Creating successful R&D proposals to benefit small and medium enterprises
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1 Creating Successful R&D Proposals to Benefit Small and Medium Sized Enterprises. Peter Rosenthal, ing., M.B.A November 2, 2016
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Transcript of Creating successful R&D proposals to benefit small and medium enterprises
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Creating Successful R&D Proposals to Benefit
Small and Medium Sized Enterprises.
Peter Rosenthal, ing., M.B.ANovember 2, 2016
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Objectives
Define importance of SME InnovationPresent structure and contents of R&D proposalsDescribe best practices related to project definition
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AgendaIntroductionInnovation in CanadaWhat is R&D?Eligibility for FundingThe R&D ProposalTest CasesR&D Support Programs in CanadaConclusionQ&A
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Introduction
Peter Rosenthal• Mechanical design engineer• Industrial Technology Advisor for NRC-IRAP• Program Manager in Avionics Industry• Clients: Airbus, Boeing, Eurocopter, Thales, DND, USAF, Bell Helicopter,
Lufthansa, Qatar Airlines• Sub-contractor Management• Operations Management and PM instructor• Six Sigma Black Belt• Education: B. Eng., MBA (McGill, JMSB)
Introduction
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Some of my R&D ProjectsIntroduction
Introduction
What is innovation?“Application of better solutions through more effective products, processes, services, technologies or ideas”
Introduction
Why innovate?• For business growth
• Product improvement• New products and processes
• To remain competitive• Competitors are innovating• New business strategies
• To empower employees• Innovation requires creativity from
personnel
Innovation in Canada
Top Canadian Industries
Energy Manufacturing Aerospace
IT
Agriculture
Services
Importance of SMEs• 1.2M Businesses in Canada• 1.15M are Small and Medium Sized Enterprises
(SMEs)• SMEs are defined as 500 or less employees
Large Firm (0.5%) SME (99.5%)
Innovation in Canada
• Small & Medium sized Enterprises (SMEs)– Comprise the vast
majority (99.5%) of employers
– Yet, accounted for only 50% of R&D expenditures
• Lack of R&D expenditure directly impacts firms’ ability to innovate
• SME R&D declining (2011-2013)
Percentage SME in Quebec (Ref. Industry Canada)
Small -98%
Med-1.5%
Large-0.5%
What are the challenges impacting innovation?
Innovation in Canada
Key challenges faced by SMEs that limit Innovation:1. Lack of financial resources2. Resources have no or negative capacity to work
on R&D projects 3. Projects in high technology are complex and
risky4. Lack of skilled technical workers and resources
Innovation in Canada
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What is R&D?
“…activities a business conducts to improve existing products …or lead to the development of new products” (Ref investopedia.com)
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Technology Readiness Levels
TRL 1: Basic principals of concept observed
TRL 2: Practical applications defined
TRL 5: Basic technological components tested in a simulated environment
TRL 4: Validation in a lab environment
TRL 3: Analytical and experimental lab studies
TRL 6: Prototype demo in simulated environment
TRL 7: Prototype demo in actual environment
TRL 8: Actual technology completed and qualified through demonstration
TRL 9: Actual technology successfully deployed in an operational setting
Concept
Demo
Prototype
Preliminary R&D
Commercialize
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Eligibility for Funding
For Profit?Incorporated in Canada?
Firm Size? Capacity for R&D?
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The R&D Proposal
Important Notes: 1. Contact your Advisor, Local Rep to discuss your project and funding programs before writing the proposal
2. There are many Federal, Provincial and Municipal financial support programs. Please check with your rep for specific guidelines
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Proposal Contents
1. Your Firm2. Your Business and Opportunity3. Your Project4. Budget5. Financing6. Impact7. Declaration
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Your FirmLegal Status, CRA, Address, Inc, For ProfitOwnership and Management StructureHead OfficeHistory of Management TeamContact Info
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Your Business
• Overview – Describe your:• Main products and services• Main customers• Main competitors• Business plan
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SalesProfitMarginCOGSPayback
The OpportunityTarget Market
Fit with Trends
Market Growth
rate
Barriers to entry
Timing
Clients:
ProfileBenefitsSocial issuesResearch done to date
IP
Risks
CompetitorsSWOT New Tech
Advantages
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Your Project
Summary
• Title• Description• Duration
Objectives
• Quantifiable• Measurable• Aligned
with project activities
TechnologyEnvironment
• Project innovations
• Solves what problem?
• Why select this tech?
Challenges &Uncertainties
• Technological uncertainties?
• Risks• Mitigation
plans
Activities
• Gantt• Milestones• Critical path• Methodology
Ethical and Environmental Considerations:• Human or animal experimentation requires approvals• Specify environmental protection method if required
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Proposal: Budget
• Senior management typically not included (in overhead)
• Include contractors here• External sub contractors
• Materials• T&L, Machines
• Total project cost including overhead
Direct Salaries
Sub-contractor Costs
Other Costs
Summary
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Proposal: FinancingCapacity to finance your part of the project
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Proposal: Impact of Contribution
The Firm GlobalCanada
• Hire qualified resources• Accelerate development• New know-how• IP• Broaden the scope of the
project
• Increased Employment• Increased R & D
Expenditures• Development of New
Products• Social Benefits
• Increased Safety and security
• Reduced carbon emissions• Environmental
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Proposal Contents
1. Your Firm2. Your Business and Opportunity3. Your Project4. Budget5. Financing6. Impacts7. Declaration
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Test Cases
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New Energy Source
The Firm: Well established machine shop, $20M annual sales, profitable
Finances: $500,000 cash available
Technology: Perpetual motion water pump
Business Case: Endless Source of Energy
GO/NO-GO?
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Solar Rechargeable Batteries
The Firm: 2 year old SME, 3 employees$100K annual sales in technical consulting (electronics), almost profitable
Finances: $10,000 cash available
Technology: Consumer batteries (AA, AAA, 9V that canbe recharged by sitting discharged batteries in sunlight)
Development cost: $100,000, 12 months
Business Case:3 billion batteries thrown away every year
GO/NO-GO?
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Low Cost Composite Vehicle ChassisThe Firm: World class manufacturer of composite structures for aircraft, SME, 25 years incorporated
Finances: $10M annual revenue, profitable
Technology: Lower cost composite materials based on aircraft recipe to develop lighter and stronger vehicle chassis
Business Case: Applies to gas, hybrid and electric vehicle designs, lower cost than metal, lighter saves fuel, stronger and safer
GO/NO-GO?
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R&D Support Programs (samples)
COM
MER
CIAL
IZAT
ION
INCREASING INDUSTRY INVOLVEMENT/FUNDING
TRL 9
TRL 1
PRODUCTS
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Summary• SME Innovation key to Canada’s Economy• R&D Proposals need well defined project,
business case and align with the firm competencies
• Advisors can help you find the right program and prepare proposals
• Many support programs available for R&D at every TRL
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For Further Information• [email protected]• (514) 396-8800 ext :7806• IRAP: 1-877-994-4727• NRC Concierge: 1-855-53-GUIDE
Merci!Questions?
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