From: pkinkaide <pkinkaide@shaw.ca> Sent: Friday, November 9, 2018 2:53 PM To: Engages-Mobilisation (WD/DEO) <wd.engages-mobilisation.deo@canada.ca> Subject: Western Canada Growth Strategy Information Conference Call - Friday November 9

Hmm..no moderator arrived for the 12pm MST Conference call today? Perhaps it was oversubscribed. Regardless, here is our contribution:

1. About the Alberta Council of Technologies Society - see brochure attached.

Mission. Creating the New Alberta through innovation - the commercialization of emerging technologies.

Vision. A more resilent/ diversified Alberta economy

2. Initiatives:

A. Financing development of alternative energies including the pathway to fusion energy and associated industries. Report attached

B. Engaging youth - the future of work. Ensure education and post-secondary are listening to the voice of youth. Report attached, recognizing the impact of machine learning and biotechnology.

C. Monitoring progress in economic diversification and development of an effective innovation ecosystem - Report attached

D. Fixing the broken public procurement practices and policy objectives - Report attached

E. Acknowledging that Vision and Leadership is the primary impediment to economic development and that the survival, growth, and retention of SMEs undervalues the relevance of strong relational skills - Report attached

F. Recognizing the beginning of the end of the knowledge economy - of particular relevance to the future of the professions - Report attached

G. Preparing for the impact of international protocols for the valuation of intangible assets and continuing decline in tangible commodities. For more contact TechInvest.

H. Giving priority to advancing the development of western Canada's industrial hemp industry

I. Also giving priority to the relevance of data, diagnostics, and determination in the personalization of heathcare so as to effect a transformation from capacity building to market responsive services

J. Moderating government intervention in social engineering

K. Recognizing that Canada's raw carbon economy is in rapid decline

L. Incentivizing the consolidation of NGOs - of which there are over 23,000 in Alberta alone impeding change and the formulation of public policy.

2018

Creating the new Alberta!

Mission. Technology is changing everything. Prepare the people -

Education. Prepare the community – networking. Strengthen

Alberta’s innovation ecosystem

Vision. A resilient, economically diversified Alberta

www.ABCtech.ca

The Alberta Council of Technologies Society (ABCtech) advocates for “Creating the new – more resilient Alberta!” – diversifying Alberta's economy through technology. Central to our value proposition is a bi-annual report on Alberta’s economic resilience and the effectiveness of its associated innovation ecosystem. Our constituency has grown to over 20,000 individual followers, over a dozen Alliances and hundreds of enterprises sharing an interest in creating the new Alberta through the commercialization of emerging technologies. Each receive our periodical - QuikTech Notes. Our 2017 Festival of BIG Ideas was a follow-on to our 2016 and 2015 Conference series “Convergence & Creativity” and 2016 Convention in Red Deer “Creating the new Alberta!” surfacing BIG and VERY big ideas from Alberta industries and professions that would contribute to diversifying the economy Projects underway in 2018 include: Going Global – developing innovation exchanges with Europe and Asia; Engaging Youth – Alberta students involved in a dialogue about “the future of work”; Media Productions – blogs of articles and stories of Alberta innovations and innovators; Network Development – as we continue to build Alliances with industries and professions sharing a common interest; and Banking the Future – establishing and Alberta Credit Union and Technology Investment Fund for Alberta innovations. Our annual themes for increasing public awareness and developing networks of common interests:

Access to Capital Advisory (2005)

Rural Broadband Society (2006)

Alberta/Canada Fusion Energy Program (2007)

Alberta CleanTech Industry Alliance (2008)

Alberta Cell Therapies Alliance (2009)

Electrifying Transportation (2010)

ABCampus - Student enterprise (2010)

Off-loading Intelligence - When machines decide! (2011)

Alberta Analytics, Big Data, and The Cloud (2012)

Innovation & Enterprise - The People. The Passion. (2013)

The Missing ‘M’ in SME - Why SMEs fail to grow (2014)

Convergence & Creativity - Engineering Innovation (2015)

Creating the New Alberta! - Vision & Leadership (2016)

Transitions (2017)

(2018)

ALBERTA COUNCIL OF

TECHNOLOGIES SOCIETY

ABCtech – founded in 2005, is an unfunded

Society of dedicated volunteers, governed

by an exceptional Board of Directors.

DIRECTORS – 2018

Special Interests

EXECUTIVE Klaas Rodenburg - President, Edmonton

Energy & Knowledge Management

Alexander Suen - Vice President, Edmonton

Student Representative

Randy Duguay – Secretary, Edmonton

eHealthTech & Artificial Intelligence

Kewal Dhariwal – Treasurer, Edmonton

Blockchain & Secure Data Exchange Perry Kinkaide – Founder, Past-President, & CEO

Edmonton. Public Policy

Shirley Mitchell - Edmonton

Entrepreneurial Leadership

Derrick Rancourt - Calgary

Biotechnology & Cell Therapies

Ken Bainey - Edmonton

Infotech & Performance Management

Don Diduck - Edmonton

Labour & Aboriginal Business Development

Peter Fenwick – Calgary

Healthcare

Paul Pryce – Calgary

Agriculture & Asian Relations

Haley Simons – Edmonton

Education & Creativity

Doug Firby - Calgary

Media Relations

Sharon MacLean – Edmonton

Marketing & Communications

Robert Hubbs - Calgary

Infotech & Cyber Security

Susan Carlisle – Edmonton

Clean Technologies & Rural Alberta

We'd like to know your story and how we might collaborate for helping one another. Contact – info@ABCtech.ca or TF 1(866)241-7535 or (780)990-5874

Special Interests of ABCtech's 20,913 Contacts* - Dec 31st, 2017

Totals

1 Education & Research 2193 2 Infotech & Analytics 1987 3 Government & Public Policy 1521 4 Energy & Distribution 1232 5 Finance & Investment 1038 6 Environment & CleanTech 971 7 Communications & Marketing 860

8 Management & Strategy 854 9 Health & BioTech 817 10 Tourism & Entertainment 766

11 Engineering & Design 695 12 Construction & Real Estate 605 13 Volunteers & NGOs 560 14 Human Resources & Development 460 15 Legal & Security 398 16 Transportation & Logistics 353 17 Agriculture & Food Processing 317 18 Manufacturing & Export 263 19 Forestry & Wood Products 152

* Individuals may have multiple interests

Our Alliances – demonstrating collaboration in "Creating the new - more resilient, Alberta!"

HOW TO HELP ABCtech

PEOPLE … you are the source of ABCtech's influence and innovation, sharing

our vision of Alberta as a new, more resilient economy achieved through the commercialization of emerging technologies. Member Benefits include: voting and learning, our newsletter, event discounts and pan-Alberta networking. Register - $100 ($25 Students and Seniors) per year at www.ABCtech.ca

PROJECTS … organizations help us advance market development through

public education, influencing policy formulation, and addressing impediments for advancing the commercialization of emerging technologies. Opportunities for co-hosting and sponsoring include: our AGM/BBQ, QuikTech Notes, Networking events, Position Papers, Consultation Surveys/ Studies, and ABCtech Media Productions. Ideas for collaborating and co-hosting are welcome! We are seeking co-hosts for: continuing the dialogue on how to increase the economic resilience and sustainability of Alberta’s economy, increasing our reach into new jurisdictions and continuing a discussion on the roles of NGOs, industry, and government in advancing the cause.

PATRONS … are the foundation for sustaining ABCtech and setting our

strategic direction. Corporations, foundations and hi-wealth individuals with a vision of Alberta’s future may consider … Contributing funding and/or secondments and serving on ABCtech’s President’s Advisory proposing our annual themes and advising on the Society’s strategic direction.

For more contact – info@ABCtech.ca

Contact info@ABCtech or phone TF – 1(866)241-7535 or local (780)990-5874

160717 Fusion 2030 project funding (in addition to capacity building proposal) The goal of the focused 5 year program is to investigate the critical techology and scientific issues to define the best routes to laser fusion energy. At the end of the 5 year program it should be possible to select one or more routes to inertial confinement fusion and proceed to a design of an engineering demo reactor for small scale power production. The critical areas to be addressed over the next 5 years are: 1. Laser driver development ($10.7M) 2. Advanced 3D modeling of laser-plasma interactions and fusion targets ($8.2M) 3. Advanced Shock Ignition scheme - proof of principle experiment ($12.4M) 4. Advanced Fast Ignition scheme - proof of principle experiment phase 1 ($19.9M) 5. Development and testing of fusion reactor materials ($28.1M) The total development would be from $31.3M to $79.3M if 3 to 5 of these projects are pursued. Part of the costs can be reduced by orienting some of the capacity development project to one or more of these projects areas. Probably of the order of $3M to $5M could be saved by integrating with the capacity devlopment projects. The goals of each project area is described briefly together with an approximate budget in the following pages.

1. Laser Driver Development (5yrs, $10.7M) Laser driver technology scaled to the 10kJ per pulse at 10Hz repetition rate is critical for building laser fusion systems and many upcoming high energy / high intensity laser applications (such as laser shock hardening of tool surfaces for increased lifetime) Project goals: 1. Develop 100J 10Hz repetition rate high efficiency diode pumped laser for technology demonstration and applications in materials processing such as laser shock hardening. 2. Develop 1000J laser at 1 shot per minute high efficiency diode pumped laser as laser driver for high energy plasma experiments and diagnostic devleopment for laser fusion projects. Personnel costs (for 5 years): 2 Research Scientists at $150k/yr $ 1,500,000 2 Engineers at $120k/yr $ 1,200,000 2 technicians at $100k/yr $ 1,000,000 2 graduate students at $25k/yr $ 250,000 $ 3,950,000 Capital Equipment Costs (for 5 years): Laser crystals: 5 x $100k, 3 x $40k $ 620,000 Pump diodes: 1.1MW at $2/W $ 2,200,000 Diode power supplies: 1.1MW at $0.25/W $ 275,000 Electroptic crystals: 1 x $50k, 2 X $20k $ 90,000 Deformable mirror systems: 1 x $100k, 1 x $50k $ 150,000 Optical components: 10 x $10k, 100 x $1k $ 200,000 Frontend 1J, 1 ns, 10Hz lasers: 2 x $50k $ 100,000 Cooling systems: 2 x $50 $ 100,000 Instrumentation (oscilloscpes, optical etc.) 10 x $50k $ 500,000 $ 4,235,000 Administrative and Operating Costs (for 5 years): Administrative Assistant at $80k/yr $ 400,000 Travel for meetings and conferences: 20 x $3k/yr $ 300,000 Machining costs: 2000/yr x $80/hr $ 800,000 Miscellaeous supplies $100k/yr $ 500,000 Space, 200 m2 at $500/m2/year $ 500,000 Utilities (heat, electricity, phone,internet) $10k/yr $ 50,000 $ 2,550,000 Total Project $10,735,000

2. Advanced 3D modeling of laser-plasma interactions and fusion targets ($8.2M) Project goals: 1. Develop 3D laser-plasma modaling capabilities for large scale modeling of laser plasma interactions for prediction and control of plasma instabilites leading to target preheat and cross beam energy coupling. 2. Develop 3D target hydrodynamic codes for modleing of target implosion and energy yield 3. Develop specialized 3D nonlocal energy trasnport codes to calculate shock generation with high intensity spikes foe shock ignition 4. Develop specialized 3D high intensity interaction codes to calculate MeV electron and proton generation and trasnport for Fast Ignition Personnel costs (for 5 years): 4 Simulation Scientists at $150k/yr $ 3,000,000 4 programmer analysts at $100k/yr $ 2,000,000 4 graduate students at $25k/yr $ 500,000 $ 5,500,000 Capital Equipment Costs (for 5 years): Computer workstations: 12 x $50k $ 600,000 Computer cluster (400 core): $400k $ 400,000 $ 1,000,000 Administrative and Operating Costs (for 5 years): Travel for meetings and conferences: 20 x $3k/yr $ 300,000 Supercomputer time: 10,000 cpu-yrs x $100/cpu-yr $ 1,000,000 Miscellaeous supplies: $20k/yr $ 100,000 Space: 100 m2 at $500/m2/year $ 250,000 Utilities (heat, electricity, phone,internet) $ 10k/yr $ 50,000 $ 1,700,000 Total Project $ 8,200,000

3. Shock Ignition Demonstration Experiment (5yrs, $12.4M) The goal of th eproject is to collaboration with LLE, CELIA, CEA, LLNL on polar direct drive Shock ignition experiment – (modeling, target design, fabrication, diagnostic development, new optimized random phase plates) Project goals: 1 Investigate key issues around high intensity shock genration 2. Investigate key issues aournd hot electron generation and target preheat 3. Develop an optimal target design for polar direct drive shock ignition. 4. Field experiments on NIF using polar direct drive shock ignition Personnel costs (for 5 years): 2 Research Scientists at $150k/yr $ 1,500,000 2 Engineers at $120k/yr $ 1,200,000 2 technicians at $100k/yr $ 1,000,000 2 graduate students at $25k/yr $ 250,000 $ 3,950,000 Capital Equipment Costs (for 5 years): Diagnositc Devleopment: 1 x $100k/yr $ 500,000 Shared costs for new random phase plates (1/4 x $10M) $ 2,500,000 Instrumentation (oscilloscpes, optical etc.) 2 x $50k $ 500,000 $ 3,500,000 Administrative and Operating Costs (for 5 years): Administrative Assistant at $80k/yr $ 400,000 Travel for collaborative experiments $ 400,000 Shared costs for facility access (1/4 x $2M/yr) $ 2,500,000 Travel for meetings and conferences: 20 x $3k/yr $ 300,000 Machining costs: 2000 x $80/hr $ 800,000 Miscellaeous supplies $50k/yr $ 250,000 Space, 100 m2 at $500/m2/year $ 250,000 Utilities (heat, electricity, phone, internet) $10k/yr $ 50,000 $ 4,950,000 Total Project $12,400,000

4. Fast Ignition Demonstration Experiment - Phase 1 (5yrs, $19.9M) The goal of the project is to collaboration with ILE, LLNL and International partners on polar direct drive Fast Ignition experiment – (modeling, target design, fabrication, diagnostic development, short pulse beamline development). Conversion of up to 100 beamlines at the LLNL NIF facility will be required for the fast ignition driver pulses at a cost of around $300M. This project wil take ten years and the funding indicated here is for th efirst 5 years. Project goals: 1. Investigate key issues aournd MeV electron and proton generation and transport 2. Develop an optimal target design for polar direct drive fast ignition. 3. Field experiments on NIF using polar direct drive shock ignition Personnel costs (for 5 years): 2 Research Scientists at $150k/yr $ 1,500,000 2 Engineers at $120k/yr $ 1,200,000 2 technicians at $100k/yr $ 1,000,000 2 graduate students at $25k/yr $ 250,000 $ 3,950,000 Capital Equipment Costs (for 5 years): Diagnositc Devleopment: 1 x $100k/yr $ 500,000 Shared costs for conversion of beamlines ( $10M) $10,000,000 Instrumentation (oscilloscpes, optical etc.) 2 x $50k $ 500,000 $11,000,000 Administrative and Operating Costs (for 5 years): Administrative Assistant at $80k/yr $ 400,000 Travel for collaborative experiments $ 400,000 Shared costs for facility access (1/4 x $2M/yr) $ 2,500,000 Travel for meetings and conferences: 20 x $3k/yr $ 300,000 Machining costs: 2000 x $80/hr $ 800,000 Miscellaeous supplies $50k/yr $ 250,000 Space, 100 m2 at $500/m2/year $ 250,000 Utilities (heat, electricity, phone, internet) $10k/yr $ 50,000 $ 4,950,000 Total Project $19,900,000

5. Nanoscale fusion reactor material testing facility using high power laser-plasma targets ($28.1M) Project goals: 1. Develop 500 TW laser system. 2. Develop target systems for MeV electron, proton, neutron and gamma ray facility 3. Develop new materials and material analysis techiques (NINT) Personnel costs (for 5 years): 2 Research Scientists at $150k/yr $ 1,500,000 2 Engineers at $120k/yr $ 1,200,000 2 technicians at $100k/yr $ 1,000,000 2 graduate students at $25k/yr $ 250,000 $ 3,950,000 Capital Equipment Costs (for 5 years): 500 TW laser system: 1 x $15M $15,000,000 Radiation shielded bunker: 1 X $1M $ 1,000,000 Target Facility: 1 x $1M $ 1,000,000 $17,000,000 Administrative and Operating Costs (for 5 years): Administrative Assistant at $80k/yr $ 400,000 Travel for meetings and conferences: 20 x $3k/yr $ 300,000 Machining costs: 5000 x $80/hr $ 400,000 Miscellaeous supplies $100k/yr $ 500,000 Space, 200 m2 at $500/m2/year $ 500,000 Utilities (heat, electricity, phone,internet) $10k/yr $ 50,000 $ 2,150,000 NINT Costs (for 5 years): $ 5,000,000 Total Project $28,100,000

Engaging Youth Project II:

A White Paper on the Future of Work in Alberta

Prepared by: The Centre for Global Education Prepared for: The Alberta Council of Technologies Society

Date: August 2018

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Foreword Our youth are concerned. We know this because ABCtech, in partnership with the Centre for Global Education, engaged over 3,700 high school students from across Alberta in a dialogue sharing their hopes and concerns about the future of work, community, health and well-being, and – most powerfully – the Voice of Youth. This unprecedented discussion culminated in the following whitepaper created entirely by these voices of our youth. Troublingly, the loudest and most oft-recurring theme is their concern for the future. The title itself bespeaks a primary concern to “fit in”. The data conveys some discrepancy: When surveyed, the students are quite positive and feel at least a sense of control over their future, but deeper team reflection reveals a significant level of concern. “Instability”, “uncertainty”, and “precariousness” are recurrent refrains, and their questions beg not just answers, but attention. In this paper we hear these youth wonder “whose innovation may I become a part of”, rather than “how can I create an innovative solution or service or product which will impact myself, my community, and my economy.” We hear their desire for Alberta businesses gaining “access to new and emerging markets”, but interestingly, not “creating new and emerging markets”. There is much discussion around “workforce preparedness”, but there is only one call to “lead the charge to redefine our economy”. If we listen closely, this paper is really a cry for action. There is lament – almost a resigned acquiescence to an inevitable future dictated by technology, rather than viewing technology as the tool we control to create a better world. Should we really be ‘training’ our youth to “fit in” to an existing (and possibly soon-to-be obsolete) economic model? Or should we encourage an entirely new mindset: guiding and empowering them to create new pathways – and entirely new economies. If our youth simply can’t imagine beyond ‘entry-level’, we are faced with a glaring and frightening failure of imagination. The failure is ours, and the responsibility is ours to correct. This paper – this unprecedented dialogue – is a magnificent step toward this discovery. Clearly we are in early stages, but if ever there were a more worthy conversation and journey to embark upon, it is this. We invite you follow and support our work as we continue the dialogue across Canada in 2019, and globally in 2020. Our sincere thanks to our Advisory Team for their guidance, and to Servus Credit Union, ABCtech, and Perry Kinkaide for their generous financial support, without which these voices would remain unheard. Haley Simons Director, Alberta Council of Technologies Chair – Engaging Youth Project

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Where will our Generation Fit?

Prologue Between March and June 2018, hundreds of high school students from across Alberta came together to express their thoughts, questions, and concerns on the issue of the Future of Work in Alberta through video conferences, virtual classrooms, and online surveys. Under the guidance of expert mentors, the participating students collaborated on a 3-month learning project. They shared ideas, knowledge, and experiences, informed by their schools, regional cities, communities, and peers. This culminated in a final, real-time provincial dialogue focusing on the Future of Work in Alberta. In an effort to capture and capitalize on their shared passion, they co-wrote the following paper, Where will our Generation Fit? Within these pages, Alberta youth advocate and challenge Canadian educators, industry, and governing bodies to listen, engage, and respond to their questions, concerns, and calls for action.

