Frequently Asked Questions

What’s the rationale behind business-university R&D partnerships?

Strengthening the connection between knowledge and entrepreneurship

Undeniably, Quebec’s prosperity depends on increased productivity and competitiveness through innovation. Research and development is a first key step in the process of innovation, and occurs prior to commercialization activities. Yet it is often quite challenging for our businesses, especially our SMEs, to devote themselves adequately to R&D while executing their business plans at the same time. And nowadays, even large companies acknowledge that they cannot always avail themselves of the full range of internal skills required to ensure that their R&D activities will lead to timely innovative results, enabling them to face global competition by offering new, highly value-added products and services. The shortage of highly qualified labour in Quebec, a situation which is likely to increase in the future, only makes it more complex for businesses to take up the innovation challenge and for Quebec to increase its prosperity.

On the other hand, our universities, whose mission is to train people, have an abundance of skilled people and R&D infrastructures. And we too often forget that one of the main advantages of university research is to achieve this mission of training highly qualified personnel, particularly at the postgraduate levels (in addition to traditional training at the undergraduate level). Business-university R&D partnerships offer a very promising solution for increasing the innovation capacity of our businesses, accelerating their R&D cycles, training the highly qualified personnel that businesses so urgently need, ensuring a better match between their needs and university skills, and thereby ultimately increasing the return on our public investments in R&D.

Is the money granted to Prompt by the Quebec government for business-university partnerships used to subsidize businesses?

No. The money Prompt receives from the Quebec government is used to give research grants to the university community. Not one dollar of the money that Prompt receives is given to businesses, in any form whatsoever.

If Prompt’s grants are destined to the university community, what are the benefits for businesses?

Prompt’s research grants are given to universities in order to create research partnerships specifically geared to the needs of businesses and requiring the active participation of the latter, along with a condition that businesses contribute at least an equal amount of money to the universities as Prompt does. This private investment in the university community then enables universities to obtain additional funding, once again equal in value, from the government of Canada. Thus, businesses receive, for R&D research undertaken on the basis of their needs, a financial leverage ratio of 3 to 1, which can reach up to 7 to 1 when R&D tax credits at both government levels are factored in. Businesses also reap the benefits mentioned above, namely, an increased capacity for innovation by accessing university skills and infrastructures, as well as needs-targeted training of highly qualified personnel.

What are the benefits for the taxpayers of Quebec?

Education is a cornerstone of prosperity in every society. To ensure postgraduate university training, the government subsidizes university research in the same spirit with which it offers financial support to education at the undergraduate level. Thus, it is advantageous that part of this taxpayer-funded financial support for university training and research be geared towards the needs of businesses and that in doing so, we stimulate their investments to support these activities.

Prompt’s initiative aims to increase private investments in R&D, either by enhancing these types of activities for businesses already involved with universities, or by creating university connections for businesses who have weak R&D activities and/or who have never worked with universities. Since 2003, an investment of the Government of Quebec totalling $24 million and resulting in projects having a value of nearly $130 million within the institutional research setting. In addition to this direct financial leverage, the return on public investment in research is ultimately increased by the enhanced capacity of businesses to innovate.

Without business-university R&D partnerships such as those initiated by Prompt, wouldn’t it be possible for businesses to undertake good innovation projects?

Yes, but not in Quebec (or certainly, to a far lesser extent). To attract and retain the presence of multinational businesses in Quebec, we cannot bank on the size of our market, which is tiny with respect to the markets of the U.S. and Europe or even with respect to the large growth markets in emerging economies where, in addition, a qualified labour force is increasingly available at a lesser cost than here. In Europe and China in particular, public investment in research is huge and multinationals are positive about the potential of getting involved in such initiatives. On a similar note, our SMEs find it increasingly difficult to compete in terms of the speed of innovation cycles (if they embark in the first place). The only thing we can count on is excellence, through a closer bond between knowledge and entrepreneurship, which will give rise to an increased capacity to innovate, resulting in highly value-added exportable products and services. Thus, Quebec has to effect a cultural change so that our entrepreneurs may rely more and more on knowledge, and so that those who possess knowledge may stimulate a greater number of entrepreneurial activities. Such a cultural change has, to a certain extent, been initiated by groups such as Prompt or the École de Technologie Supérieure, where R&D receives more than 50% of its funding from the private sector. But we have to do a lot more in order to reach the level of the business-university connection that can be seen in countries such as Germany, which, through no coincidence, is the economic engine of Europe.

By strengthening the bonds between businesses and universities, such as those stimulated by Prompt, aren’t universities reduced to simple sub-contractors for businesses, and doesn’t this lead to a commercialization of higher education?

No. In the context of business-university R&D partnerships, universities are not simply executing orders given by industry. The transfer of technologies and knowledge is truly bilateral. Industry partners share with universities an approach to R&D that derives from a commercial point of view while innovative ideas that business innovations depend on frequently find their sources in universities. Moreover, since universities are places of learning and thinking that have a socio-economic dimension in addition to a technological one, the business-university dialogue can have a positive influence on businesses’ sense of social responsibility.

Are non-university research centres, like CCTTs (College Centres for the Transfer of Technology) and other public research centres eligible under the Prompt program?

Yes, absolutely. Prompt’s funding program is open to college, university and other research.