivate a world-class research and innovation Outcome Survey Results system that meets the needs of Alberta. 83 Appendix C GOAL 3 29 InnoTech Alberta Drive the generation of discoveries and developments that positively impact Alberta and its industries by leveraging partnerships, 87 Appendix D collaborations and emerging technology platforms. C-FER Technologies 34 GOAL 4 Accelerate and broaden the use of innovative products, technologies and processes. 4 ALBERTA INNOVATES Annual Report 2019–20 Despite financial and budget constraints and the pandemic Message from setback, our partnerships and focus on performance impact yielded results: every dollar that Alberta Innovates has invested in small and medium enterprises (SMEs) has been leveraged the Board Chair through other sources, generating $7.37 in SME net revenue growth, and $23.50 in follow-on investment (78 per cent from private funding). SMEs supported through our vouchers and related programs have seen an increase in job growth by 11 per cent. Through our system-level approach to innovation, we connect partners across sectors and industries. We help them identify and test solutions to improve their environmental performance and success in their markets. Alberta Innovates holds unwavering confidence in the advantages presented in five areas that leverage Alberta’s unique strengths and tap global opportunities in areas that will not be easily commoditized: • Digital health technologies and artificial intelligence can speed up improvements in quality and long-term Brenda Kenny PhD sustainability of health systems at home and worldwide. • Smart agricultural technologies and expertise are leading to more sustainable and efficient production and processes, Though Alberta faces difficulties, generating jobs and better food security. • Natural materials for carbon fibre and other innovative our investment in innovation hydrocarbon products are plentiful in Alberta and have an added economic potential of approximately $84 billion continues to pay dividends. annually – three times the revenue of our current bitumen output. Our corporation came through a year of change even more • As a leader in artificial intelligence Alberta ranks in the top three international centres for machine learning, a field strategically focused, operationally aligned and organizationally estimated at up to $16 trillion in global economic output over resilient. Fiscal 2019–20 marked Year 3 of consolidation and the next decade. Year 2 of the new strategic plan and direction. We adapted and • A vigorous entrepreneurial ecosystem is gaining strength adjusted staffing, structure and processes through the year with in Alberta, supported by micro-financing, business coaching a clear understanding that innovation lies at the heart of Alberta’s and an active venture capital market. Together with leading current and long-term economic interests. Implementation of our university partners, Alberta Innovates is creating a swift strategy was deliberate and driven to leverage the strengths and and seamless pathway to enable market commercialization improve performance of the province’s innovation system. sooner. A very challenging financial context through the first three quarters of 2019 became even more acute as the COVID-19 Now, thanks to the demonstrated scale and speed of pandemic gripped the province and the world in early 2020. As collaboration to contain and recover from the pandemic, the government shifts from pandemic response to economic re-entry, next big innovations will be within reach faster than ever. It’s the we understand that permanent changes have occurred. Jobs transformational opportunity of a lifetime and Alberta Innovates have been erased, capital spend has been paused and liquidity is well-prepared, both as a technical leader and as hub and is strained. Communities are gripped by uncertainty and every connector, to coalesce the innovation system and advance the aspect of global trade, markets and supply chains have been province’s ambitions on a global stage. Our drive for innovation in fundamentally altered. difficult times will lead to a strong and diverse Alberta. As bleak as this business context is, the pandemic also highlighted the amazing speed and power of innovation and collaboration across borders – from tracking outbreaks to rapid research into treatment and control. New consumer preferences, retail realities, health-system practices and ecological insights are emerging. Though disruptive, the opportunities these present for Alberta are significant. ALBERTA INNOVATES Annual Report 2019–20 5 Innovation is key to economic growth and diversification, Message and that has never been more important than it is now. Regions and countries that get this – and which bring public and private sectors, knowledge and natural resources together seamlessly from the CEO and swiftly – will command advantage in the borderless marketplace of the post-pandemic world. The effects of the economic downturn and the COVID-19 pandemic were being fully felt in Alberta at year-end. This, combined with deep budget cuts over several years, resulted in a reduced workforce and a tight operating budget, and required us to rethink our programming. Nonetheless it did not diminish our resolve to deliver high-impact results for Albertans and the details are outlined in this report. We found new collaborators and funding sources, formed new industry partnerships and leveraged pan-Canadian networks to drive transformative innovations: • Advanced hydrocarbons and an advanced manufacturing sector focused on non-combustion, bitumen-derived products such as carbon fibre, activated carbon and asphalt binders for Laura J. Kilcrease global markets; • The Canadian Agri-Food Automation and Intelligence Network focused on improved crop and food production Alberta Innovates is the system-wide by bringing together agriculture, manufacturing, food processing, data and analytics, and pure technology; and innovation engine for thousands • Digital health platforms for better-quality patient care and cost-savings to the health-care system, enabled by the of researchers, entrepreneurs, unprecedented amounts of data in Alberta’s integrated provincial health-care system and a population of sufficient industry partners and investors. size that allows us to test solutions. We are the catalyst, convener These are game-changing initiatives that will bolster the economy of Alberta while creating long-term opportunities and performance optimizer of at scale for Albertans. Let me close with a comment about our signature event – a system that encompasses all Inventures – which, in only its second year, drew some 4,000 people economic sectors. from 32 countries, and included 235 speakers, and 66 start-up and student pitch events, delivered across six tracks and more than 100 sessions. Though vitally important, the engine is often hidden from view A PricewaterhouseCoopers assessment estimated that and you don’t really think about how it is getting you from one between $116 million and $249 million of GDP footprint in Alberta destination to another. Alberta Innovates acts in much the same way. could be attributed to business transactions at Inventures. We put our expertise, facilities and funding to work behind Inventures puts a spotlight on what Albertans are capable of. the scenes so our partners and clients can achieve breakthroughs This report is as much their story as it is our annual performance that activate Alberta’s economy in the short, medium and long update. Innovation has created tremendous wealth in the past term. Our impact gains visibility through the successes of for Alberta, and Alberta Innovates will continue to drive the those we work with – from researchers in university labs to collaboration and innovation that will create wealth in the future. entrepreneurs who use our programs to take their ideas from start-up to scale. Their testimonials tell our story. One illustration of the value generated through our strategic programs and services is that more than 60 per cent of early- stage technology start-ups in Calgary were supported by Alberta Innovates. Our annual survey showed that our support contributed to an 87 per cent survival rate among small-to- medium enterprises. And, this enabled nearly 2,400 jobs to be created by 631 SMEs we funded between 2015 and 2019. 6 ALBERTA INNOVATES Annual Report 2019–20 Accountability Statement The Alberta Innovates Annual Report for the year ended March 31, 2020, was prepared under the Board’s discretion in accordance with the Alberta Research and Innovation Regulation, and the ministerial guidelines established pursuant to the Alberta Public Agencies Governance Act (APAGA) and the Fiscal Planning and Transparency Act. All material economic, environmental or fiscal implications,