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Welcome Starting in March 2018, our classes and student groups from across Alberta began an online journey to explore the impacts, issues, and potential opportunities facing Albertan youth as we look to the future of work in this province. Through common interest and shared enthusiasm in thinking about the future of our province, country, and humanity at large, we completed weekly assignments, created dialogue across blog posts, as well as communicated with one another through video conferences. Week-by-week our confidence in our ability to understand and challenge conversations around the future of Alberta, in our homes, schools, cities, and even our province grew. In our final meeting, we held a 4-hour virtual town hall that brought together over 200 students from across Alberta in real-time to explore our common thoughts on issues related to the future employment landscape, careers, and pursuit of rewarding livelihoods. We followed this with a provincial survey, collecting the opinions of 1950 Albertan youth on assessing student confidence in the future of work. This paper is a synthesis of the conversations, arguments, questions, and dialogues held by those 200 students over the course of two months. The importance of this work is reflected in the results of the survey of the general student population. Our survey shows that although students are currently feeling confident about their future, when it comes to thinking about their future careers, over 65% expressed notable concern. Three main issues came into focus as we discussed our questions around the Future of Work: Sources of Change, Global Trends & Sociological Implication, and Education & the Constant Demand for Change. These issues are serious concerns to all Albertan youth. Knowing that the consequences of inaction on these issues could be crucial to our - and everyone’s - future, we have outlined our calls to action. We ask you to read, consider, and then rise to meet our challenges and goals for the future of work in our province.

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I. Sources of Change

Digital innovation and Artificial Intelligence Through this project, We, the youth of Alberta, became increasingly aware of the ways in which digital innovation and Artificial Intelligence (AI) have become extremely pervasive throughout all aspects of our daily life and work, and how their prevalence will only grow in the future. These new technologies will not only replace many of the technologies we use today, but they will innovate how we work. AI and advancements in robotic technologies will have a major effect on jobs, careers, and the landscape of future workforces; impacting the techniques, workplaces, and the security of our employment. Consumerism and business also have significant ties to technology, affecting how goods are produced, how much they cost to the consumer, and how market forces and stakeholders interact. There is no question that the pervasive nature of technology has numerous ethical concerns, especially regarding personal privacy and data security. Dealing with these issues will be paramount to moving towards our understanding of the future, and our place within the future of work.

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AI, Careers, and the Workforce

“I predict that by 2030, automation, artificial intelligence and robotics will decrease the number of jobs and people in the workforce. Workers whose jobs are directly affected by automation, AI and digitization will need to search for alternative non-traditional employment. Whether it is temporal, freelancer or self-employed, these forms of jobs are unstable and increasing across Canada.” Milagros, Jasper Place High School, Edmonton

As stated by the project participant Milagros, in the quotation above, we understand that Artificial Intelligence, robotics, and mechanization will have substantial influence on employment and the workforce. We see the ways in which entry level jobs are in danger of being taken over by AI. Examples of this precariousness is the rate of self-driving cars overtaking taxis and even ride-hailing services. Administrative assistants may become unnecessary since people are able to complete many tasks online, such as making appointments and checking in.

“As for the workplace, I believe more simple jobs such as cashiers and sales associates will move towards AI. I don’t expect AI to fully take over the workplace but its presence will be significant. More complex professions that require a great deal of human interaction such as doctors, nurses, investigators, police officers, paramedics, teachers, counsellors (and much more) will still be present by 2030.” Jolene, Queen Elizabeth High School, Edmonton

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This also has implications for entry-level work in general - which can largely be covered by automated technologies. This low accessibility to entry-level work may be offset by high job availability in other fields, such as the programming and maintenance of new technology. However, an increased demand for highly specialized and skilled labour in repairs or supply-chain management, for example, would require corresponding experience and lengthy training programs to fill specialized roles. This shift to higher-skilled labour raises concerns for youth in Alberta around the availability of employment that allows for basic skill development and low-stakes risk-experiences within the job market for younger members of society just entering the workforce.

Our Questions: How will we be compensated (i.e. retraining) if we lose our jobs or opportunities to automation and mechanization? What solutions are there to creating entry-level opportunities should AI occupy them? How will we be assisted in matching AI productivity or finding/creating opportunities where AI is not advantageous? (Opportunities for entrepreneurship - specialized funding? Internships? Entirely subsidized education?) What opportunities exist outside of traditional education streams that could offset an AI driven workforce? What entry-level opportunities may still exist that will not require post-secondary education?

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Biotechnology We, the youth of Alberta, believe the future of work in the biomedical field is brimming with possibility, which may introduce a new sector into the Albertan economy. Biomedical engineering is where medicine, biology and engineering collide and work together to facilitate, improve, and advance healthcare. While some jobs will become obsolete with new advancements in this field, innumerable jobs will be created with this great economical change. In the last decade alone, Alberta has witnessed dramatic evolution in biomedical engineering technologies. The pace of innovation has accelerated quickly, and these advancements will allow us to live healthier and longer lives. This will significantly influence how we view our future in the workforce.

The biomedical field will be redefined by digital innovation making it more efficient and providing better care for people, yet also bringing up a number of questions related to ethics.

“DNA synthesis and modification is an idea that seems ideal in its pure essence. It has the purpose of creating genes (sic) to prevent diseases and conditions that may appear in the future, increasing the quality of life of not only a person but a nation.” - Milagros, Jasper Place, Edmonton

Many societal impacts will result from the application of biomedical technology. One way the biomedical field will impact our lives and future choices is through the field of genetic engineering and biomedical technology. Statistics Canada determined that “Canadians can expect to spend 70 of 80 years in good health”1, and yet, it is thought that biomedical technology and medical advances will continue to increase life expectancy. Increased longevity will allow us to spend more of our lives exploring multiple career paths, and pursuing our own personal interests and dreams; however, this may result in people choosing (or needing) to delay retirement and stay in the workforce for a longer period of time while likely seeking supplemental, low-training employment. We believe the speed of advancement in technology could impede older populations staying in or entering the workforce, but that this could be negated by retraining programs and opportunities for older populations.

Our Question: Where will ours and future generations fit into the possibility of an ever-aging, but continuingly capable, workforce? Will there be enough opportunity for all?

Biotechnology, Careers and the Workforce With the enhancements in biomedical technology, we want to consider this field in the context of the applications of this technology in the creation of new jobs and the loss of present jobs, and the training required for operation/maintenance of future careers. One consideration that concerns the youth of today is how will these enhancements impact sectors such as the medical field in terms of the demand for professionals? On one hand, there would be a demand for biomedical engineers to work in the increasing biomedical field. On the other hand, If people no longer (or in reduced numbers) experience severe or life-threatening illness and disease, there will be less of a demand for physicians, nurses, paramedics, and other

1 https://www150.statcan.gc.ca/n1/pub/82-229-x/2009001/demo/lif-eng.htm

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front-line medical personnel. However, the loss of these professionals could also create a loss of the emotional connection and bond that is essential to the patient-caretaker relationship that currently defines quality healthcare provision. Speculations about the future with the consideration of how technology will impact human interactions has been a trending topic throughout our discussions. With all these changes in the workforce, the education system will have to change to adapt alongside the advancements in biomedical technology. The rise of biomedical technology could also lead to increased health expenditure. Since people will live longer, they will put greater demand on the healthcare system by accessing life-prolonging technology, in addition to the stressors of a growing population of people accessing day-to-day healthcare professionals and services (podiatrists, physiotherapists, massage therapists, allergists, etc.) The increased government investment in the healthcare industry will have a financial impact on taxpayers, especially on the younger generations which are now outnumbered by the older ones. We, the youth of Alberta, worry how this future will financially impact us, compounded by prolonged lifespan, and changing job markets.

“In Alberta, the synthesis of DNA can help prevent diseases and open new jobs for specialists in the field, it might alter the DNA of people to make them better at their jobs or create new ways of understanding human evolution. The extension of the human mind with computers may create new ways of understanding human behavior...” - Andrew, Queen Elizabeth High School, Edmonton

We predict that the advancements in the biomedical field will lead to changes in the medical workforce, in addition to increasing the longevity of our lives with better healthcare. We may see a lengthening of our time working, and overall a better quality of life. The enhancements in the biomedical field also bring up the questions of how it will affect careers in the medical field such as physicians, nurses, paramedics, and other jobs. The biomedical field also has the potential to become a major contributor to the Albertan economy. However, we must keep in mind religion and ethics, and ask questions as to what point genetic modification is helpful, and at what point it is crossing a line. We all hope that the biomedical technologies will positively impact our daily lives.

Our Questions: How are schools and our current educational experiences preparing us for biotechnology and medical careers in the future? How will society be impacted by greater automation (de-personalization) of healthcare services? Will people be expected, required, or encouraged to enhance their biology to specialize and succeed in future jobs? How will the voice and ideas of youth be incorporated into these conversations?

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II. Global Trends and Sociological Implications

Globalization and Energy Diversification We, the Youth of Alberta, already directly experience the ways that the world is becoming more globalized. We feel that, ideally, Alberta would become a hub for identifying, designing, and producing complex and emerging technologies. In this way, Alberta consumers would have more access to goods produced around the world. Equally, Alberta businesses would have access to new and emerging markets. The risk is that increased globalization and mechanization will lead to a constant search for cheaper business costs, resulting in competition leading to cheaper goods. Alberta businesses, and the workforce they are recruiting, need to develop skills and adaptability that will allow them to be more creative and open-minded in how they approach consumers and also look outside the country to develop and sell their products. As the entire planet moves towards more sustainable ways of living, there is a great need to diversify the work we consider available in Alberta for international export. We need to redefine the focus of our economy to increase export and outreach for creative jobs. Under the Climate Leadership Plan, the Alberta government initiated the “30 by 30” renewable energy target. By 2030, 30% of the electricity that Albertans use will come from renewable sources such as wind, solar, and hydroelectricity, with the rest coming from natural gas. Beyond impacting Alberta’s environmental footprint, this change also affects industries and jobs as well. In a similar way, Alberta youth voiced the need to push for change, adaptation, and development. The youth in this project voiced an overwhelming support of renewable energy sector/market. If Alberta is able to prioritize demand and funding for renewable and sustainable energies, the economic and social dependence on coal and fossil fuels will diminish - a necessary and timely shift. In terms of how this shift to renewable energy affects jobs, accelerating interest in the alternative energy sectors will create more demand for jobs in the field such as solar panel installers, wind turbine installers, programmers, project managers, engineers, and wind farm developers. Education needs to transition and evolve parallel to these emerging markets. Job training and skill development needs to account for finding work in the renewable energy sector and its tangential career pathways. In terms of careers, with adequate education and readiness training, We, the youth of Alberta, believe strongly that the transition from the coal energy industry to the renewable energy industry will become easier and more palatable for the economy, the marketplace, the workforce, and, eventually, general attitudes and preferences. Given the primary role that the oilsands play and will continue to play in Alberta’s economy, it is integral that we find cleaner and less carbon-intensive ways to extract and refine the resources. In connection to this, the youth of Alberta are calling for ways to extract in more environmentally-friendly ways to ensure that our oil is the cleanest product produced. The potential risk of not addressing this issue is that people will hesitate purchasing natural gas supplies from Alberta in as large of quantities. When the majority of Albertan youth responded to our survey indicating that by the year 2030 emerging technologies will create entirely new careers, this includes the oilsands industry.

Our Questions: How are we being trained and skilled for careers in the energy sector of our future? Who will lead the charge to redefine our economy to increase export and outreach for creative jobs, marketing, advertising, entertainment industry, tourism, art, etc.?

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Ethics and Socioeconomics As our jobs become increasingly specialized and technology dependent, the demands in expensive specific training will inevitably cause a dramatic change. We, the youth of Alberta, are concerned that those who are considered within the lower income demographics of our society may feel increasingly marginalized, as they do not have the same access or financial means to receive the training necessary to find employment. The perpetuation and potential widening of this gap could further contribute to socioeconomic disparity, creating a future where only those wealthy enough to pay for training and education can secure employment. We do not see a near future in which we have shifted away from employment as a requirement for adequate income. Though society may eventually transition to a future with no/low employment and pursuit of creative and personal interests as the driving force, and universal basic income, we do not believe this will happen in our lifetime. We believe that this movement will be gradual, and that increasing reliance on technology provides the thought of this eventuality, but planning should be for our success within the realm of increased AI, and more advanced technology. The benefits of new technology should be embraced, including but not limited to: efficiency, precision, and better support to make work easier. However, as more technology is brought in, the world needs to anticipate and plan to transition from traditional notions of jobs to new ones. Job security needs to be ensured, so that lives aren’t destroyed in the name of profit. This is a concern, because as less jobs become available, there are more people without income. This could lead to a greater income disparity, and prevent those willing to contribute to society from doing so, instead forcing them to use up resources and live dependent on social services. Additionally, globalization brings its own sets of challenges. A market made more competitive by the integration of technology would not only present risks at home, but also internationally - this systematic globalization would mean that work does not necessarily have to be done in Alberta. If other countries can offer more affordable services with fewer questions asked, local economies will lose even more profits. This would present a plethora of ethical issues. Poor environmental regulations would allow for further environmental abuse and possibly set back conservation efforts, perhaps undoing progress made to protect the natural world. The competition to provide the cheapest product could result in a deviation from efforts to source materials sustainably, as well as manufacture responsibly. Moreover, it must be considered that these pursuits could lead to outrageous exploitation of vulnerable sectors of the work force, perhaps reminiscent of the working condition crisis during the industrial revolution. Though we approach these topics through the lens of technology, they are also rooted in the social and economic aspects of society and cannot be separated from these elements. If regulated and monitored carefully, new knowledge such as this could be a force for good and help our market to thrive; unchecked it could weaken the fabric of our society by encouraging the growth of socioeconomic disparities.

Our Question: Will a market so influenced by advancements in Artificial Intelligence and associated technologies still leave room for humanity?

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III. Education and the Constant Demand for Change Since the industrial revolution, education has maintained a relatively consistent structure despite shifts in the workforce. The core aspects of education in the present day revolve around evaluating student learning through tests and projects that mainly reflect a student’s ability to memorize and spit out facts. Multiple choice is the main system for testing, but we feel it can work along with creative learning and other methods to demonstrate different approaches to learning. It is important to recognize that institutions, such as schools and post-secondary programs, are meant to prepare people to be productive citizens to serve the goals of a nation. Furthermore, we are aware of, and concerned about, the constant growth of technology and the replacement of repetitive and entry-level jobs that are supposed to serve as our introduction into the workforce.

As stated earlier, we believe that our prediction will see the growth of technological industries and industries that require humans to be creative and use abstract thought in their jobs. Our survey results show that over 50% of youth feel that they are not prepared for the workforce and that their education is not helping them prepare. The choice of electives versus core classes raises questions of whether core classes are adequately preparing us for the workforce. We also question whether students’ choices of electives relate to their development towards being incorporated into the workforce or if their choices are based on more personal requirements that do not fulfill this purpose. Young people feel that the current education system can improve in order to prepare us for the future of work, or that we can be better informed about what choices to make in order to prepare ourselves for our futures. Furthermore, analyzing the education we are currently receiving, we the youth of Alberta, feel a pressing need for the education system to undergo a revision to accommodate the ever-changing world. Our education system has to be relevant, accessible, and evolve with the constant changes happening in the workforce. “Jobs are changing so our education will have to evolve with it. Teachers will need to better learn how to use technology and teach kids using it more. Since technology will be incorporated more and more into our lives, we will need to learn how to efficiently use it.”

- Student, École Secondaire Sainte Marguerite d'Youville, St. Albert

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Advancements and adjustments in education could include the implementation of specialized courses that allow students to learn about a field aligning with their interests and skill sets. This would provide increased opportunities for student participation in experiential learning opportunities with individuals that are currently in the workforce. These courses could include community volunteerism, research projects, and internships. Education is suggested to be more globalized through the use of technology to allow students to adopt a more diverse mindset. The main purpose is that through this specialization of learning, education would be made more relevant to students’ future career paths. We, the youth, believe our education system should mandate that all courses have to incorporate creative, global, and intercultural learning. System Adaptability Education needs to be adaptable and personalized for every individual. We, the youth, suggest that education models evolve into different learning categories that derive into customized, philosophical, and globalized learning. Customized learning will fit the needs, abilities, and ambitions of a student. Philosophical learning will help develop and enhance creativity, skills, and critical thinking. Globalized learning will implement technology that allows us to communicate with people around the world, which lets us expand our empathy and broaden our spectrum of knowledge.

“He (John Moravec) coined the term "knowmad," (a play on the word "nomad,") essentially a freelance thinker. He argues that "knowmads" are innovative, creative collaborators who are not afraid of failure.” Devon, Career and Technology Centre (CTC), Calgary

A common aspect of these learning categories are the skills taught, some of which are needed in every-day aspects of our life, but can be cumbersome for an individual to achieve on their own. Skills such as critical thinking, creative thinking, conceptual thinking, communication, and leadership aid in the ability to complete a job effectively. These skills also allow individuals to get out of their comfort zone, which enables them to be more flexible and open minded; as well as be able to be time effective, financially aware, and fully independent. We suggest that these skills are to be implemented in young students throughout their courses. Hence, the education model should change to create these three categories of learning in order to shift the current model to an iterative model, which will establish adaptability in the changing workforce. We, the youth of Alberta, want educators to broaden the ways in which they develop these skills in students and within the classroom.

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Access to Education Educational institutions in the next years will need to focus on implementing technology and its use, as well as resources that make opportunities accessible to the public. As technology becomes more prominent in the workforce, there is a growing need to learn how to use these tools to create a widened network of human interaction. Online platforms such as virtual reality will allow us to socially interact, learn, and experience places without having to travel. Furthermore, the use of technology can be time efficient, create new opportunities, and accelerate learning. In addition, utilizing data about current jobs and their availability and sustainability in the workforce will give students a baseline for their elective decisions. Although we are still taught to work towards certain traditional jobs, these jobs may disappear in the near future due to technological advancements. Implementing technology and facilitating its use will ensure that the disappearance of traditional jobs does not affect future generations.

“Lastly, I hope that by 2030, basic technology such as connection to the internet will be accessible to people all over the world, since being connected to the internet is such a valuable thing. It is a place where billions of people are involved in the selling, buying and sharing of information.” - Jolene, Queen Elizabeth High School, Edmonton

With advancements of technology, education must adapt in order to continuously be effective for society and relevant to the workforce. As technology becomes more prominent in our everyday lives, it becomes an extension of knowledge and social interaction that is available to all. We, the youth, believe that the implementation of these tools will allow change, enabling us to be innovative, create opportunities, and develop competency skills. However, we must be conscientious of the fact that we cannot become fully reliant on these technologies. While students feel unprepared and doubtful about how the present education system is preparing them for the workforce, changes can be progressively made in order to improve the system.

Our Questions: How will the education system change to prepare us for adult life? Namely budgeting and taxes, coding, and interacting with computers. How do teachers stay up to date with technology, and implement it in the classroom more? With different technological skills becoming more and more important to everyday life, how can the life skills of technology by incorporated into curriculum? How do we ensure, as technology becomes more integral to success in education and the workforce, that access to and education around these advancements are available to all - irrespective of socioeconomic status, age, ability, etc.?

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Conclusion “He (Tony Wagner) says that "the 'problem' is, simply, that the future of our economy, the strength of our democracy, and perhaps even the health of the planet’s ecosystems depend on educating future generations.” This idea that changing education so that it prepares students for being a citizen in not only the 21st century but the future; is an effective way of preparing for the unknown. By building skill sets instead of mindsets students/future generations will be able to work with a changing future and imagine new innovations in an adaptive manner.” - Shauna, Career and Technology Centre (CTC), Calgary

We, the youth of Alberta, believe that by 2030 Alberta will be vastly different due to the expansion of digital innovation/artificial intelligence and the rise of biomedical technology. We believe that to accommodate these changes the education system will need to be revised in order to help prepare the students for the future. With such advances in technology, jobs will become more specialized and require more training, but we must also learn how to coexist with such advances without losing our humanity. The technology that is created must support ethical and sustainable standards while contributing to a green economy. We, the youth, believe that technology and biomedicine have the potential to greatly advance our quality of life. But these technologies must not be simply profit driven; they must also consider their greater impacts, ethical, and moral implications. We want to see these technological advancements distributed in a more equal manner that helps us preserve our humanity and involve human interaction. We, the youth, believe that an updated education system is a method through which future youth can adapt to a technologically advancing world, while fostering critical thinking and maintaining the ever-important human interactions that allow us to empathize with the world around us.

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Resilience of Alberta’s Economy

AND

Effectiveness of Alberta’s Innovation Ecosystem – fall ‘18

The Alberta Council of Technologies conducts a spring and fall survey of its followers for assessing the "Resilience of Alberta's Economy" AND evaluating the "Effectiveness of Alberta's Innovation Ecosystem". The following Report contains the summary results of the Surveys conducted in September 2018

Prepared for: Members of the Alberta Council of Technologies Society and the Economic Developers of Alberta

Prepared by: The Alberta Council of Technologies Society

October 2018

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Monitoring Alberta’s Economic Diversification – September 2018

The Alberta Council of Technologies is "Creating the new Alberta!' through our network of contacts sharing an interest in emerging technologies and their commercialization. Since 2015 we conduct in March and September a standard on-line survey of our followers for monitoring and benchmarking Alberta's economic diversification and the associated innovation ecosystem. Questions should be directed to the Alberta Council of Technologies Society’s editor@ABCtech.ca

OVERALL Sentiment Uncertainties in the oil and gas industry and government deficits have weakened industry

sentiment that Alberta’s is economically resilient with an associated decline in the sentiment that Alberta’s innovation ecosystem is effective for supporting small business innovation and

diversification of the economy.

Alberta sentiment weakened further in fall ’18 for both economic resilience/ diversification and the effectiveness of it’s innovation ecosystem. The widespread gains since ’15 in economic resilience have reversed and is particularly extreme for the Calgary Region and Government & Public Policy. All industries/professions - other than Education & Research, have declined. The shock is attributed to economic uncertainties in the oil industry: pipeline delays and the discounted price of oil, and the Alberta Government’s revenue vulnerability: budget deficits and debt. Overall, the survey illustrates Alberta’s continuing economic vulnerability to being overly dependent on a single industry and the inadequacy of it’s innovation ecosystem to effect a transition.

First, about ALBERTA. We view diversification as the primary means of making Alberta's economy more resilient, that is, less vulnerable and more able to recover from economic shocks. Next we portray the Regional locations of the survey respondents.

Sample - 59% Edmonton Region, 25% Calgary Region, 16% Other. *Survey extended in mid-September to include Economic Development of Alberta

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Spring '18 Edmonton Region 59%

Calgary Region 25% Other 16%

Fall '17 Edmonton Region 59%

Calgary Region 25% Other 16%

Cloud Summary of Others Specified

*Economic Developers of Alberta added in mid-September The Edmonton Region at 59% is over-represented in the provincial sample; the Calgary Region at 25% is under-represented. Other – Alberta (16%) is comprised of non-urban Alberta respondents. The representation of Regions has remained the same between surveys.

Word Cluster of Comments

Regional Breakdown (Resilience: 5 = Very, 1 = Not) Sep’18 Mar‘18 Sep’17 Mar’17 Province Overall 2.37 2.47 2.32 2.17 Edmonton Region 2.40 2.38 2.36 2.07 Calgary Region 2.05 2.14 2.08 2.40 Other Regions 2.80 2.70 2.57 2.25 Regional Average 2.41 2.41 2.34 2.24

The overall sentiment is that the Alberta economy is not resilient and has recently weakened – attributed to the Calgary Region and it’s economic vulnerability to geo-political forces directed at Alberta’s oil and gas industry.

Q1. On a scale from 1 = Not Very Resilient to 5 = Very Resilient, please rate how you view the diversity of Alberta’s economy

Q3. Location. What Region of Alberta do you most identify with?

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• Most (62%) of respondents view Alberta’s economy as not resilient (<3.00) compared with only 1/4th (26%) viewing the Alberta economy as resilient.

• On a scale from 1 to 5, with 1 being Not Very Resilient, the overall provincial average of 2.37 is negative, remaining well-below Neutral (3.00)

• The provincial decline is attributed to weakness in the Calgary Region (2.05), pulling down the overall provincial index as continuing progress is evident outside the Calgary Region

• The ER Index for the Edmonton Region – heavily public sector, and the Calgary Region – dominant oil and gas industry, have reversed since 2007.

Sample Comments – Alberta’s economy remains overly-dependent on the oil and gas industry • With about 40% of the provincial GDP coming from the oil industry and related activity, that leaves us at the mercy of

the whims of that market. (1-Calgary) • There is no diversification in Alberta. Everyone, including the government, is hanging on the "oil droplet" for dear

life! (1-Edmonton) • Dependence on Energy and Agriculture does not paint a positive picture for the future.... plus, delusions that

technology will save us are just that... delusions. What happened to the Heritage Trust Fund?... pissed away and social programs. (1–Other)

• Seems to be only two major sources of revenue for the province... Government contracts / Oil. (2-Edmonton) • It's evident how Alberta, its two main cities have been affected by the stress of the oil & gas crisis. The

unemployment rates continue high for more than three years. (2-Calgary) • Alberta has made good strides, particular Edmonton Region on diversification. Lethbridge is quite diversified, Calgary

needs to improve still. (3-Edmonton) • I think we are in the initial phase of economic diversification and it will take another five years to actually become

diversified. (4-Edmonton) • Despite the downturn in the energy industry, you still see vibrant communities in Alberta - lots of construction. Oil &

Gas is a huge driver, but there's a strong agriculture and food processing / ag processing sector; forestry; health sciences; logistics & distribution; construction; tourism etc. (5-Other)

Next, is to understand what measures underlie the assessment of Alberta’s economic resilience.

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Reduced Corporate Investment and Employment/ Job related indicators are most frequently - and consistently cited as the most sensitive measures of Alberta’s economic resilience • The most sensitive (top 3) measures of resilience remain: Reduced corporate investment (74%, up 9% since fall ’17), Decreasing job creation (47%, down 4% since fall ‘17), and Increasing unemployment (46%, down 5% since fall ’17) • Most sensitive/ variable measures compared since fall ‘17: Reduced corporate investment and Decreasing job creation • Least sensitive/ variable measures remain: Out migration and Increasing personal bankruptcies.

Reduced Corporate Investment and Employment/Job related indicators are most frequently - and consistently, cited as the most sensitive measures of Alberta’s economic resilience.. • The most sensitive (top 3) measures of resilience remain: Reduced corporate investment (74%, up 9% since fall ’17),

Decreasing job creation (47%, down 4% since fall ‘17), and Increasing unemployment (46%, down 5% since fall ’17) • Most sensitive/ variable measures compared since fall ‘17: Reduced corporate investment and Decreasing job creation • Least sensitive/ variable measures remain: Out migration and Increasing personal bankruptcies.

Word Cluster of Other

Sample Other - Other measures highlight concern with government policies, lack of job creation, and troubles affecting Alberta’s oil and gas industry • Household debt, cost of living, housing bubble. (1-Edmonton) • Increasing government employment, personal and government debt and no demonstrable plan to address this is a

major concern. (1-Calgary) • Job creation numbers can be misleading. Public sector jobs, paid out of tax revenues and debt financing are not a good

indicator of economic health. Private sector jobs are. (1-Other) • Investment dollars are leaving when the federal courts rule and not the government (1-Calgary) • SME job creation is the best indicator of economic health. (2-Edmonton) • Increasing Provincial Deficit.(3-Edmonton) • Number of AB innovations that have to move to the US to succeed. (3-Edmonton) • Start Up creations. (4-Calgary) • Over-reaction and lack of perspective and knowledge to the benefits and national importance of Alberta’s energy

industry. The external attacks and lack of support in Canada is embarrassing and downright ignorant. (4-Other) • Why are these all negatives? Are you pre-biasing? (5-Edmonton) • Lack of respect and collaboration between industries. (5-Calgary)

Q2. What factor(s) are the most sensitive measures(s) of whether Alberta’s economy is or is not resilient?

Sep ‘18

Sep’18

6

Next we investigate the sentiment of Alberta’s economic resilience by 20 industries/ professions.

All industries/ professions with the exception of Education & Research portray a decline in Alberta’s economic resilience. The greatest declines came from those with an interest in Government, Forestry and Engineering

• The Industry average for fall ‘18 declined 15% to 2.14 from 2.52 in spring ’18 and 9% from 2.34 in fall ’17 • With the exception of Education & Research ALL other sectors portray a decline in Alberta’s economic resilience • Portraying the least resilience (<2.00) are: Finance & Investment (1.67), Government & Public Policy (1.69),

Forestry & Wood Products (1.97). • While none are greater than 2.50, the most resilient are Education & Research (2.50), Construction & Real Estate

(2.49), Communications & Marketing (2.40) • The industries portraying the greatest declines in resilience since spring ’18 are: Government -35%, Forestry -28%,

Engineering -27%, Transportation -24%, Mining & Minerals -23%. Only Education increased 4%. Next. what is the most appropriate role(s) for government to make Alberta more resilient?

Q3. What 5 industries and/or profession are of most interest to you? Choose up to five (5).

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The appropriate roles for government to make Alberta more resilient are in policy formulation, promoting small business innovation, and negotiating trade agreements. Otherwise, spend less. • Most agree as appropriate: Formulate policies and employ incentives for encouraging small business innovation (62%), Promote entrepreneurship and small business start-ups (55%), and Negotiate trade agreements (52%) • Weakest agreement: Invest directly in technology commercialization (32%), Invest directly in PROJECTS that offering immediate job creation (34%), Use government purchasing power to develop and attract businesses to Alberta (35%) • Moderate agreement: Invest directly in RESEARCH offering long term job creation (45%), and Fund educational and training programs for ensuring that graduates can create new jobs (39%) • Little variation in the rank order of roles since fall ’17.

Word Cluster of Other

Sample Comments – A mix of recommendations for government policies and incentives supporting small business innovation and research. Frustrations with government spending and size, red tape and short-term perspective • Technology commercialization is the weakest sector in Alberta. (1-Calgary) • Governments falsely believe they can create job when it is debt they create. Create the environment, monitor, but

let business do business. (1-Calgary) • Reduce taxes and regulations on small business. (1-Calgary) • Reduce red tape. (1-Edmonton) • Learn about accountability. Many programs initiated by government don't work, yet are continued over and over. (1-

Edmonton) • Reduce size and cost of government, reduce regulation, reduce tax burden, allow the market economy to improve

without the CONTRAINTS of government and government over regulation. (1-Edmonton) • Cut taxes, cut regulations, reduce government by half". (2-Calgary) • There are no policy tools to meet the need of start-up industries in Alberta. As soon as Oil & Gas picked up the focus

at the political level, banks and investments returned to hope in energy.(2-Edmonton) • Research funding is needed where future industry and jobs will be (2-Other)

Q5. What role(s) are most appropriate for government to make Alberta more resilient?

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• A lot of the above are occurring. What is not happening now are the next stages - SME growth and markets. I'm becoming very concerned about the uneven role and influence of multi-nationals across a number of sectors and particularly tech. (4-Other)

• We cannot count on Government, they move too slowly and too many policies & initiatives are only for the next 4 years, elected can only see to next election and their own survival. We need serious long term planning: 10, 20 & 40 years from now (4-Edmonton)

Next we investigate the effectiveness of Alberta’s Innovation Ecosystem, but first –is the system essential for achieving diversifying the economy?

Strong agreement (87%) that Alberta needs an effective and continuously improving Innovation Ecosystem is needed that supports the survival, growth and retention of Alberta's entrepreneurs and SMEs for achieving economic resilience/ diversification • 87% agree, consistent with the spring ’18 and fall’17 (both 88%) • Only 8% disagree, consistent with the spring ’18 and fall’17 (both also 8%)

Sample Comments – Regardless of whether respondents agree with the need for an Innovation Ecosystem or not, ideas differ on what’s wrong with entrepreneurs, the system, and government (Scale 1-Not and 5-Very: ER–IE Rating and Region)

• Let the entrepreneurs develop their emerging technologies without the legislative and tax restrictions imposed by the government of the day. (1-1 Edmonton)

• The current groups haven't gotten it done because they don't know anything about innovation, or technology, the key driver of innovation and technology. You will need technologists at the table in key leadership and management positions in all of these groups before anything changes, otherwise, the job of most people in current groups will remain not to understand anything because their job may be in danger, while the world passes Alberta by. (1-1 Edmonton)

• Governments need to create the right conditions for entrepreneurs to flourish, regulate them so it's not a free for all, then get out of the way. (1-1 Calgary)

• Albertans are under the mistaken impression that entrepreneurs "owe" the public supports in the form of employment, benefits, intellectual property rights and Taxes. In effect, the royalty system has somehow created the idea that they can take whatever

Q6. To achieve economic resilience/ diversification, Alberta needs an effective and continuously improving Innovation Ecosystem that supports the survival, growth and retention of Alberta's entrepreneurs and SMEs. Do you agree?

Comments Word Cluster

Sep ‘18

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they wish from founders and treat them as I'd they have to justify their existence to the public. If there is a problem with archaic provincial-wide systems then the response is to blame the entrepreneur and not critique an antiquated system. The system of public regulation seems to be the problem. The status quo is reinforced by the old royalty thinking and this will certainly drive away innovative technology and businesses that are heavily invested in intangible assets. Innovation is important, but only one dimension for success in large business. Ecosystems and supply chain liaison is far more important to get products to markets. (2-1 Edmonton)

• Current, government policy is pushing entrepreneurs to go elsewhere - we need a positive environment that is based in reality not political dogma. (2-1 Other)

• Start-up ecosystem appears to only favour political insiders, money goes to high paid consultant and limited set of service providers. (4-1

• I've worked in innovation for years and learned how leaders in the various sectors are not only investors in but also champions of innovation and sustainable operations that are good for all of us. There is absolutely no need to continually reinvent the wheel. Ask anyone in tech or innovation which 'group' is charting the way today and they will say 'whichever one the government is currently funding.' It's a ridiculous waste of human energy, time and money. (5-1 Calgary)

• SME growth IS the economic engine of any economy. (2-1 Edmonton) • Whereas as a country and a province we have been good at developing new ideas and products, we do a poor job of marketing

them and retaining ownership. (2-3 Other) • Great to see the words effective and continuous in the vision. (4-4 Other) • I think we need a "business growth ecosystem". (4-4 Calgary) • Yes, but it must be market focused and not overly reliant on tax support-it should have strong support in the private sector. (1-4

Other)

Finally how do respondents view the effectiveness of the current Innovation Ecosystem?

Respondents 2:1 do not view Alberta’s Innovation Ecosystem as Effective • The average of 2.35 on a scale of 5 – Very effective and 1 – Not very effective, indicates the system overall is not effective • Few (24%) rated the system as effective and only 2% as very effective • More than twice as many (56%) rated the system as ineffective, 34% as not very effective • Litle change from 2.38 in fall ’17 2.38 but 6% decrease from 2.50 since the spring ’18.

Comments Word Cloud

Sample Comments – Heavy critiquing of the Innovaition Ecosystem System is atrributed to it’s government affiliation • Again, it is so simple: align those who are already 'doing it' (from companies of all sizes and sectors). We have a province of brilliant, energetic and tenacious minds who are giving up because we too many organizations

Q7. Is Alberta's Innovation Ecosystem effective in supporting the survival, growth, and retention of entrepreneurs and SMEs?

Sep ‘18

10

build independent castles. (1-Calgary) • Government’s attack on businesses has forced many entrepreneurs and investors alike to look elsewhere. (1-Edmonton) • No business can grow and no entrepreneur can be retained without ready access to the market for their products and services. (1--Edmonton) • Two new initiatives could have short term impacts, namely; allow SME employees to contribute to government pension plans with benefits that would carry forward regardless of employment/employer status, and establish a SME patent defense fund to ward off attacks from patent trolls. (1-Edmonton) • You can't turn apples into oranges- we should embrace our natural resource based economy and do everything in our power to support it. We should layer onto it encouragement for value added manufacturing of petroleum and wood - for 2 examples. (1-Calgary) • Innovation support and investment markets have been too focused on the quick returns of the oil and gas industry resulting in underfunding other sectors. (2-Edmonton) • Retention is the problem. International companies come in to buy the local companies for Intellectual Property and move the core team out of Alberta. (3-Calgary) • Too many small businesses lack the capacity and knowledge for budgeting and long-term capital planning. As older business owners retire, Alberta runs the risk of losing key services in smaller communities, which increases costs for the average consumer and decreases the economic growth in general, and the specific economic viability of these small communities. (3-Edmonton) • We could do a lot more by teaching entrepreneurship in our schools, starting at the grade school level.(3-Edmonton) • Alberta still needs economic diversification and should be investing more in the new economy and needs to do more to build a vibrant tech sector. (4-Calgary) • Compared to other provinces, Alberta is quite effective here. It just doesn't appear so effective when the energy industry downturns - but some of these businesses need to find their own innovative ways to diversify in order to survive. When you put all your eggs in one basket (industry or customer) then you are at higher risk when that basket disappears. (5-Other) • Survival is the wrong goal for innovation. Highly effective as evidenced by Alberta Innovates Technology Commercialization Scorecard. (5-Edmonton)

* * * Copies available to Members of the Alberta Council of Technology Society and the Economic Developers of Alberta Contact: editor@ABCtech.ca Phone (780)990-5874 or 1(866)241-7535

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Is Alberta’s Public Procurement Broken? - May/June 2018

Executive Summary

Public procurement – the engagement of non-government resources, involves the administration of $Billions engaging hundreds of contractors,

thousands of jobs and is central to every level of government. It is almost as core to the Alberta economy as the oil sands, and as such the frequent

subject of auditor reports. The Alberta Council of Technologies Society (ABCtech) conducted an On-line survey in May 2018 to learn about the practice

and objectives of public procurement in Alberta. The views of contractors and administrators – their expectations and levels of satisfaction, comments

and recommendations, were solicited from among those in ABCtech’s directory of individuals sharing an interest in the impact of emerging

technologies.

Sample profile. The sample includes few administrators (12%) and is comprised mainly of public procurement contractors: urban, small-business

contractors that are moderately reliant on provincial contracts up to $100,000. They do not have full-time resources dedicated to public bidding. Most

are familiar with information and management services and somewhat less with construction, education and research. Most are familiar with provincial

and municipal procurement processes and trade agreements. A majority expect to increase their involvement in bidding on government contracts.

Public Procurement Practices. The most important features and with considerable gaps in what is expected vs received by contractors in the practice of

public procurement are the features that have a direct impact on bidding – timeliness and bidding/evaluative criteria. Features of less importance are

those that are viewed as the objectives of government and biasing the achievement of Value for Money – Incentives for social and economic

development and innovation. Gaps are greatest among infrastructure contractors with an interest in Construction, Transportation, Engineering also

Communications. The features and comments of contractors provide insight into differences among contractors. The current uncertainty in negotiation

of trade agreements may by affecting the expectations of contractors indicating decreasing interest in public procurement - particularly among the

Calgary Region’s small businesses contractors.

Public Procurement Objectives. Contractors and Administrators align in their disagreement with the objectives of public procurement. The Disaster

Recovery objective is the only exception. Otherwise, Administrators rate highest government’s stated objectives of Innovation and Vision & Leadership,

and Effectiveness. Contractors disagree, including a very low rating for the objective of Effectiveness: Government procurement and project

management are well aligned. That is, deliverables are on-time, on-budget, and as specified. Otherwise, while rated higher than Contractors,

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Administrators support is weak for the other objectives – particularly Value for Money, that both rate lowest. Of concern must be the generally low

ratings by both Administrators and Contractors for the prime objectives of public procurement: Value for Money, Transparency, and Overall. The low

agreement and very high disagreement by Contractors with all objectives - other than Disaster Recovery, is consistent for most Contractor features with

the possible exception of size. The poor rating for the objectives of Value for Money and Transparency is highest for larger organizations. The

comments reviewed indicate that the prime issues are with waste not corruption or fraud.

Recommendations. The broad dissatisfaction and pointed gaps in public procurement practices are evident. Support is weak for the associated

objectives. Respondent comments and recommendations reinforce the Report’s several recommendations:

1. Establish Oversight. Establish standard expectations and expect all bidders to complete a simple anonymous evaluation of the procurement

process accompanying each bid.

2. Continuous Improvement. Engage a 3rd party to conduct an audit of the public procurement system – it’s practices and objectives engaging

contractors and administrators. Target the gaps and follow-up on improvements annually. Propose recommendations and standards.

3. Engage Industry. Review all public procurement practices with the intent of increasing small business engagement, promoting innovation, and

incenting collaboration/partnering.

4. Special Consideration for Emerging Technologies. Emerging technologies are challenging all public procurement practitioners to remain up-to-

date on the latest innovations. This is particularly true in information management affecting all industries and all departments - healthcare in

particular – given the extraordinary costs and waste reported in the development of health information systems. The rate of change is so great

as to make the task of encouraging innovation while also containing costs, managing risk and avoiding waste.

5. Listen. The Government of Alberta should establish an Industry Advisory reporting to the Minister of Service Alberta with responsibility to file

an annual report with the Minister and the public on the status of public procurement.

6. Learn. Host an annual conference for stakeholders to be exposed to best practices in public procurement

Action is warranted. The economy is changing – the digital age and emerging technologies are accelerating change. Organizations must adapt; to be

nimble and responsive is essential. Public services secured through contracting that are sub-standard and inefficient are unacceptably wasteful. Every

$Billion of waste by the Government of Alberta, for example, equates to over $222 per citizen. The socialization of public services is NOT the answer,

nor are policies of “Buy Alberta!” What is needed is what is already promised in policy: Transparency, Value for Money, and Effectiveness. Contractors

agree, And using public procurement as a blunt instrument for social engineering is offensive and contrary to securing good products and services –

preference is bias, creating discord and resentment. What is inferior shouldn’t get preference. What isn’t inferior, shouldn’t need preference.

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Table of Contents Page

Executive Summary …………………………………………………………………………………………………………………………………………. 1 Table of Contents ..…………………………………………………………………………………………………………………………………………… 3 Introduction ………………………………………………………………………………………………………..……………..………………….………. 4 A. Contractors – Their Profile and Interests ………………………………………………………………….………………………….…….. 6

B. Assessing Alberta’s Public Procurement Practices …………………………………….…………………………………………….….. 10 1. First, what is most important for Alberta’s contractors in public procurement? ……………………………….….. 10 2. Next, do contractors differ in their assessment of public procurement practices? …….…………………………... 11

a. LOCATION ……………………………………………………….………………… 11

b. INDUSTRY ..…………………………………………………………………...….. 13

c. LEVELS OF GOVERNMENT ….………………………………………………. 16

d. ENGAGING CONTRACTORS …………………………………….………….. 18

C. Assessing Alberta’s Public Procurement Objectives ………………………………..…………………………………………...…….. 23

1. First, how do administrators and contractors view the objectives of public procurement? …………………... 23

2. Next, how do Contractors differ in their views of public procurement objectives? .………………………………… 24 a. LOCATION ……………………………………………………….………………… 24

b. INDUSTRY ..…………………………………………………………………...….. 26

c. LEVELS OF GOVERNMENT ….………………………………………………. 27

d. CONTRACTOR SUPPORT ………………………………………...………….. 28

CONTRACTOR’S COMMENTS RE: THE OBJECTIVES …………….. 30

D. Recommendations and the Conclusion …………………………………………………………………………………………………..……. 33 Conclusion …………………………………………………………………………………………………………………………………………………….40

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Introduction

Billions of dollars are spent annually by various levels of government in the purchase of supplies and services in Alberta. The public expenditure

represents both a significant economic opportunity and the risk of waste, fraud and corruption. Procurement policy is shaped by trade agreements and

regulations governing fair trade. The practice itself is the by-product of a make-or-buy decision, and an assessment of whether competition in the

private sector is adequate to govern costs and standards. Independent audit reports are employed to provide independent oversight.

The Alberta Council of Technologies Society exists to advance the commercialization of emerging technologies as a contributor to diversification of the

province’s economy. Public procurement continues to be of interest to our 20,000 followers comprised of a diverse array of industry and public sector

interests, innovators and regulators, taxpayers and policy influencers, contractors and administrators. Our interest in public procurement has recently

increased.

Public procurement is being exposed to increased public scrutiny as associated issues converge:

• Interprovincial trade and the renegotiation of trade agreements

• Debate on the role of governments in diversifying the Alberta economy

• Introduction of policies and practices to stir innovation and social justice objectives

• Audit reports of extraordinary waste in the procurement for example of data management systems The Council elected to conduct one of the first external, independent assessments of public procurement in Alberta. We were particularly interested in obtaining the perspective of contractors, given the interest expressed by governments in heightening innovation. In May we canvassed our followers soliciting the interest of contractors and procurement administrators. The On-line survey posed a series of questions about the practice and objectives of public procurement by the federal, provincial and municipal governments in Alberta. The survey’s objectives were several, to learn about:

1. The expectations of contractors, how they vary, and whether they are being met 2. The policy objectives of public procurement and whether they are being met 3. Differences between contractors and administrators, industries/professions, and geographic areas of the province 4. Recommendations for improving public procurement both in terms of its practice and in terms of achieving its objective(s)

We assumed that the interests of administrators and contractors would be reasonably aligned as they are the prime partners in the system. We incorporated two questions, the answers to which served as primary reference points for the study: 1. Value for money and 2. Transparency - free from waste, fraud and corruption.

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The summary and discussion of results are organized into sections: A. Contractors – Their Profile and Interests, B. Assessing Pubic Procurement Practices, C. Assessing Public Procurement Objectives and D. Recommendations and the Conclusion. Note. The identity of respondents is confidential. However, the data is open for scrutiny should others be interested in conducting and sharing their analysis.

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A. Contractors – Their Profile and Interests

Of the 92 respondents, most (88%) were corporate contractors with a few (12%) administrators. Most of the contractors and administrators were from the Edmonton (72% and 64%) and Calgary (21% and 27%) Regions with few from outside urban Alberta (7% and 9%).

Contractors N = 81 Northern Alberta 2% Edmonton Region 72% Central Alberta 5% Calgary Region 21% Southern Alberta 0% Administrators N = 11 Northern Alberta 0% Edmonton Region 64% Central Alberta 9% Calgary Region 27% Southern Alberta 0%

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The contractor’s typical contract bid (75%) was $100,000 or less – a small business with 74% having no dedicated resources for responding to Competitive Provincial (3.8: 5.0) and municipal (3.1: 5.0) procurement purchasing requests.

Eighty-eight percent of contractors are moderately or more familiar with provincial procurement practices; they are most familiar with public processes in Alberta. More than 2/3rds of the contractors rely moderately or more on government contracts.

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The industries most familiar to contractors engaged in public procurement are: Infotech & Analytics (37%) and Management & Strategy (35%) followed by Construction & Real Estate and Education & Research (both 22%). Familiarity is highest with the North American Free Trade Agreement (77%). Several (10%) also commented on their familiarity with the New West Partnership Trade Agreement.

Almost 60% of the contractors expect to increase their involvement in bidding on government contracts.

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SUMMARY The sample includes few administrators and is comprised mainly of public procurement contractors: urban, small-business contractors, that while

moderately reliant on provincial bidding up to $100,000, they do not have full-time resources dedicated to public bidding. Most are familiar with

information and management services and somewhat less with construction, education and research. Most are familiar with provincial and municipal

procurement processes and trade agreements. A majority expect to increase their involvement in bidding on government contracts.

* * *

The next Section B. is comprised of an evaluation of various practice features of public procurement in Alberta from the perspective of contractors.

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B. Assessing Alberta’s Public Procurement Practices

For assessing the practice of public procurement in Alberta, we asked respondents to rate their experience with 13 practice features in terms of what is

important and expected AND what is received and satisfaction. For discussion, each feature is analyzed and presented independently:

• Rating each of the 13 practice feature on a scale from 5 – High to 3 – Moderate to 1 – Low

• Ranking of the practice feature’s in terms of Expected-Importance vs. Received-Satisfaction

• Identifying the gap between Expected-Importance and Received-Satisfaction

• Comparing expectations and gaps with contractor’s features as identified in Section A.

• Developing a profile for contractors interested – and not, in increasing their involvement in bidding.

1. First, what is most important for Alberta’s contractors in public procurement?

Practice Features – ranked below in order of Expected-Importance (E-I). Ratings are on a 5

point scale from 5 - High to 3 – Moderate to 1 – Low. Gap compares E-I with Received-Satisfaction. Rating Gap

Ranking Delta*

1. Reasonable timelines for bid preparation 4.37 1.72 4

2. Terms of service/supply: fair, clear, rational 4.28 1.68 4.5

3. Reasonable timelines for service/supply delivery 4.27 1.24 8

4. Ease of use and responsive: e.g.: electronic on-line communication 4.24 1.68 2.5

5. Evaluative criteria, e.g.: fair, clear, rational 4.23 1.86 1

6. Advance notice and helpful information 4.20 1.88 3

7. Reasonable pricing for labour and capital 4.14 1.54 1

8. Reasonable pre-qualifications: e.g.: insurance, location, resources, experience 4.01 1.25 2

9. Bid feedback, e.g.: timely, clear, rational 4.00 1.96 7

10. Incentives for innovation, e.g.: technology, partnering, compensation, project management 3.84 2.03 9

11. Clear process for change management 3.84 1.39 2

12. Incentives for economic development e.g.: location, jobs, salary levels 3.36 1.16 -

13. Incentives for social development, e.g. race, gender, education, religion 2.77 0.18 -

Weighted Average 3.97 1.47 *Ranking Delta refers to the difference between a feature’s Expected and Received rank.

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a. Most features assessed are rated as important. The five most important >4.00 practice features to contractors are those contributing to

bid preparation: timeliness for 1. Bidding and 3. Service/supply, and criteria for 5. Evaluation and 2. Terms of service. Ease of use and

responsiveness 4. is also rated high. The next four in importance - rating 4.00 or more, are also associated with bidding. The least

important >1.50 interests: incentives 10, 12, 13 and 11. Change management.

b. Gaps are considerable particularly for features primary to preparing a bid. The gaps between Expected-Importance and Received-

Satisfaction were considerable averaging 1.47 on a 5 point scale or 30%. The largest gaps among the top five important features are: 6.

Advance notice, 5. Evaluative criteria, and 1. Reasonable timelines for bid preparation. Large gaps - close to 2.00, are also apparent for

several of the less important features: 10. Incentives for innovation and 9. Bid feedback.

c. The features warranting attention. Contractors view the importance >4.00 and the gaps > 1.50 as considerable for most of the

procurement practice features surveyed. We categorized those features associated with bid preparation as “Primary” (Yellow in the table

above), and those associated with public objectives as “Secondary” (Blue).

Summary. Contractors value most the public procurement features essential to preparing bids, features that are also viewed as having the greatest gaps in what is expected and received. Those features associated with public objectives are viewed as less important though expectations are not being met for innovation.

2. Next, do contractors differ in their assessment of public procurement practices? Contractors differ from one another in a number of ways as identified in section A. In this section we assess the relevance of these

characteristics in the contractors assessment of public procurement practices. For example, do contractors differ in their assessment of

municipal, provincial and federal public procurement practices or based on where in the province they are located? We start with Location.

a. LOCATION. Locations are aligned with the importance and gaps in primary procurement practice features. There are

few respondents from Northern, Southern, and Central Alberta; we therefore merged their responses as Other.

LOCATION – Rating of Expected-Importance vs Received-Satisfaction. Ratings are on

a 5 point scale from 5 - High to 3 – Moderate to 1 – Low. Edmonton

N=53 Calgary N=16

Other N=5

Weighted Average

1. Reasonable timelines for bid preparation 4.36 4.31 4.80 4.37

2. Terms of service/supply: fair, clear, rational 4.31 4.06 4.60 4.28

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Observations:

• Contractors in Calgary Region on average have lower ratings and those in the Other locations, the higher ratings.

• The Regions generally align on the importance >4.00 and ranking of each of the primary practice features, with the secondary features

generally rated below 4.00.

• Exceptions for Calgary and Other are the >4.00 ratings for 10. Incentives for innovation and for Calgary the <4.00 rating for 8. Reasonable pre-

qualifications and 9. Bid feedback.

• Regions are aligned that Incentives for social development 13. are the least important.

3. Reasonable timelines for service/supply delivery 4.36 3.93 4.20 4.27

4. Ease of use and responsive: e.g.: electronic on-line communication 4.26 4.06 4.40 4.24

5. Evaluative criteria, e.g.: fair, clear, rational 4.17 4.33 4.40 4.23

6. Advance notice and helpful information 4.09 4.38 4.60 4.20

7. Reasonable pricing for labour and capital 4.15 3.93 4.40 4.14

8. Reasonable pre-qualifications: e.g.: insurance, location, resources, experience 4.15 3.50 4.20 4.01

9. Bid feedback, e.g.: timely, clear, rational 4.06 3.64 4.20 4.00

10. Incentives for innovation, e.g.: technology, partnering, compensation, project management 3.68 4.13 4.40 3.84

11. Clear process for change management 3.79 4.00 3.60 3.84

12. Incentives for economic development e.g.: location, jobs, salary levels 3.23 3.71 3.80 3.36

13. Incentives for social development, e.g. race, gender, education, religion 2.63 1.00 2.40 2.27

Weighted Average 3.94 3.71 4.15 3.93

LOCATION – Gaps in Expected-Importance vs Received-Satisfaction. Ratings are on a

5 point scale from 5 - High to 3 – Moderate to 1 – Low. Edmonton

N=53 Calgary N=16

Other N=5

Weighted Average

1. Reasonable timelines for bid preparation 1.78 2.40 1.38 1.88

2. Terms of service/supply: fair, clear, rational 1.55 2.20 1.81 1.68

3. Reasonable timelines for service/supply delivery 1.40 0.80 0.87 1.24

4. Ease of use and responsive: e.g.: electronic on-line communication 1.54 2.20 1.38 1.68

5. Evaluative criteria, e.g.: fair, clear, rational 1.81 2.20 1.87 1.86

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Observations:

• Gaps prevail across all practice features with the possible exception of 13. Incentives for social development, that is also viewed as least

important.

• The average gap was greatest among the Region’s contractors for those in the Calgary Region (1.82) and least for those in the Edmonton Region

(1.44).

• Large gaps >1.50 are apparent on the primary practice features with the exception of 3. Reasonable timelines for service/supply delivery.

• All three locations also have large gaps>1.50 in 6. Advance notice, 9. Bid feedback, and 10. Incentives for innovation.

• Variation is not apparent between locations with the possible exception of contractors in the Calgary Region that cite a very large gap (2.60) in

8. Reasonable pre-qualifications and the Edmonton contractors that cite a large gap in 7. Reasonable pricing for labour and capital.

Summary. Contractors across the three locations are in general agreement that primary public procurement features – those directly impacting

bidding, are the most important and also with large gaps between what is expected and received. Large gaps are also cited for most other procurement

features including incentives. While incentives are among the least important, they - particularly incentives for innovation, are cited as having a large

gap by contractors in all three locations. Inconsistency is apparent between locations in pre-qualifications to bid (Calgary) and in pricing for labour and

capital (Edmonton).

b. INDUSTRY. Primary procurement features are important to most industries, with the greatest gaps identified by

infrastructure industries

Contractors were asked to identify up to three the industries engaged in public procurement that they were familiar. Their rating of each feature was

assigned to each industry they identified. Caution, there is considerable variation in the number of observations for each industry

6. Advance notice and helpful information 1.73 2.13 2.40 1.88

7. Reasonable pricing for labour and capital 1.73 1.00 1.07 1.54

8. Reasonable pre-qualifications: e.g.: insurance, location, resources, experience 1.33 2.60 0.50 1.35

9. Bid feedback, e.g.: timely, clear, rational 1.87 2.20 2.00 1.96

10. Incentives for innovation, e.g.: technology, partnering, compensation, project management 1.78 2.60 2.56 2.03

11. Clear process for change management 1.25 1.20 1.86 1.39

12. Incentives for economic development e.g.: location, jobs, salary levels 0.97 1.80 1.57 1.12

13. Incentives for social development, e.g. race, gender, education, religion 0.00 -0.20 1.00 0.18

Average 1.44 1.82 1.54 1.47

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INDUSTRY - Rating of Expected-

Importance vs Received-Satisfaction

Public Procurement Practice features

N 1 2 3 4 5 6 7 8 9 10 11 12 13 Weighted Average

Agriculture & Food Processing 5 4.40 3.00 3.80 3.40 3.40 3.20 3.80 4.20 2.80 3.00 3.20 2.80 3.20 3.40

Communications & Marketing 8 4.38 4.63 4.13 4.50 4.25 3.63 4.13 4.00 4.38 4.00 2.63 3.38 4.50 4.04

Construction & Real Estate 16 4.13 4.31 4.19 4.00 4.27 3.88 4.50 4.33 4.20 3.69 3.27 3.81 3.94 4.04

Education & Research 17 4.06 4.06 3.59 4.29 4.18 3.56 4.19 3.76 4.18 3.65 3.29 3.13 3.63 3.81

Energy & Distribution 11 4.73 4.64 3.55 4.36 4.36 3.70 3.80 3.78 4.40 4.18 3.40 4.33 4.11 4.10

Engineering & Design 9 4.11 4.56 4.22 4.11 4.22 4.11 4.22 4.11 4.11 4.00 2.67 3.33 4.00 3.98

Environment & CleanTech 15 4.33 4.13 3.47 4.07 4.13 3.71 3.93 3.77 4.00 4.00 3.00 3.46 3.69 3.82

Finance & Investment 6 3.67 3.67 3.33 3.17 3.33 2.50 3.33 3.40 3.20 3.50 3.00 3.40 3.00 3.27

Forestry & Wood Products 1

Health & BioTech 7 4.57 4.57 4.29 4.57 4.57 4.00 4.43 4.71 4.43 3.71 2.83 3.71 4.43 4.20

Human Resources & Development 6 3.83 4.33 3.50 4.00 3.83 3.00 3.67 3.50 4.00 3.00 2.56 3.17 3.67 3.56

Infotech & Analytics 27 4.30 4.44 4.19 4.44 4.44 3.89 4.19 4.07 4.44 4.04 4.00 3.44 4.22 4.05

Legal & Security 1

Management & Strategy 26 4.31 4.46 4.19 4.35 4.42 4.15 4.23 4.42 4.62 3.96 2.31 3.19 4.27 4.07

Manufacturing & Export 10 4.40 4.20 4.10 4.10 4.22 4.00 4.30 3.89 4.00 4.30 3.67 4.60 4.60 4.18

Tourism & Entertainment 5 3.80 4.60 4.00 3.80 4.40 3.40 4.20 4.00 4.60 4.00 3.00 3.20 4.60 3.97

Transportation & Logistics 6 4.33 4.33 4.67 4.00 4.33 4.50 4.17 4.50 4.67 4.33 3.00 3.83 4.33 4.23

Volunteers & NGOs 5 3.80 3.40 2.60 3.40 4.00 3.00 3.75 3.40 3.20 2.40 3.20 2.00 2.75 3.15

Weighted Average 4.24 4.28 3.93 4.16 4.23 3.77 4.12 4.05 4.20 3.82 2.90 3.46 4.02 3.94

Observations

• Legal and Forestry are not included in the analysis due to the small sample size.

• Most procurement features are important >4.00 to all industries with the least important <3.00 11. Change management and possibly 12. Incentives for economic development.

• The industries viewing incentives as important >4.00 are: Manufacturing, Transportation, Energy, and Infotech with Communications rating highest 13. Incentives for social development.

• The industry rating incentives as least important <3.00 is Volunteers & NGOs.

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INDUSTRY – Gaps in Expected-

Importance vs Received-Satisfaction

Public Procurement Practice features

N 1 2 3 4 5 6 7 8 9 10 11 12 13 Weighted Average

Agriculture & Food Processing 5 1.00 0.00 1.00 0.40 0.40 0.95 1.30 1.00 -0.4 0.80 0.40 -.20 -.30 0.49

Communications & Marketing 8 2.38 2.38 2.13 2.25 2.00 1.50 1.63 1.50 2.13 2.50 -.38 1.63 3.00 1.89

Construction & Real Estate 16 1.77 1.96 1.54 1.57 2.11 1.95 1.71 1.87 1.82 2.12 0.65 1.67 1.72 1.73

Education & Research 17 1.26 1.46 0.85 2.03 1.71 1.63 1.90 1.30 1.64 1.65 0.43 0.84 1.70 1.42

Energy & Distribution 11 2.18 1.91 0.82 1.82 2.00 1.40 1.10 1.00 1.6 2.82 0.80 1.56 1.44 1.57

Engineering & Design 9 2.11 2.27 1.65 1.11 1.65 1.97 0.94 1.54 2.25 2.71 0.38 1.76 2.29 1.74

Environment & CleanTech 15 1.98 1.70 0.90 1.64 1.56 1.56 1.47 0.94 1.23 2.21 0.08 0.71 1.28 1.33

Finance & Investment 6 1.83 1.33 0.33 0.50 1.17 0.67 0.50 1.00 0.60 1.50 0.00 0.80 1.20 0.88

Forestry & Wood Products 1

Health & BioTech 7 2.14 1.57 0.29 1.29 1.14 1.0 1.29 1.57 1.00 2.14 -.43 1.29 1.43 1.21

Human Resources & Development 6 1.50 0.67 0.17 1.50 0.50 0.80 0.67 0.83 0.83 0.50 -.67 0.50 1.33 0.70

Infotech & Analytics 27 2.05 1.80 1.44 1.87 1.87 1.42 1.29 1.68 2.12 2.22 0.23 1.30 2.33 1.66

Legal & Security 1

Management & Strategy 26 1.96 1.69 1.35 1.54 1.54 1.50 1.08 1.69 2.27 2.12 -.08 1.27 2.54 1.57

Manufacturing & Export 10 2.20 1.30 0.60 1.54 0.67 1.70 0.80 0.67 1.00 2.90 0.78 2.40 2.30 1.40

Tourism & Entertainment 5 0.80 2.00 1.80 0.90 1.60 1.20 1.60 1.80 2.00 1.20 0.40 0.80 2.40 1.46

Transportation & Logistics 6 2.50 2.33 2.33 1.53 2.17 2.33 1.50 1.67 2.83 2.67 0.67 1.67 2.33 2.06

Volunteers & NGOs 5 0.40 0.40 -.20 1.40 1.00 0.75 1.25 0.20 0.00 0.20 0.40 -1.0 -.75 0.23

Weighted Average 1.89 1.68 1.13 1.53 1.60 1.47 1.27 1.41 1.69 2.02 0.24 1.21 1.93 1.47

Observations:

• The industry gaps in public procurement features vary considerably with the highest >1.70 in Transportation, Communications, Engineering, and Construction. The lowest <0.70 are in NGOs, Agriculture and Human Resources and possibly Forestry and Legal.

• The highest industry gap among the procurement features is for 1. Timelines for bid preparation and for secondary features: 10. Incentives for innovation and 13. Incentives for social innovation. The lowest gap <0.70 is in 11. Change management with the highest gap >1.70 in 10. Incentives for innovation, 1. Timelines for bid preparation, and 13. Incentives for social innovation.

• Expectations are met or exceeded for several features by NGOs and by several industries for 11. Change management.

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Summary. Most public procurement features are viewed as important by all industries surveyed. Variations in importance may reflect objectives

specific to the industry, such as the importance attributed to social development in Communications. Gaps also vary considerably between industries

with the greatest gaps apparent in Alberta’s infrastructure industries of Transportation and Construction, Engineering and Communications.

c. LEVELS OF GOVERNMENT. Contractors view primary procurement features as important for each level of government and public

agencies. Gaps in expectations are apparent for bid feedback and incentives, particularly social development and innovation.

Contractors were asked to rate on a scale of from 5 – High to 3 – Moderate to 1 – Low and 0 – None, their familiarity with municipal, provincial and

federal public procurement practices in Alberta. The following analyses portray the views of contractors who rated their familiarity as Moderate 3.00 or

better with public procurement levels of government and public agencies.

LEVELS of GOVERNMENT AND PUBLIC AGENCIES – Rating of Expected-

Importance vs Received-Satisfaction Municipal

N=59 Provincial

N=71 Federal N=49

Public Agency N=44

Weighted Average

1. Reasonable timelines for bid preparation 4.25 4.16 4.36 4.28 4.25

2. Terms of service/supply: fair, clear, rational 4.43 4.36 4.34 4.53 4.41

3. Reasonable timelines for service/supply delivery 4.16 4.01 4.17 4.16 4.12

4. Ease of use and responsive: e.g.: electronic on-line communication 4.29 4.20 4.34 4.30 4.27

5. Evaluative criteria, e.g.: fair, clear, rational 4.33 4.25 4.39 4.33 4.32

6. Advance notice and helpful information 3.91 3.85 4.04 3.80 3.90

7. Reasonable pricing for labour and capital 4.30 4.25 4.46 4.31 4.32

8. Reasonable pre-qualifications: e.g.: insurance, location, resources, experience 4.26 4.09 4.27 4.17 4.19

9. Bid feedback, e.g.: timely, clear, rational 4.38 4.22 4.39 4.48 4.35

10. Incentives for innovation, e.g.: technology, partnering, compensation, project management

3.95 3.80 3.91 3.95 3.89

11. Clear process for change management 2.82 2.81 2.87 3.00 2.86

12. Incentives for economic development e.g.: location, jobs, salary levels 3.43 3.35 3.43 2.58 3.43

13. Incentives for social development, e.g. race, gender, education, religion 4.11 3.94 4.00 2.26 4.04

Weighted Average 4.05 3.95 4.08 4.08 4.03

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Observations:

• The importance of public procurement practice features average 4.03 within a narrow range of 3.95 to 4.08. What contractors view as

important- expected is consistent across each level of government and public agencies in Alberta.

• Most important >4.00 are the primary procurement features plus 9. Bid feedback and 7. Reasonable pricing and possibly 13. Incentives for

Social development. Less important <3.00 for contractors with each level of government is 11. Change management and for those familiar with

contracting by public agencies: Incentives for 12. Economic and 13. Social development. Such incentives may be less relevant than for the levels

of government.

Observations:

• Gaps are large >1.70 for several Secondary procurement practice features, specifically: Incentives for 10. Innovation and 13. Social development

in addition to: 9. Bid feedback, 1. Timelines for bid preparation, 2. Terms of service and possibly 5. Evaluative criteria

LEVELS OF GOVERNMENT and PUBLIC AGENCIES – Gaps in

Expected-Importance vs Received-Satisfaction Municipal

N=59 Provincial

N=71 Federal N=49

Public Agency N=44

Weighted Average

1. Reasonable timelines for bid preparation 1.85 1.75 1.93 1.79 1.82

2. Terms of service/supply: fair, clear, rational 1.79 1.64 1.77 1.83 1.74

3. Reasonable timelines for service/supply delivery 1.41 1.17 1.49 1.31 1.33

4. Ease of use and responsive: e.g.: electronic on-line communication 1.59 1.48 1.75 1.57 1.58

5. Evaluative criteria, e.g.: fair, clear, rational 1.63 1.56 1.86 1.84 1.70

6. Advance notice and helpful information 1.33 1.37 1.65 1.39 1.42

7. Reasonable pricing for labour and capital 1.21 1.19 1.50 1.28 1.28

8. Reasonable pre-qualifications: e.g.: insurance, location, resources, experience 1.57 1.43 1.65 1.61 1.55

9. Bid feedback, e.g.: timely, clear, rational 2.02 1.81 1.97 2.05 1.95

10. Incentives for innovation, e.g.: technology, partnering, compensation, project management

2.21 1.96 2.21 2.27 2.13

11. Clear process for change management 0.26 0.21 0.38 0.43 0.30

12. Incentives for economic development e.g.: location, jobs, salary levels 1.33 1.11 1.23 1.30 1.23

13. Incentives for social development, e.g. race, gender, education, religion 2.13 1.86 1.79 2.04 1.95

Weighted Average 1.56 1.43 1.63 1.59 1.54

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• Gaps in what is received vs. what is expected are overall consistent – ranging +/- 0.12 between levels of government and public agencies with

the province lowest.

• The smallest gaps <0.50 are consistently with public procurement practice of 11. Change management.

Summary. Contractors have a consistent view of what is important- expected as practiced by several levels of government and public agencies, namely

the primary practice features. Similarly, while large, gaps are consistent though gaps are apparent in incentives for innovation and social development.

Where objectives may differ – such as public agencies compared with levels of government, gaps are less apparent in what is expected and received.

d. ENGAGING CONTRACTORS

In the following analysis we assembled the profile of the organizations that are most and least likely to increase their involvement in bidding on government contracts employing a scale of 5 – High, 3- Moderate, 1 – Low, 0 – Not at all. All proportions are weighted. The section concludes with a sample of comments from each group.

PROFILE – INCREASING INVOLVEMENT IN BIDDING

HIGH - >3 LOW - <3 including 0 – Not at all

MODERATE - 3

OVERALL 27% 40% 33%

Declining interest 40% of contractors in public procurement compares with 60% moderate and expecting to increase.

LOCATION

% Edmonton Region % Calgary Region % Other

24% 38% 36%

18% 53% 35%

83% 17% 0%

The interest of public procurement contractors in Calgary may be declining with the proportion outside Edmonton and Calgary increasing.

RELIANCE

High – 40% 67% 24% 36%

Moderate – 28% 10% 55% 24%

Low - 32% 24% 21% 40%

Contractors expecting to increase their involvement in public procurement bidding (67%) are also the more reliant on winning bids (40%). Most expecting to decrease their involvement (55%) have a moderate reliance (28%). Those least likely to change – increase or decrease

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their involvement (40%) are among the least reliant (32%).

INDUSTRY

The top four industries familiar to public procurement contractors

Construction Management Infotech

Infotech Communications Management

Education Infotech Communications

Manufacturing Construction Manufacturing

Interest in bidding among contractors familiar with Manufacturing may be increasing; uncertainty is indicated among those familiar with Infotech and Construction. Decreasing interest is apparent with those familiar with Management and Communications.

GOVERNMENT familiarity > Moderate

% Municipal 45% 41% 41%

% Provincial 68% 77% 70%

% Federal 32% 40% 37%

% Public Agency 50% 41% 41%

Familiarity with public procurement practices is highest with the Provincial government for all three groups. Familiarity between groups is quite consistent, with a maximum of 9% between High and Low for contractors familiar with Provincial government and Public Agency procurement.

TRADE Agreements familiarity

NAFTA – 73% 64% 78% 74%

AIT – 48% 64% 34% 52%

CFTA – 44% 55% 38% 44%

CETA – 26% 23% 28% 26%

WTO-GDP - 21% 18% 34% 7%

Contractors with decreasing interest in public procurement are more than twice as familiar with the NAFTA trade agreement than with any other agreement and are more familiar than others with the WTO-GDP agreement. Uncertainty in current NAFTA negotiations may have a bearing on contractor expectations.

STAFF

No 18% 56% 33%

Sometimes - as needed 41% 19% 48%

Yes 32% 22% 19%

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The following comments provide additional insight as to contractor’s expectations and concerns:

Decreasing interest

• Many projects done with initial govt support (IRAP, SR&ED, etc.), but no follow-through on the Municipal level (Calgary

• We do many things that provide public benefits but have learned not to count on getting government support of any kind (Edmonton) AJ15

• No compensation in the organization for preparing an RFP (Edmonton) AN12

• We need more access to these contracts. The same orgs keep winning bids, there should be a tiered system that allows for new companies to win

new contracts. Right now it is just too much time to be given a keep trying we will remember you next time attitude. (Calgary NGO) AN19

• RFP responses typically involve different subject matter experts so who is involved in responding is dependent on the opportunity. (Edmonton)

AN25

• We have never made any bids. (Edmonton) AP5

• This includes responding to many EOIs and RFPs. I think that there is a bias against former government officials being given funding. (Calgary NGO)

AP15

• There are so many groups within the procurement system that the left hand isn't speaking to the right most of the time. (Calgary) BR4

• The pre-qualification process is flawed and gives an unfair advantage to some contractors. (Edmonton) BR8

• We enjoy our interactions with public service officials but none of our work has attracted any funding at all. In the past year, we made an

unsolicited pitch for a novel project that would advance a government priority area and we were told that it was a good project proposal but, if

they were going to fund that project, it would have to be sent out as an RFP and there would be no assurance that we would get the work.

(Edmonton NGO) BR15

Yes - dedicated 9% 3% 0%

Few contractors have staff dedicated to public procurement. Contractors responding to the survey are likely small. The contractors with increasing interest in public procurement have staff either dedicated or available. Those least likely are among those with no procurement staff.

BIDDING

Less than $10 thousand to $99.9K 23% 41% 50%

$100 thousand to $499.9 thousand 36% 32% 35%

$500 thousand or more 41% 26% 16%

Interest in increasing involvement in bidding is highest among the larger bidders and low to moderate among the smaller bidding.

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• Overall, my instinct is any government - PC or NDP - will default to past contractors and not embrace new entrants or smaller companies.

Proclamations of diversity in vendor selection ring very hollow. (Calgary) BR22

• This country has been consistently choosing minority groups, religions for decades. Giving preferential treatment to those who are not the best

qualified, but fulfill a political agenda. It is time to STOP being mediocre, and START hiring the best "person" or "company" for the job again.

(Edmonton) BR29

• Alberta has shown a surprising disdain for using provincial suppliers, to the detriment of the local economy. (Calgary) BR34

• The classifications are a challenge for our products, it appears the systems are designed for services, it would be ideal to have it split out or identify

biodegradable as a priority or at least have it identified. Also a buy locally approach would help as well. (Calgary) BR45

• Alberta Government Qualification forms are insanely HIGH EFFORT. Feels like half the contracts are wired. Never get anything out of massive

efforts PQRs. (Edmonton) BR49

• Overall, my instinct is any government - PC or NDP - will default to past contractors and not embrace new entrants or smaller companies.

Proclamations of diversity in vendor selection ring very hollow. (Calgary) BR22

• This country has been consistently choosing minority groups, religions for decades. Giving preferential treatment to those who are not the best

qualified, but fulfill a political agenda. It is time to STOP being mediocre, and START hiring the best "person" or "company" for the job again.

(Edmonton) BR29

• Alberta has shown a surprising disdain for using provincial suppliers, to the detriment of the local economy. (Calgary) BR34

Moderate interest

• We would like to win more, however not relying as it is a variable that we shouldn't commit to yet. (Calgary) AJ45

• Bigger (contracts) ones have gone out of province. (Edmonton) AP50

• The classifications are a challenge for our products, it appears the systems are designed for services, it would be ideal to have it split out or identify

biodegradable as a priority or at least have it identified. Also a buy locally approach would help as well. (Calgary) BR45

• Alberta Government Qualification forms are insanely HIGH EFFORT. Feels like half the contracts are wired. Never get anything out of massive

efforts PQRs. (Edmonton) BR49

• Consistently pricing is supposedly evaluated at 10%-20% but reality suggests pricing is 60%-70%. (Edmonton) BR50

• Methods of bidding (eg ITT, RFP, RFQ) are very cumbersome and difficult to identify exactly what the owner is asking for. (Edmonton) BR60

• It is our understanding that AHS only selects companies with a long history ... ours is only 30 years and they select US software which is expensive

and complex rather than supporting a business located in Alberta. (Edmonton) BR66

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Increasing interest

• We also have contracts which are of an on-going nature, such as the supply of annual services. (Central Alberta) AP85

• Loss of standing offers a loss to both government and contractors for loss of extensive pre-qualification and increase of wasted time. (Edmonton)

BR80

• The low bid process do not drive value for the tax dollar. (Edmonton) BR83

• The use of Flextrack has driven down rates by setting maximums. This is negatively impacting the consulting industry in so many ways and costing

tax payers millions of dollars in the process. (Edmonton) BR89

Summary. The contractor profile helps explain why 40% of the survey contractors indicated a decreasing interest in bidding on public contracts

particularly among the Calgary Region’s small businesses contractors lacking procurement resources in construction, infotech and management

services. The moderate and declining interest among larger contractors may be associated with uncertainties surrounding current inter-provincial and

international trade negotiations. Comments provide some insight into the procurement processes of concern including reference to perceived bias and

waste.

* * *

The next Section C. is comprised of an evaluation of the various objectives of public procurement in Alberta from the perspective of both the

administrators and contractors.

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C. Assessing Alberta’s Public Procurement Objectives

For assessing the objectives of public procurement in Alberta, we asked respondent to rate their level of agreement with 9 objectives. Note, the

objectives are each stated in positive terms. For discussion, each objective is analyzed and presented independently.

• Rating each of the 9 positive objectives on a scale from 5 – Agree to 3 – Neither to 1 Disagree

• Identifying the alignment and the gaps between the views of Contractors and Administrators

• Comparing how Contractor’s views differ depending on their various features as identified in Section A.

1. First, how do administrators and contractors view the objectives of public procurement?

Public Procurement Objectives – Ratings on a scale from 5 – Agree to 3 – Neither, to 1 –

Disagree. Listed in order of the declining gap – the alignment between the two groups.

Administrators N=11

Contractors N=81

Gap

Disaster Recovery. Disaster recovery planning should give priority to pre-qualifying of local suppliers. 3.09 3.16 -0.07

Economic development. Setting economic expectations (e.g.: jobs, location, salary levels) within the terms of procurement is appropriate for economic development.

3.00 2.89 0.11

Social development. Setting social expectations (e.g.: gender, race, education, religion) within the terms of procurement is appropriate for social development.

2.82 2.66 0.16

Transparency. Government purchasing is transparent, fair and free from conflict of interest. 2.64 2.20 0.44

Value for Money. Public procurement practices are effective for obtaining best economic value in the purchase of supplies and services.

2.45 1.95 0.51

OVERALL. Alberta government procurement practices are free from waste, fraud, and corruption. 2.73 2.20 0.53

Vision & Leadership. Procurement practices are aligned with the vision and values of the government. 3.18 2.43 0.75

Effectiveness. Government procurement and project management are well aligned. That is, deliverables are on-time, on-budget, and as specified.

2.91 2.10 0.81

Innovation. Rewarding creative options (e.g.: technology, partnering, project planning, compensation) within the terms of procurement is appropriate for stirring innovation.

4.09 2.56 1.53

Weighted Average 2.99 2.46 0.53

Observations

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• The number of Administrators responding is low (11); their responses are quite consistent

• Administrators are somewhat more (0.53) positive (2.99) with all the stated objectives than Contractors (2.46)

• The objectives with the lowest ratings align for both groups (blue): Value for Money, Transparency, and OVERALL plus Effectiveness for Contractors.

• The highest ratings but weak for both groups - at about 3.00, are Disaster Recovery, Social and Economic Development.

• The greatest gaps between the two groups are for the Innovation (1.53), Effectiveness (0.81), and Vision and Leadership (0.75)

• Both groups align – gap <0.50: o Agreeing >3.00 in the stated positive objective for Disaster Recovery o Disagreeing <3.00 (red) with the stated positive objectives for: Transparency (0.44) and possibly Social Development (0.16) and

Economic Development (0.11)

• Both groups disagree, Contractors disagree even more – gap >0.50 than Administrators in the stated positive objectives for: Value for Money (0.51), OVERALL (0.53), Effectiveness (0.81), and Innovation (1.53)

Summary Administrators and Contractors both disagree with most of the stated positive objectives of public procurement. The only exception is Disaster Recovery, for which both agree and rated highest. Each objective warrants some discussion particularly Value for Money that is rated lowest by both groups. Administrators rate more highly than Contractors the government’s objectives of Innovation, Vision and Leadership, and Effectiveness. Of concern is the generally low ratings for both Administrators and Contractors for the prime objectives of public procurement: Value for Money, Transparency, and OVERALL.

2. Next, how do Contractors differ in their views of public procurement objectives?

a) LOCATION. Contractors regardless of Region are aligned in their agreement with the Disaster Recovery objective and disagreement with

most of the other Public Procurement objectives

Public Procurement Objectives – Ratings on a scale from 5 – Agree to 3 – Neither, to

1 – Disagree. Listed in descending order of the objectives weighted average rating.

Edmonton Region N=53

Calgary Region N=16

Other N=5

Weighted Average

1. Disaster Recovery. Disaster recovery planning should give priority to pre-qualifying of local suppliers.

3.16 3.18 3.20 3.16

2. Economic development. Setting economic expectations (e.g.: jobs, location, salary levels) within the terms of procurement is appropriate for economic development.

3.02 2.89 1.40 2.89

3. Social development. Setting social expectations (e.g.: gender, race, education, religion) 2.68 2.44 3.20 2.66

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within the terms of procurement is appropriate for social development.

4. Innovation. Rewarding creative options (e.g.: technology, partnering, project planning, compensation) within the terms of procurement is appropriate for stirring innovation.

2.67 2.50 1.60 2.56

5. Vision & Leadership. Procurement practices are aligned with the vision and values of the government.

2.47 2.29 2.40 2.41

6. Transparency. Government purchasing is transparent, fair and free from conflict of interest.

2.33 1.89 1.80 2.20

7. OVERALL. Alberta government procurement practices are free from waste, fraud, and corruption.

2.19 2.28 2.00 2.20

8. Effectiveness. Government procurement and project management are well aligned. That is, deliverables are on-time, on-budget, and as specified.

2.00 2.22 2.80 2.10

9. Value for Money. Public procurement practices are effective for obtaining best economic value in the purchase of supplies and services.

1.96 1.94 1.80 1.95

Weighted Average 2.50 2.40 2.24 2.46

Observations

• With the exception of Disaster Recovery, most objectives were at or below 3.00 for all three groups

• The ratings for the public procurement objectives were comparable for the Edmonton and Calgary Region with the possible exception of Transparency, where Calgary disagreed more – gap 0.44.

• Three ratings of Other were exceptional: o Other disagreed (1.40) with Economic Development while the Edmonton Region was neutral (3.02) and Calgary Region (2.89) o Other disagreed (1.60) with Innovation more than both the Edmonton (2.67) and Calgary (2.50) Regions o Other agreed (3.20) with the Social Development objective while Calgary (2.44) and Edmonton (2.68) disagreed

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b) INDUSTRY. Contractors regardless of what industry they are familiar align in their agreement with support for the Disaster Recovery objective – with the exception of Finance and Construction, and disagreement with most of the other stated public procurement objectives particularly Value for Money

INDUSTRY

Public Procurement Objectives

Listed as per the previous table above

Rating on a scale of 5 – Agree to 3 – Neither, to 1 - Disagree

N 1 2 3 4 5 6 7 8 9 Weighted Average

Agriculture & Food Processing 5 3.60 3.40 3.20 2.60 3.80 2.40 2.20 2.40 2.40 2.89

Communications & Marketing 9 2.78 3.22 3.00 2.33 2.75 1.44 1.89 1.78 2.11 2.36

Construction & Real Estate 17 2.71 2.47 2.12 2.41 2.00 2.12 1.88 2.00 1.47 2.13

Education & Research 17 3.18 2.82 2.82 2.18 2.47 2.53 2.29 2.24 1.94 2.50

Energy & Distribution 11 3.80 3.55 2.91 2.67 2.45 2.55 2.56 2.55 2.00 2.73

Engineering & Design 9 3.22 2.78 2.78 2.67 2.33 2.33 2.56 2.22 1.67 2.51

Environment & CleanTech 15 3.43 2.73 2.80 2.00 2.87 2.80 2.87 2.73 2.33 2.72

Finance & Investment 6 2.33 2.86 2.71 2.57 3.00 2.29 2.43 2.29 2.00 2.51

Forestry & Wood Products* 1

Health & BioTech 7 3.13 3.88 2.38 1.88 2.75 2.25 1.88 1.75 2.00 2.43

Human Resources & Development 6 3.17 3.50 3.00 3.33 3.17 3.33 2.83 2.17 2.00 2.94

Infotech & Analytics 29 2.93 2.48 2.52 2.28 2.10 2.14 2.00 1.86 1.79 2.23

Legal & Security* 2

Management & Strategy 27 3.11 2.81 2.52 2.56 2.37 2.44 2.41 2.33 2.22 2.53

Manufacturing & Export 11 3.55 3.18 2.55 2.27 1.82 2.00 1.91 1.73 1.45 2.27

Tourism & Entertainment 6 3.00 3.17 3.17 3.00 3.00 2.50 2.33 2.17 2.17 2.72

Transportation & Logistics 6 3.83 2.00 2.83 1.83 2.50 2.17 2.50 2.33 2.00 2.44

Volunteers & NGOs 6 3.00 3.17 2.83 2.17 3.33 2.67 2.50 2.50 2.00 2.69

Weighted Average 3.13 2.89 2.67 2.35 2.49 2.34 2.29 2.17 1.95 2.47

*Sample size too small to consider including in analysis.

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Observations

• Industries show most support for 1. Disaster Recovery (3.13) though weak and mixed for 2. Economic Development (2.89)

• Industries least support >2.50: 9. Value for Money (1.95) and 8. Effectiveness (2.17) and the other prime objectives: 7. OVERALL (2.29) and 6. Transparency (2.34)

• Industry support is weak as well for 4. Innovation (2.35) and 5. Vision & Leadership (2.49)

• Most supportive of the Industries - though still weak <3.00, are: Human Resources (2.94) and Agriculture (2.89)

• Least supportive of the Industries >2.50 are in Construction (2.13) and Infotech (2.23), that disagree with all the objectives as does Finance (2.53).

• Also weak > 2.50, is support by Communications (2.36), Manufacturing (2.37) and Transportation (2.44)

c) LEVEL OF GOVERNMENT. Contractors most familiar with Levels of Government and Public Agencies align in their weak support for the Disaster Recovery objective and disagreement with most of the other stated public procurement objectives particularly Value for Money

Contractors rating familiarity >2

Public Procurement Objectives – Ratings on a scale from 5 – High

to 3 – Moderate, to 1 – Low. Listed in descending order of the objectives weighted average rating.

Municipal N=59

Provincial N=71

Federal N=49

Public Agency N=44

Weighted Average

1. Disaster Recovery. Disaster recovery planning should give priority to pre-qualifying of local suppliers.

3.14 3.37 3.10 3.23 3.22

2. Economic development. Setting economic expectations (e.g.: jobs, location, salary levels) within the terms of procurement is appropriate for economic development.

2.73 2.96 2.69 2.98 2.84

3. Social development. Setting social expectations (e.g.: gender, race, education, religion) within the terms of procurement is appropriate for social development.

2.76 2.85 2.57 2.73 2.74

4. Innovation. Rewarding creative options (e.g.: technology, partnering, project planning, compensation) within the terms of procurement is appropriate for stirring innovation.

2.37 2.62 2.35 2.48 2.46

5. Vision & Leadership. Procurement practices are aligned with the vision and values of the government.

2.26 2.51 2.27 2.53 2.39

6. Transparency. Government purchasing is transparent, fair and free from conflict of interest.

2.22 2.37 2.29 2.18 2.27

7. OVERALL. Alberta government procurement practices are free from 2.19 2.37 2.18 2.36 2.28

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waste, fraud, and corruption.

8. Effectiveness. Government procurement and project management are well aligned. That is, deliverables are on-time, on-budget, and as specified.

2.15 2.22 2.04 2.20 2.16

9. Value for Money. Public procurement practices are effective for obtaining best economic value in the purchase of supplies and services.

1.86 2.06 1.92 1.95 1.95

Weighted Average 2.41 2.45 2.38 2.52 2.48

Observations

• Contractors do not support the procurement objectives regardless of what level of government they are most familiar, with the exception of 1. Disaster Recovery (3.22)

• Least support >2.50 is for 9. Value for Money (1.95) and 8. Effectiveness (2.16) and the other prime objectives: Transparency (2.27) and 7. OVERALL (2.28)

• Support is weak as well for 5. Vision & Leadership (2.39) and 4. Innovation (2.46)

• Most supportive - though still weak <3.00, is: Public Agency (2.52)

• Least supportive >2.50 are Contractors most familiar with Federal (2.38) and Municipal Government (2.41) procurement

d) CONTRACTOR SUPPORT

In the following analysis we assembled the profile of the Contractors that agree and disagree most with the two prime public procurement objectives: VALUE FOR MONEY and TRANSPARENCY. The difference between the two is considered “uncertainty” – neither agree or disagree.

CONTRACTOR PROFILE – AGREE (5 and 4) AND DISAGREE (1 and 2)

Transparency. Government

purchasing is transparent, fair and free from conflict of interest.

Value for Money. Public

procurement practices are effective for obtaining best

economic value in the purchase of supplies and services.

AGREE DISAGREE AGREE DISAGREE

OVERALL – weighted average rating of all Contractors 21% 63% 8% 68% About 2/3rds of the Contractors disagree with both the Transparency and Value for Money objectives. Fewer Contractors agree with the Value for Money objective than for the Transparency objective.

LOCATION - weighted average rating of all Contractors

% Edmonton Region N=57 23% 58% 8% 65%

% Calgary Region N=18 17% 72% 11% 72%

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% Other N= 5 20% 80% 0% 80% Contractors in each of the Regions align with less agreement with the stated Value for Money objective than Transparency. Disagreement with the Transparency objective is least for the Edmonton Region.

RELIANCE – on winning bids. Contractors weighted average rating

High – 40% 22% 48% 9% 73%

Moderate – 28% 30% 63% 7% 56%

Low – 32% 13% 73% 10% 74% Contractors with the highest and the lowest Reliance on winning bids have the greatest disagreement with the stated Value for Money objective. A large 37% of those with a Moderate Reliance Neither Agree or Disagree with the Value for Money objective and 30% with a High Reliance neither agree or Disagree with the Transparency objective.

INDUSTRY – familiarity

The top four industries with the highest ratings by contractors familiar with public procurement

Human Resources – 63%

Communications – 89%

Tourism – 33% Construction – 82%

Health – 38% Transportation – 67% Volunteers – 33% Manufacturing – 82%

Management – 37% Infotech – 66% Human Resources – 25%

Engineering – 78%

Environment – 33% Health – 63% Agriculture – 20% Infotech – 75%

Contractors familiar with procurement in all industries disagree with the Value for Money objective - particularly Construction and Manufacturing, and somewhat less for Transparency with Communications strongly disagreeing. Other than Human Resources for Transparency with 63% agreeing, no industry agreed more than 33% with the Value for Money or 38% with the Transparency objectives.

GOVERNMENT – familiarity

% Municipal 22% 61% 5% 72%

% Provincial 23% 62% 8% 69%

% Federal 24% 57% 8% 69%

% Public Agency 20% 61% 2% 66% Regardless of familiarity with the levels of government, most disagree and few agree with the Transparency and Value for Money objectives. The proportion of Contractors agreeing with the Value for Money objective is considerably lower than the – also low, proportion agreeing with the Transparency objective.

TRADE Agreements – familiarity

NAFTA – 73% of Contractors 22% 59% 9% 66%

AIT – 48% of Contractors 31% 49% 8% 72%

CFTA -44% of Contractors 22% 61% 6% 75%

CETA – 26% of Contractors 19% 67% 10% 67%

WTO-GDP – 21% of Contractors 25% 56% 13% 63% Regardless of familiarity with various trade agreements, most disagree and few agree with the Transparency and Value for Money objectives.

STAFF – procurement

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No 23% 67% 10% 66%

Sometimes – as needed 23% 53% 7% 62%

Yes – including dedicated 10% 47% 3% 59% Regardless of whether staff are available for bidding, most disagree and few agree with the Transparency and Value for Money objectives. Contractors with procurement staff - likely the larger organizations, agree less than those without procurement staff with the objectives of both Transparency and Value for Money. Uncertainty – the proportion neither agreeing or disagreeing, is generally higher for the larger organizations.

BIDDING – increasing?

High – 28% 13% 74% 10% 74%

Moderate – 34% 30% 63% 4% 58%

Low including no – 39% 23% 45% 9% 73% Regardless of expectations on increasing/decreasing bidding, most disagree and few agree with the Transparency and Value for Money objectives. The proportion of Contractors with a Low to Moderate expectations to increase their bidding agree more with the Transparency objective than the Value for Money objective. Uncertainty is greatest for those with Low expectations (32%) for the Transparency objective. Whereas Uncertainty is greatest for those with Moderate expectations (38%) for the Value for Money objective.

BIDDING – average value

Less than $10 thousand to $99.9K 32% 65% 13% 53%

$100 thousand to $499.9 thousand 26% 56% 7% 70%

$500 thousand or more 0% 67% 0% 86% Regardless of a Contractor’s average Bidding value, most disagree/ few agree with the Transparency and Value for Money objectives. The larger the average bidding value, the lower the agreement with both objectives of Transparency and Value for Money, and the higher the disagreement for Value for Money.

The following comments provide additional insight as to contractor’s expectations and concerns with the public procurement objectives:

CONTRACTOR’S COMMENTS RE: THE OBJECTIVES

• While we are supplier of goods and services to federal (Parks Canada), Provincial, and Municipal governments, our greatest concern has been

with the local county which has a record of awarding contracts to the administration's friends, who are from outside of the county, and even

from the other end of the country. RFP's have had the specifications stacked to favour preferred suppliers, with no credit being given to local

suppliers. (Overall Rating 1)

• Favoritism, Political Correctness, corrupt leftist globalist thinking is destroying this country. We must start the dialogue of honesty, integrity,

compassion yet proven results as business standards in Canada continue to fall dramatically due to our politically correct globalist agenda.

Incompetence is all around us, and we must stand strong, be confident in our convictions as Canadians and 'right the wrongs' befallen our

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country, and within our corrupt government. Hire the right company for the job, stop hiring based on gender, religion or colour STOP THE

INSANITY! (Overall Rating 1)

• The sub-contractors are often at the mercy of the general contractors who use a reverse auction system. Also less and less contractors are

going to be bidding on government projects in the future as it seems to already be determined well before the bidding has started who the

project will already be awarded to. (Overall Rating 1)

• Government should not be involved. Set up crown corp with wide shareholder availability. Not just the crown. (Overall Rating 1)

• Provincial Procurement practices are corrupt and twisted to certain companies such as Procom. (Overall Rating 1)

• What is all this "e.g.: gender, race, education, religion". Good grief - these things should be irrelevant. (Overall Rating 1)

• Government employees protect their jobs, vacations, pensions, coffee and lunch breaks. They are grunts and not entrepreneurs taking risks.

Why would they want to change? (Overall Rating 1)

• Extremely ineffective on solutions oriented bids. Cookie cutter administrative only approach to procurement now. Under Service Alberta from

2000-2011 it appeared to be a more collaborative approach with the ministries and agencies with procurement providing consultative services

rather than a watchdog 'by the letter of the agreement' approach. (Overall Rating 3)

• On the last point it is more about waste, inefficiency and lack of any support for innovation. (Overall Rating 1)

• The feeling I get (from a company perspective) is that nobody with any vision is leading the charge which had led to apathy within government which has led to a huge waste of resources with nothing getting accomplished, meanwhile the companies are not able to act because they are getting killed by deaths of a thousand tax cuts. (Overall Rating 1)

• Most companies already know which company they want and often that company has input into the RFP build. Most public orgs avoid RFPs as too time consuming. They take an alternative route whenever possible. (Overall Rating 1)

• As above - concern over fraud has created a system that is inefficient and actually loses pre-qualification standards, due to loss of standing

offers. (Overall Rating 1)

• The thought you missed is “Is Alberta fair?” and with the lack of change management the answer is “No.” (Overall Rating 2)

• I give the current system a C+. It is still a case of "who you know" versus qualifications, innovation, diversity, and fairness. Doesn't matter what side of the political spectrum is in power, change is slow and not welcomed. (Overall Rating 3)

• There is substantial systemic waste. For example, Calgary-based DIRTT are world leaders in their field -- they have a world-leading system for helping to rapidly and cost-effectively build out the interior of hospitals but AB Infrastructure will not use them because their system requires three bidders and DIRTT has no competitors. So DIRTT outfits hospitals in the middle east while AB Infrastructure hires foreign companies to install inferior products at a higher price. (Overall Rating 4)

• Free of fraud and corruption but waste in inherent in the rigid processes. (Overall Rating 5)

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• Government procurement practices are not the issue, the blending and use of procurement as a public policy tool cause conflict. Government

needs to do a better job of understanding their business requirements and their role in execution/delivery/use, then allow contractors to bid

solutions instead of products (not every procurement is for a shovel!). (Overall Rating 5)

ADMINISTRATOR’S COMMENTS RE: THE OBJECTIVES

• Good procurement practices are needed. There needs to be a clear distinction between procurement for goods and services as being

separate from awarding grants to innovators. There are a lot of people in the system (Government and public agencies - Alberta Innovates

and post-secondary institutions) who have no clue what they are actually doing, why they are doing it. (Administrator - Overall Rating 1)

• I don't think there is much fraud or corruption at least in the areas I work in, there is certainly waste though. Poorly designed scoring

criteria on RFPs, no real idea of what something should cost within the procurement teams. (Administrator - Overall Rating 2)

• These questions are difficult to answer because they contain terms and concepts that require further definition. (Administrator - Overall

Rating 4)

Summary. Contractors and Administrators disagree with the stated positive objectives of public procurement. The Disaster Recovery objective is

the only exception. Otherwise, Administrators rate high – higher than Contractors, government’s stated objectives of Innovation and Vision &

Leadership, and Effectiveness. Surprising is the low rating Contractors have – considerably lower than Administrators, for the objective of

Effectiveness. Government procurement and project management are well aligned. That is, deliverables are on-time, on-budget, and as specified.

Otherwise, while rated higher than Contractors, Administrators support is weak for the other objectives – particularly Value for Money – that both

rate lowest. Of concern must be the generally low ratings by both Administrators and Contractors for the prime objectives of public procurement:

Value for Money, Transparency, and OVERALL.

The low agreement and very high disagreement by Contractors with all objectives - other than Disaster Recovery, is consistent for most Contractor

features with the possible exception of size. The disregard for the objectives of Value for Money and Transparency is highest for larger

organizations.

The comments reviewed indicate that the prime issues are with waste not corruption or fraud.

* * * The next Section D. Recommendations and Conclusion, contains a summary of the survey respondent’s recommendations and an overall conclusion.

33 | P a g e

D. Recommendations and the Conclusion

This - the concluding Section of the survey, identifies the respondent’s recommendations. They are presented in clusters associated with the primary

issues identified in the prior Sections re procurement practices and objectives. Note. The bullets that appear below after each recommendation are the

direct quotes as received by respondents with minor edits to fix spelling, punctuation, and evident grammatical errors. Where corporations were

identified, their names have been deleted.

With the exception of the objective of Disaster Recovery, both Administrators and Contractors agree that the objectives of public procurement are not

being met and that there are serious flaws in public procurement practices. These perspectives are quite consistent for all Contractors.

The following Section D presents the recommendations of the Contractor's and the Administrator's for improving public procurement. The following

word cluster highlights the overall concerns and associated recommendations. Each are then presented and discussed independently.

1. Acknowledge the support of Administrators and Contractors for the Disaster Recovery objective. When disaster strikes, local businesses usually

take the brunt of the impact. Disaster plans and recovery efforts should engage local businesses in helping the community recover.

2. Give Alberta’s small business a fair chance – commit to innovation. Government’s use of social and - to a lesser extent, economic incentives are

generally resented by contractors. Such incentives are viewed to be in conflict with the pursuit of best value. If incentives are, however, to be

employed then small business should expect that incentives be included to redress their issues.

• It is hard to tell how effective government procurement practices actually are. There are a significant number of large multi-national

companies that seem to get the greatest benefit, and get high returns on their services. There does not appear to be any simple means for

Alberta innovators to easily serve Alberta public sector procurement activities.

34 | P a g e

• Small companies often cannot compete because of the requirements stipulated by government which are not translatable. The end result is

eliminating small companies from the ability to bid. Have governments be aware of the discriminatory practice and alter requirements.

• More support of local suppliers.

• Get rid of large outsourced contracts to companies like … edited out

• We need more small contractor access to government bids! investment in new ideas!

• In order for the Alberta economy to diversify itself from Energy/ O&G we have to start walking the walk around supporting local

entrepreneurship. Critical to this is buying locally. We have to value it and make it a priority.

• Policy updates that allow for and prioritize a "try first + buy first" culture are needed. Enough rhetoric.

3. Value for Money requires a commitment to Innovation.

Throughout the survey reference is made to the merit of innovation in advancing the economy and adding value. Innovation is central to government's

objective of providing Vision and Leadership. Yet, Contractors view Innovation as compromised in the practice and objectives of public procurement.

Comments frequently reference "waste" as the basis for the very low support for this objective. While several recommendations can be cited to redress

the shortfall, most evident is the merit of innovation.

• In many cases, the request for proposals should define the problem and let industry bid with solutions (i.e innovation).

• Once a technology direction is set within a ministry they should not be forced to open the competitive process to every alternative provider in

the market.

• Alberta Innovates (i.e. the tax payer) invests 200+M each year into R&D and commercialization yet the (health) procurement system is so risk

adverse these investments become questionable as companies are forced to find first customers in other provinces or countries.

• I think the government should do three things:

o 1) make a list of innovative procurement from Alberta companies

o 2)dedicate 5-10% of procurement to innovative Alberta companies

o 3)create plug and play centres to demonstrate innovative Alberta technology Value for procurement dollars rather than adherence to

a process

• More openness to new products and processes proven globally versed Alberta only.

• The three bid process precludes Alberta entrepreneurs from submitting new technologies that are unique as they have no comparable

bidders. This not the way to grow innovation in Alberta.

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• Push for more RFI prior to making a decision on products or solutions. This will help open the opportunities to see ideas and options that may

not be known by the department staff making these decisions.

• The AB Government should direct AB Infrastructure to sole source products from AB innovators when those innovators can provide a superior

product on a timely basis at a lower price. (e.g. DIRTT).

• When an innovator brings an unsolicited project proposal to the government that would help address priority areas for the government, it

should be seen as intellectual theft if the government responds by releasing an RFP to deliver the project that the innovator brought to it.

Such intellectual theft causes innovators like us to avoid dealing with the AB Government at all.

4. Ensuring Transparency requires unbiased oversight. A periodic external review is needed for addressing the distrust and suspected favoritism, bias,

and waste acknowledged by Contractors and Administrators.

• While rules are on the books to regulate purchasing practices, they are either not being enforced or there is no oversight being provided by a

higher level of government, nor is there a complaints process in place.

• I would recommend an audit or review of the procurement processes. Specifically the use of Flextrack, the procurement process used to

engage this service, the benchmarks used to determine value and achievement of results, the cost benefit analysis, compliance with GST

regulations, conflict of interest, etc.

• A willingness to have politica and senior government officials with industry around the table for open debate on how to be better.

• Regarding municipal IT procurement - get rid of having only 4 pre-qualified vendors and allow all vendors to compete.

• Regarding provincial IT procurement - get rid of … edited out, it’s a bad idea and is killing IT in Edmonton.

• Some municipalities use the process for finding the cost of a project for budgeting purposes, then disqualify all bidders and repost the work

later in the year or in the following year.

• The Procurement Spectrum should be re designed with a Oversight component that includes a cross section of public, private, government, and

elected members.

• Provincial GoA’s procurement practices, especially IT Services are corrupt-filled with biases-definitely not competitive--there are many unfair

and biased cases that were brought to the GoA procurement management’s attention - which were quickly and secretly dismissed-without any

clear and transparent explanations. A very biased and non-transparent set of practices -An ongoing issue and concerns that has never been

addressed nor resolved because of clever cover-up.

• Developing proposals in many cases is a waste of time because the bureaucrats have defined the requirements to favour the preferred supplier.

36 | P a g e

5. Minor changes to public procurement practices should be considered to improve overall efficiency. Several practices core to obtaining Value for Money are identified as in need of review and removing inefficiencies contributing to waste and distrust. Heavy weighting on price is frequently mentioned and Flextrack is identified as an experiment gone wrong.

• More open to information

o We find that typically at the time of close there is demand for information that could be supplied after the close, which would help with

getting more competitive numbers.

o More modern processes such as e-submissions, opportunities to clarify requirements up to release and even during bid processes

needs to be provided.

• Clarity of Work

o Clear work scope should be included in the walk-thru.

o Provide procurement documents that are simple to understand (without legal jargon) and improve the fairness of evaluations.

o Many of the requirements posted though the procurement process are complicated and require access to the people who are

responsible for the delivery.

• Certification

o All evaluations should be done without any vendor information, and all projects/procurement over $5000 should require a qualification

process. Still today we say hundreds of projects and agreements made or extended without due process.

o Procurement is very heavy on asking for certifications and making them conditional for winning contracts. Contracts should be

reviewed on merit by qualified personnel and certifications should not be used as a crutch in making decisions. Some RFPs and

contract(er) requests are so heavy on certifications plus in such a large number for one contract, that it makes it hard for smaller

organizations to compete on merit with large companies.

• Qualifications

o Procurement should be qualification rather that cost based. Low cost providers are not always best.

o Move to Qualifications Based Selection models that remove price out of the equation and then do the work under collaborative

delivery models such as progressive design build, integrated project delivery, or modified design build.

o Make budget public for each procurement. Stop making price a criteria.

o The qualification process should be more transparent.

o Bring back standing offers with a large pre-qualification process, and then streamline individual contracts to these contractors.

o The current procurement process in the IT industry has moved to excessive mandatories and the requirement to write an exam to

quality. What does not make sense is that there is a preferred vendors list under FasTrak process. This list has become a mailing list and

does not ensure that government is identifying qualified vendors. In the absence of pre-defined vendors, each bid needs to be

37 | P a g e

responded to as if it is a raw submission and does not provide any assurance to the Government Departments that the vendor is a

proven supplier.

o Government must have an up-to-date list of suppliers with details of their qualifications and must have a mandatory requirement for all

providers to register with the Government.

o Applicants should be required to have a full time current management personnel presence in the province to apply.

o Flextrack is a major disincentive and should have it’s payment terminated

• Simplify processes and educate administrators

o Simplify processes and reduce redundancy

o Better education for RFP creators.

o Budget maximum thresholds are too rigid, as a result public projects are delayed.

o Make the procurement process easier to encourage more public tenders for consulting related services or IT related services. Orgs just

use other routes to avoid RFPs or keep using prequalified lists and favoritism to the big four consultant firms.

• Economic Development

o Stop taxing people to pay for an innovation and procurement system that doesn't work.

o Lower taxes, let the companies keep the money and provide tax incentives for buying equipment and a further incentive for buying

Canadian made equipment.

o Foster the manufacturing system and let people keep the money so they spend it and support consumer spending.

o Stop taxing everyone to death as it's just a slow painful decline to the end.

• Social Development – mixed responses

o There should be a preference to providers managed and owned by women and visible minorities.

o Hire based on the best person/company for the job - period.

o STOP THE INSANITY OF HIRING BASED ON PERCENTAGES OF MINORITY, RELIGION OR COLOUR. It has infiltrated our infrastructure, our

government, and now our very way of life. Political correctness must end - or western civilization will be destroyed.

o A model similar to the approach used in B.C. of project labour agreements will have more women and indigenous people involved in

the construction of public infrastructure.

• Transparency – waste and bias

o There needs to be a sealed bid tendering process.

o The sub-contractors should be submitting separate bids from the general contractor.

o There should no longer be a reverse auction system used.

o More transparency

38 | P a g e

o Suggest recording any meetings with staff if there is a transparency concern.

o More transparency.

o Many of the Provincial projects feel like someone has the inside track, so they should stop wasting our time and just say so, like the

Feds do with ACAN.

o Government should take back the responsibility of running and managing IT projects, bias toward multi-nationals is killing Edmonton’s

independent contractor IT industry.

o Recent bid had the bidders meeting (which was good) halfway through a three week response window. The response was very

complex and yet they would not extend even one week. When they RFP with minimal response time, I'm likely not alone in assuming

the project is wired and they are just going through the motions. How is this fair. They waste far too much time on the RFP and leave

no time for the bid.

6. Modernize Alberta’s Public Procurement. Is public procurement broken? That $Bs are being wasted particularly in construction and infotech is

acknowledged - and public. The level of non-support for public procurement throughout the survey and frustration among contractors is palatable.

Several recommendations hint at the value of learning from others and collaborating for modernizing public procurement in Alberta.

• Program similar to Federal BCIP program for Alberta produced products

• The current design-bid-build procurement system is outdated and not reflective of responsible use of public funds.

• Get away from conventional Design - Bid - Build delivery models which do not encourage collaboration.

• Modern systems such as IPD better maximize projects outcomes leading to better overall project execution.

• Current entrenched delivery models are a race to the bottom and provide NO VALUE for $.

• Encourage relationship building and trust between those that procure, those that design, and those that build.

• I suggest having a Procurement Committee that equally includes government official and members of the public with experience in the various

aspects of procurement (NOT just people from large companies). The members would work on each request and provide advice, oversight of

govt practices-->act as Oversight body. (Administrator)

7. Nothing to add – though frustration is apparent. The following comments were received in the request for recommendations, but are not

constructive:

• No point at this time! It would be futile...

• Nothing further.

• NO.

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• No

• no

• I think if this province wants to diversify it needs to do more than talk which is all politicians appear to do .. that and try to stay in power.

• Municipal procurement is worse than its provincial counterparts.

• Not at this time

• Public procurement in the areas I've worked with are constricted and ineffective.

• Small firms take greater risk than large firms if preparation effort is unfunded/unsalaried

• Get government and bureaucrats out of the business

• Visit the minster, join the party

• I have a ton that we could go through.

8. Survey discredited. We can do better During the survey we were criticized for the broad distribution of the survey and the survey’s leadin title “Is Alberta’s Public Procurement Broken?

• Re-writing the survey. (Administrator)

• Leading (the survey questionnaire) with public procurement is a source of waste, fraud and corruption discredits and biases this survey. It is

NOT a factor of large financial flows. Procurement problems are created by business lines and procurement rules having competing interests

internal to government. (Administrator)

Conclusion. The survey was designed to obtain an independent view of public procurement in Alberta. It was triggered by reports of waste and

repeated complaints about public procurement bias received by ABCtech. The objective has been met and the results too obvious and significant to

ignore. What is not so obvious is how to re-establish trust among the various stakeholders in the system. Of the array of recommendations cited above,

these would appear to be the more reasonable for starters:

7. Establish Oversight. Establish standard expectations and expect all bidders to complete a simple anonymous evaluation of the procurement

process accompanying each bid.

8. Continuous Improvement. Engage a 3rd party to conduct an audit of the public procurement system – it’s practices and objectives engaging

contractors and administrators. Target the gaps and follow-up on improvements annually. Propose recommendations and standards.

9. Engage Industry. Review all public procurement practices with the intent of increasing small business engagement, promoting innovation, and

incenting collaboration/partnering.

40 | P a g e

10. Special Consideration for Emerging Technologies. Emerging technologies are challenging all public procurement practitioners to remain up-to-

date on the latest innovations. This is particularly true in information management affecting all industries and all departments - healthcare in

particular – given the extraordinary costs and waste reported in the development of health information systems. The rate of change is so great

as to make the task of encouraging innovation while also containing costs, managing risk and avoiding waste.

11. Listen. The Government of Alberta should establish an Industry Advisory reporting to the Minister of Service Alberta with responsibility to file

an annual report with the Minister and the public on the status of public procurement.

12. Learn. Host an annual conference for stakeholders to be exposed to best practices in public procurement

Public procurement spends $Billions annually and is fundamental to public services throughout the province. It is viewed with distrust and needs fixing.

There will be those who rely on the status quo, who will resist reform. However, with the shared objectives of Value for Money and Transparency and

Effectiveness including a high regard for Alberta enterprise and innovation, the proposed recommendations should be widely accepted.

Prepared by:

Alberta Council of Technologies Society

October 20, 2014

The Missing 'M' in SME - Why Alberta's small

technology businesses fail to grow

2

Preface

Small and medium enterprises (SMEs) are viewed to be significant contributors to innovation, job

creation and the foundation of a competitive capitalistic economy. However, a characteristic of SMEs is

their high failure rate, with even fewer survivors growing from small to medium - 99+ employees. The

Alberta Council of Technologies Society (ABCtech) exists to diversify Alberta's economy through the

commercialization of emerging technologies. As such we are very interested in what might be done to

improve the survival and growth of small businesses - hence our adoption for 2014 of the theme: "The

Missing 'M' in SME - Why Alberta's small technology businesses fail to grow". This report contains the

results and recommendations derived from a survey of our subscribers and a series of panAlberta site

consultation workshops with SMEs.

We want to express a sincere thank you to the many project contributors including ABCtech's subscribers who completed the Feb/Mar On-line survey and the Institute of Management Consultants Alberta for funding - and Patrick Binns in the design, of the site consultation workbooks. Others helped serve as workshop co-hosts. Thank your for arranging the site consultations and for tolerating the many emails of the Project organizer and facilitator. You include: Drayton Valley: Lisa Fox - Sustainability Resources Ltd. and Wanda Compton - Brazeau County; Medicine Hat: Peter Wallis - Medicine Hat College, Sean Blewett and John Stroh - APEX Southeast Alberta Regional Innovation Network; Lethbridge: Sandy Lyons - Solving Debt and Renae Barlow - tecconnect/ Choose Lethbridge; Edmonton: Shauna Feth - University of Alberta's Family Business Institute and Bryanna Kumpula - Agriculture & Food Council of Alberta; Calgary: Lisa Corcoran and Megan Zimmerman - Calgary Economic Develop-ment and Kelly Sansom and Peter Garrett - Innovate Calgary; St. Albert: Dar Schwanbeck - Northern Alberta Business Incubator (NABI) and Lynda Moffat - St. Albert Chamber of Commerce; Edmonton - University of Alberta: Alexander Suen - ABCampus and Qasim Rasi - entrepreneurship HUB; St. Paul: Paul Pelletier and Stuart Leitch - Portage College and Reuel Thomas - Lac La Biche Community Futures; Fort McMurray: Lisa Slade - Regional Municipality of Wood Buffalo and Debbie Hahn - Northern Alberta Aboriginal Business Association and Diane Slater - Fort McMurray Chamber of Commerce and Kenton Price - Wood Buffalo Community Futures and Kevin Nagel - Keyano College. Also making a significant contribution are those who cared to prepare articles serving to enrich the issues identified and clarify the recommendations: Esir Prente, Robert McGarvey, Milan Prpric, Allan Hamernick, and Michael Flood. We also want to acknowledge and express our appreciation for the guidance received from Nicole Martel, Geoff Ritchie and Shaun Peddie of Alberta Innovation & Advanced Education and insights shared by Richard Truscott through his presentation to our AGM on behalf of the Canadian Federation of Independent Businesses - "Sizzle or Substance - The Role of Small Bussiness in Diversifying Alberta's Economy" Thank you all! We of course must clarify that ABCtech takes full responsibility for the contents of this Report. We hope we have met the expectations of the many contributors in our digesting of the vast and varied input and in meeting the even greater challenge of crafting meaningful recommendations for the survival and growth of Alberta's small technology businesses. As an industry association we invite you, the reader and those in your network to consider the impact you are having on small business start-ups and survivors. Sincerely, Alberta Council of Technologies Society

3

Executive Summary

Small businesses have historically failed at a high rate, with survivors failing to grow at an even higher rate. Failure weeds out some, and serves to season others. Early-stage failure weeds out many who might otherwise put later stage investors – including banks, at risk. Yet SMEs play a significant role in the commercialization of technology, job creation and innovation. By better understanding what contributes to small business failure, measures may be taken to increase their survival and growth, thereby enhancing the contribution of SME's to diversifying Alberta's economy. During 2014 the Alberta Council of Technologies Society (ABCtech) conducted a year-long, panAlberta consultation with SMEs. The project was comprised of an On-line survey of ABCtech's subscribers "sharing an interest in the commercialization of emerging technologies" and a series of panAlberta, On-site workshops for SMEs. The project served to engage and inform dozens of agencies and hundreds of Alberta interests. It concluded with this Report on small business growth, its relevance, and what's important and available, internal and external factors impeding growth and agencies viewed as helping. The report includes several articles contributing to further clarification of the issues, recommendations and proposals. The Report's recommendations - and associated proposals, address issues of human resources, small business financing, policies and practices:

1. Human Resources. Improve communications and relational skills for knowledge-based students

and graduates, professions and industries.

2. Innovation Zones. Collaboration should be encouraged and small business clusters developed

for establishing and evaluating the success of designated innovation zones.

3. Funding Innovation. Cultivate local and regional networks of early stage investors and mentors

and restore the role of banks in commercial lending.

4. Policies & Practices. Revise procurement and regulatory, advisory and funding practices to

support the development and retention of Alberta innovation and innovators and the attraction

of foreign partners.

A key proposal – 2.1, is for ABCtech to facilitate collaborative economic development between jurisdictions for establishing a model Innovation Zone - a creative economy.

Proposal 2.1. ABCtech should facilitate establishing a model Innovation Zone compatible with the Zone's socio-economic vision featuring collaborative economic development and the integration of science and culture, technology and arts enterprises AND development of the associated infrastructure, including a network of domestic and foreign investors to support small business retention and attraction and an associated network of small business incubators.

The initiative is comprised of forming small business clusters, extending the reach of networked incubators, engaging foreign investors and cultivating domestic angels. It also features engaging culture and science, arts and technology interests. The model draws on evidence for increasing the survival of small business, their successful growth, and thereby contributing to diversification of Alberta's economy.

4

Table of Contents Page

Preface 2

Executive Summary 3

Table of Contents 4

A. Introduction 5

B. On-line Survey and Site Consultations 6

1. The On-line survey's conduct 6

2. Follow-on site consultation workshops and schedule 6

3. Site Co-host's roles 8

C. Survey Respondent's Profile 8

1. Industries of interest 8

2. Operating an SME? 8

3. Exporting services/products? 9

D. The Relevance and Importance of Growth 9

1. Relevance of growth 9

2. Currently growing? 9

3. Interests of growing enterprises 10

4. Interests of no/slow growing enterprises 10

5. What is/is not important for growth? 10

E. Impediments to Growth 10

1. Availability impeding growth? 10

2. Important and impeding growth? 11

F. Sources of Help and Setting Priorities 11

1. Who are helping and who are impeding growth? 11

2. Priorities for survival and success 11

G. Site Consultation Issues - Nine in All 12

H. Recommendations - We Have Four 14

1. Human Resources 14

2. Innovation Zones 15

3. Funding Innovation 16

4. Policies & Practices 16

APPENDIX

A. The "Growing" Challenge - from Starting-up to Growing-up – Esir Prente 18 B. Sizzle or Substance - The Role of Small Business in Diversifying Alberta's Economy 19

C. SME Feb/Mar Survey of ABCtech's Subscribers 19

D. SME Site Consultation Workbook including Survey Results 20

E. How Banks Can Help Canada's SMEs – Robert McGarvey 34

F. Establishing a Model Innovation Zone – NW Innovation Zone Advisory 36

G. Aggregating SMEs and Growth - The Alberta Way - Milan Prpric 36 H. The Networked Business Incubator – Anne Bøllingtoft and John P. Ulhøi 37 I. Human Capital Analytics – The Serial Entrepreneur – Allan Hamernick 37 J. What Role For NGOs in Growing SMEs? – Michael Flood 38 K. Clusters of Entrepreneurship and Innovation – Aaron Chatterji, et al. 39

5

A. Introduction

"The Missing 'M' in SME - Why small technology businesses in Alberta fail to grow" is the theme

of the Alberta Council of Technologies Society (ABCtech) for 2014 and the subject of this

Report. The theme is timely given the interest in Alberta and across Canada in the commercial-

ization of technology in all forms and - more specifically, the associated role of small business in

innovation and job creation.

Given ABCtech's mission and 15,000 subscribers, and given our independence from government

and corporate influence, we viewed that by sampling our subscribers and canvasing others -

also sharing an interest in small business, science and technology, that we would better

understand the issues of small business survival and success. This report contains what we

learned and fitting recommendations for small businesses that would contribute to advancing

the commercialization of technologies in Alberta.

Recent attention given to small businesses has revealed a number of issues associated with

their survival and success. See Appendix A. The Growing Challenge by Esir Prente and B. Sizzle

or Substance - The Role of Small Business in Diversifying Alberta's Economy by Richard Truscott.

A high failure rate among start-ups continues across Canada, where only 2 in 10 start-ups survive five years, and only 1-2 of 100 survivors ever grow to become medium-sized enterprises of more than 99 employees. The ratios have been consistent over time and vary little across all the provinces.

A as tangible assets have declined, commercial and industrial lending by banks have fallen to 18% from 60% in the last half century

High youth and indigenous unemployment and rising income disparity prevail between generations

Under-employment and out-migration are wasting Alberta's investment in talent - including new PhDs

Low rates of entrepreneurship prevail as labour is drawn into trades to support Alberta's lucrative carbon energy economy

Small "lifestyle" enterprises have little interest in growth or mergers and often without succession plans, freezing their development.

The high failure rates and the low proportion small businesses growing to medium are not new,

but the relevance of their failure and failure to grow has increased in importance. Alberta

cannot rely forever on its carbon gifts, but must learn to participate in the increasingly

competitive global economy. Product innovation and job creation in and outside Alberta’s

industrial economy are critical today and in preparing Alberta for a post-carbon age. Improving

the survival and growth of small business as an innovation and job generator and receptor are

important.

6

Note as well the opportunities:

Baby-boomers are retiring - many with time, capital, networks and knowledge to share

New technologies are emerging and converging that if anticipated, can be an opportunity and if not, VERY disruptive

Competition and market forces are ever-more demanding with emerging markets adding to the fray

The knowledge economy can be a fundamental contributor to GDP and appealing to Alberta's well-educated, multicultural, young population

Banks are prospering, interest rates are historically low, and the economy is recovering from this generation's deepest recession

More immediate pay-back are expected by private investors and publicly funded research

Governments are aware that globalization of commerce has increased the competition for innovation, talent and capital, increasing interest in diversification through the commercialization of emerging technologies.

In recognition of the critical role played by small technology businesses in innovation and their

high failure rate, ABCtech undertook a year-long campaign to elevate awareness of the failure

issues. The Campaign was designed to generate recommendations for concrete action to

reduce the failure rate of tech start-ups and sustain the growth of survivors adding to an

increase in medium enterprises.

B. On-line Survey and Site Consultations

1. The On-line Survey's Conduct. The consultation was launched with an On-line Survey in

February/March of ABCtech's subscribers - Appendix C. The Survey results were

incorporated into a workbook - Appendix D. for guiding the conduct of workshops

across the province.

2. Follow-on Site Consultation Workshops and Schedule. In April/May and September/

early October 2014, ABCtech workshops across the province, engaging entrepreneurs,

SMEs and others with an interest in their plight in a conversation about starting-up,

surviving and succeeding with a specific interest in: (1) why small technology businesses

fail to grow, (2) whether the lack of growth is viewed as a problem, and if a problem,

who might do what to resolve it and (3) the implications on small business growth of

investors seeking early exits? Local organizations were distributed notice of the

panAlberta site consultations by ABCtech. Co-hosts responded and the following

schedule guided the conduct of the On-site consultations.

7

“What do small technology businesses need to grow?” This 1.5-hr. workshop will hi-lite the findings of the

panAlberta survey RESULTS HERE digging deeper to learn what you think! Site consultations are planned

for Alberta communities - April through September, with a final industry report to be released in the fall.

Register $25 at

www.abctech.ca/sme-site-consultation

SCHEDULE - SME Site Consultations

Helping small technology businesses grow

LOCATION

Local co-Hosts Status Date Time Location Address

Drayton Valley

Town of Drayton Valley & Sustainability Resources Ltd.

COMPLETE

Apr 25th

4:30-6:00pm

Norquest College: Drayton Valley at 5056 – 50

th

Avenue

Edmonton U Alberta: Business Family Institute & Agriculture & Food Council of Alberta

COMPLETE

May 6

th

7:30-9:00am

Enterprise Square, Hudson’s Bay Building, Jasper Avenue

Medicine Hat

Medicine Hat College & Southeast Alberta Regional Innovation Network

COMPLETE

May 7

th

4:30-6:00pm

The Courtyard Room, Medicine Hat College, 299 College Dr. SE

Lethbridge University of Lethbridge & Lethbridge Chamber of Commerce

COMPLETE

May 8

th

8:00-9:30am

Tecconnect building located at 3582 – 30

th

Street North

Calgary Innovate Calgary & Calgary Economic Development

COMPLETE

Sep 11th

7:30-9:00am

Alastair Ross Technology Centre, 3553-31 St. NW

St. Paul Portage College & Community Futures: St. Paul/ Lac La Biche

Cancelled

Sep 17th

6:30-8:00pm

Portage College, 5205 – 50

th Avenue, St. Paul

Edmonton eHub and ABCampus COMPLETE

Sep 18th

7:30-9:00pm

eHUB 9007 on the Univ. of Alberta Campus

St. Albert Northern Alberta Business Incubator & Chamber of Commerce

COMPLETE

Sep 23rd

7:30- 9:00am

200 Carnegie Drive

Fort McMurray

Fort McMurray Chamber of Commerce, Wood Buffalo Community Futures and Economic Development, No. Alberta Aboriginal Business Association

COMPLETE

Oct 2

nd

4:30-6:00pm

and 7:00- 8:30pm

Keyano College - Elements Room at 8115 Franklin Avenue

8

3. Site Co-host's roles. The Co-hosts provided:

Marketing. Notifying their members and associated networks of the event, distributing an electronic poster specific to the location

Locating. Securing a site, date and time for the local workshop

Welcome. Introducing and attending a 1.5-hour, 25 max. attendee workshop ($25 registration fee per attendee)

Editing. Co-hosts were provided an early draft of the industry report.

ABCtech provided the workshop facilitator and electronic site-specific posters. The workbooks were provided by the campaign co-host, the Institute of Certified Management Consultants of Alberta.

C. Survey Respondents' Profile

The industry interests of the 169 subscribers who responded to the survey are illustrated

below. Appreciate, the survey was conducted of ABCtech's subscribers - sharing "an interest in

the commercialization of emerging technologies" and the survey was generally known to

members of the Institute of Certified Management Consultants of Alberta.

1. Industries of interest? The respondents to the On-line survey are most familiar with Management, InfoTech, Energy, Engineering and Research. The topic of small business survival and success is of greatest interest to Managers and Engineers as the proportion that actually responded exceeded their representation among ABCtech subscribers. The top 3 industry interests of those –

Surveyed vs Responded Management & Strategy 4.4% vs 30% +25.6% Engineering & Design 2.5% vs 25% +22.5% Manufacturing & Export 1.5% vs 16% +14.5% Agriculture & Food processing 1.6% vs 15% +13.4% InfoTech & Analytics 15.1% vs 28% +12.9% Energy & Distribution 12.5% vs 25% +12.5% Communications & Marketing 5.2% vs 17% +11.8% NGOs – Non-government organizations 2.8% vs 14% +11.2% Construction & Real Estate 3.1% vs 14% +10.9% Government & Policy 8.2% vs 17% + 8.8% Education & Research 12.2% vs 20% + 7.8% Health & BioTech 4.8% vs 12% + 7.2% Finance, HR and Legal 11.0% vs 17% + 6.0% Environment & CleanTech 10.7% vs 16% + 5.3% Entertainment & Hospitality 1.6% vs 6% + 4.4% Forestry & Wood Products 1.1% vs 5% + 3.9% Transportation & Logistics 1.6% vs 4% + 2.4%

2. Operating an SME? SME operators are well represented among the entrepreneurs and operators of a micro (1-5 employees) or small (6-99) or medium (100+) sized business.

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73% of respondents were either starting up or operating a micro (36%), small (34%) or medium (4%) sized business. Of the 24% not operating a SME, they were interested or working in government, education, research or an NGO.

3. Exporting services/products? One-third of the buyers, sellers and services are exporting their services/products outside of Alberta. Also, excluding those just starting up, sellers, buyers and services of technology are equally represented with 2 out of 3 doing their business exclusively in Alberta.

D. The Relevance and Importance of Growth

1. Relevance of growth. When asked, how they would characterize the importance of growth to their business, growth was viewed as important to all respondents and very to moderate important to those operating SMEs, more so than for those in public services and others not in an operating enterprise. The importance of growth may increase slightly as SMEs grow in size.

Status of Respondent

Non-operating Companies Operating Companies

Importance of Growth

Interested

Gov't, Educ, NGO

Start-up or Micro

Small Medium Total Avg

Not at all 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%

Not Very 1 5% 1 4% 2 3% 1 2% 0 0% 5 4%

Moderate/Somewhat 12 60% 15 60% 19 32% 17 30% 2 29% 63 45%

Very 7 35% 9 36% 39 65% 39 68% 5 71% 94 51%

TOTALS 20 12% 25 15% 60 36% 57 34% 7 4% 169 100%

We assumed at the start that there are many small businesses with no interest in growth. These

so called "lifestyle" companies are small and satisfied with the status quo. If they do exist and

are prevalent, they - for whatever reason, did not respond to the survey or attend the site

consultations. The survey therefore reflect the views of companies interested in growth.

2. Currently growing. Half of all those operating an SME are growing, the other half are growing slowly or not at all – excluding start-ups where it was too early to tell.

Growing - 50% Slow/No Growth - 50% 17% rapid 15% none or declining

33% moderate 35% slow Note. Industry Canada (2013) reports that 9-10% of Alberta’s SMEs reported or anticipated growth rates of 20% or more.

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3. Interests of growing enterprises. Of the 50% operating fast/moderately growing SMEs, Engineering and Construction along with Entertainment and Forestry are of most interest AND least likely mentioned by slow or no growth SMEs. These are competitive private sector industries.

4. Interests of no/slow growing enterprises. Of the 50% operating no/slow growing SMEs include Government, Education & Research, and Health are og most interest to slow or no growth SMEs AND least likely mentioned by fast and moderately growing SMEs. These are public sector industries.

5. What is/not important for "growth"? Identified as most important for growth of small businesses were marketing, management, manpower and networking – each ranked consistently high. Least important for growth of SMEs were services typically of interest to larger, more established SMEs.

Most important for growth Least important for growth

Very or Moderate Not very or Not at all

Marketing 97% Mergers & Acquisitions 39%

Management 93% Government Regulations 53%

Manpower 91% Professional Services 62%

Networking 91% External Investors 66%

Business Plan 87%

Product Development 86%

E. Impediments to growth

1. Availability impeding growth? Next we turn to whether the availability of specific services are important in impeding growth. The lack of available manpower and marketing are both very important, and external investors would appear to be important impediments to the growth of SMEs.

Availability Impeding Growth

Very or Moderate Not very or Not at all

Manpower 68% Professional Services 49%

Marketing 64% Mergers & Acquisitions 49%

External Investors 58% Metrics 39%

Government Regulations 35%

Note. Industry Canada (2013) reports that the main internal obstacles to growth are employee recruitment and retention (43 percent), the amount of time devoted to current operations (43 percent) and maintaining sufficient cash flow (34 percent).

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2. Both important and impeding growth? When asked what was both most important and impeding growth, management, networking and internal investment in addition to marketing and manpower. The emergence of Internal Investment as an impediment to growth of SMEs may reflect that respondents were early-stage and small, a time when External Investors is less important than Internal Investment – and cash flow. If this is the case, it may also explain why management and networking are impediments as managers are too busy to network.

Most important and impeding growth Least Important and not Impeding growth

Marketing 81% Professional Services 24%

Manpower 80% Mergers & Acquisitions 30%

Management 73% Metrics 35%

Networking 71% Government Regulations 37%

Internal Investment 70%

F. Sources of Help and Setting Priorities

1. Who are helping and who are impeding growth? Medium-sized businesses hire more qualified staff, invest more in research, have more resources to acquire other businesses, and are more likely to engage in global exporting. The effectiveness of the following sources was rated for "helping" grow Alberta's entrepreneurial and small businesses.

Very helpful and Somewhat helpful Not helpful or an Impediment

Industry Associations 46% Banks and Financial Institutions 27%

Incubators & Research Agencies 45% Multi-national Corporations 24%

Angels & VC Networks 39% Government - Municipal Services 22%

Management Consulting 36%

There may be a bias here as the Survey sponsors were a management consulting and an industry association. They and incubators and research agencies, angels and VC networks, are viewed as most helpful. Least helpful are banks and financial institutions, multinational corporations, and municipal government, resources that typically attend to established businesses.

2. Priorities for survival and success. The findings derived from the survey and site consultations have been arranged to reflect the primary issues and associated problems with each concluding with recommendations and proposals. Given the very broad scope of what can go wrong and the vast array of challenges enterprises face over the various stages of growth, we've necessarily had to prioritize the top problems and where necessary to distinguish any that were unique to start-ups and small businesses and/or specific to a particular industry.

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Learning to survive is essential to growth. We start-out here with the obvious because so many

start-ups fail to survive. The reasons are too numerous to mention. But rarely is the "idea" -

that is the "technology", the issue. Commerce is a human enterprise; failure is due to people

being unprepared for the vast array of situations to sustain the enterprise. The probability of

failure decreases as learning from experience increases. Reducing failure means learning and

mitigating risk. So the resolutions are obvious:

Prepare. Learning: academic, personal, acquaintances, networks

Resources. Public and "community"

Focus. A business plan incorporating product and personnel, management processes, and resourcing.

Most sources of small business support at start-up are personal as their experience, reputation

and resources are too new to secure external "community" support. What is reasonable and

accessible outside of family and friends, are public business services and of growing relevance,

small business networks. The relevance of networks has recently been reinforced by research

indicating their significance in recent successes attributed to Networked Incubators. See

Appendix H. The Networked Business Incubator. Credit is also given to the emerging role of

research institutes, incubators and industry associations.

As for Chambers of Commerce, they have historically been very successful in attracting and

stimulating commerce among community retail enterprises. They were not viewed as today

relevant to the new generation of young entrepreneurs and technology based enterprises.

Their networking events are characterized as gatherings of sales agents and already established

enterprises.

Banks and financial institutions openly admit to being irrelevant to small business until they

have security to secure loans. Professional services are too expensive and too busy with little

interest in small business. Municipal governments and their “red-tape” was frequently

mentioned as impediments.

G. Site Consultation Issues - Nine in All

1. Technology. Technology issues are rarely mentioned in terms of cost or access, but because technology equates to knowledge, issues of product management and development and securing talent are important; the latter is addressed under Human Resources.

2. Management. A serious problem in the sense that as an enterprise grows, its management challenges change warranting additional experience and often a change in management style. Many small businesses are overwhelmed by complexity and the sheer volume of decisions needed to survive when starting-up. Sources of advice

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typically require time and/or travel and/or are costly and - given the lack of experience, may even be misunderstood.

3. Governance. For many, "governance" is informal and at best received through a board or a coach. The lack of a board or networks of advisers is frequently mentioned as an impediment to growth.

4. Human Resources. There are two dimensions to the issues identified here: access to talent and the lack of relational skills. The talent issue is well known in Alberta that is experiencing labour shortages in the trades but also the loss of - or under employment, of knowledge workers who find they are not job ready, lacking social skills to work in a social structure. The availability and even the concept of mentors is new though retirees are projected to be plentiful.

5. Funding. The focus is on the inadequacy of internal funding for early stages, when assets are lacking, enthusiasm high but experience and performance lacking. The relevance of External funding appears at a later stage of development, when a stand out problem appears - how, when and whether to exit? Serious concern is raised that venture capitalists undermine growth, promoting early exits with a consequent loss of talent/experience, and an economic loss of a growing enterprise.

6. Evaluation. Little attention is evident to metrics and the setting of priorities. Money is over-valued as the proxy of success regardless of its source - an investor or earnings. Due diligence with a mismatch of expectations after the relationship has been sealed. Small businesses are particularly vulnerable.

7. Regulations. Governments are not viewed as helpful or important, but can be impediments to growth. “Red tape” is noted as an issue among municipal government. And an obsession with timely tax collection by federal government, particularly of GST creates a significant burden on the cash flow of small businesses.

8. Marketing. Little confidence was expressed in understanding the customer, their problems, or markets. Weak integration of market research in product development. Product management and development is also poorly understood. Technical "wow!" drives internal funding priorities.

9. Learning. Failure is under-valued, and not appreciated as a critical element to manage in growth. "Failure" both in terms of identifying "lessons learned" and appreciating where to go for "help".

Given the complexity of issues facing a start-up for survival and of a survivor for success, it may be no surprise that experimentation continues in the search for the right formula for success. There is no shortage of programs, curriculum, coaching and experiences offered to small business with the promise to help. Unfortunately, the proportion of small businesses that continue to fail, and the stagnant status of small businesses failing to grow appear consistent over time with little variation across Provinces. Investors, researchers and government programs do not appear to have found a universal answer. And while incubators and research institutes are recognized as helping, and management consulting too, failure continues to be touted as the best teacher. But failure is costly as entrepreneurs drop out at a cost to innovation. What to do? Note. In discussion with a banking executive, we heard that “failure”

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does serve as a low cost measure for the banks, serving to separate the wheat from the shaft, purging the low and hi-risk candidates at little cost to financial institutions. Recommendations derived from the survey and site consultations now follow as measures for reducing the failure rate and increasing growth of early-stage enterprises.

H. Recommendations - there Are Four.

1. Human Resources. Improve communications and relational skills for knowledge-based

students and graduates, professions and industries.

A common problem underlying most failures and impeding growth of small businesses is the

lack of interest and understanding of the relevance of communications and relational skills. The

origIn of the problem may be attributed to the high value placed on technology/product with

little regard to communications, and the role that people have in commerce. This conclusion

stms from survey results and the consultations that identified impediments to growth as

communications intensive processes: marketing, management, manpower, networking. Time

and again, we observed that technology intensive entrepreneurs and small businesses lacked

management skills in communications.

The issues appear in human resources - recruiting, staff relations, and management

development; marketing - knowing, securing and maintaining customers; product - team work

for product design and development; funding - presentation quality and investor relations. The

low regard for mergers and acquisitions as a growth option may also be related to a lack of

relational skills. Research universities champion knowledge and the professions, with little

regard to the relevance of liberal arts and culture. Yet, entrepreneurs must be proficient in

communications to survive and grow. And professionals are increasingly facing competition and

well-educated, knowledgeable clients cum customers. A senior policy director for Germany

revealed a major initiative to overhaul the training of engineers with the objective of

developing "personality". Similar initiatives to develop relational skills have been undertaken in

many "knowledge-based" professions including medicine. Also related are initiatives to elevate

the relevance of liberal arts in values-based leadership, creativity and innovation, corporate

ethics and governance. Such skills are also essential for any business wanting to export and

compete in markets outside their culture. Discussions with Asian interests wanting to do

business in Alberta, noted the importance of understanding culture and social conventions

when doing business in Asia.

Small business success in exporting warrants considerable awareness of cultural issues and

savvy communications. Again, relational competences are a prerequisite.

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Proposal 1.1. Incubators and educational institutions should develop a curriculum (academic and experiential) of requisite communication skills warranted at various stages of small business development. Visit Appendix I. Human Capital Analytics – The Serial Entrepreneur – Alan Hamernick

Proposal 1.2. Encourage the integration of applied communications into the curriculum of educational institutions particularly the professional schools.

Proposal 1.2. Governments at all levels need to increase the priority given to developing small business incubators linked to research institutes and universities. Visit Appendix H. The Networked Business Incubator – Anne Bøllingtoft and John P. Ulhøi

Proposal 1.4. Management consultants need to appreciate the significant value attributed to the profession by small technology businesses and convey the profession’s interest in the success of small business.

2. Innovation Zones. Collaboration should be encouraged and small business clusters

developed for establishing and evaluating the success of designated innovation zones.

Over again we heard of silos, border issues, redundancy and NGO overlap. Engaging co-hosts

for sponsoring and helping arrange the conduct of workshops was quite easy and well

accepted. Yet, while “collaboration” was discussed as “in favour”, evidence and examples of

collaborative projects were hard to identify in Alberta. Project experimenting with collaboration

were readily identified in the United States, where more experience, largely positive has been

documented.

Proposal 2.1. ABCtech should facilitate establishing a model Innovation Zone compatible

with the Zone's socio-economic vision featuring collaborative economic development and the

integration of science and culture, technology and arts enterprises AND development of the

associated infrastructure, including a network of domestic and foreign investors to support

small business retention and attraction and an associated network of small business

incubators. See Appendix F. Establishing a Model Innovation Zone – NW Innovation Zone

Advisory and Appendix K. Clusters of Entrepreneurship and Innovation.

Once established, small businesses should be more informed about the relevance of mergers

and acquisitions as a growth strategy.

Proposal 2.2. Incubators should conduct workshops on the risks and rewards of mergers and acquisitions for growth and tell stories about the success - and failures, of Alberta enterprises that have adopted mergers and acquisitions for growth. Appendix G. Aggregating SMEs and Growth - The Alberta Way - Milan Prpric

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3. Funding Innovation. Cultivate local and regional networks of early stage investors and

mentors and restore the role of banks in commercial lending.

Banks and financial institutions are being supplanted by creative alternatives such as crowd

sourcing, equity markets and the emergence of direct funding by individuals - "angels" and VC

networks. Over and over again we heard of a mismatch of investor objectives with small

business interests. Respondents recognized the importance of internal investment in their early

stages, and the relevance of external sources of funding once established. External funding

often came with expectations of unrealistically short timelines and multiple ROIs. Alberta is not

Silicon Valley. The lessons to be learned for Alberta are about what the Valley did in its

formative years for small business, not what it is doing now. Given that many retirees have

interest, experience and resources of value for small business, attention should be given to

cultivating angels and angel networks for allocating local funds in local enterprise. Also,

developing mentors as advisers and ultimately as directors, would make a significant

contribution to the survival, retention and growth of small business.

Proposal 3.1. Establish evaluative measures for incubators for encouraging their networking

and partnering with others engaged in identifying foreign and domestic investors and

mentors/directors for local enterprises.

Banks have played an important role in financing commerce. Their success was predicated on

securing loans with tangible assets. As the knowledge economy emerged - GDP has become

heavily weighted by intangible services and processes. Banks have transitioned into supplying

an array of services. A commercial funding gap is evident for commercializing early stage

business and emerging technologies. Work needs to be done to formalize the treatment of

intangibles so prevalent in the knowledge economy.

Proposal 3.2. Establish a task force of government policy makers, tax authorities, accounting

professionals and corporate leaders to translate society's asset management protocols from

the declining industrial era assets to the creative assets of our knowledge-based economy.

See Appendix E. How Banks Can Help Canada’s SMEs – Robert McGarvey

4. Policies & Practices. Revise procurement and regulatory, advisory and funding practices to

support the development and retention of Alberta innovation and innovators and the

attraction of foreign partners.

The recommendation is intended to stir governments at all levels - and where relevant,

corporations, to review their practices to ensure they are aligned with policies to promote

competition, innovation and small AND medium sized business formation. Policy makers may

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find illuminating the seminal research cited in Appendix K. Clusters of Entrepreneurship and

Innovation.

Procurement practices favour established, large - often foreign, corporations. Large

commodity- based corporations do little research, and small businesses are early adopters of

new ideas, and as they grow they invest more in research. Multinational corporations and

professional services are not viewed as sympathetic to small business interests. Yet they have

advice and technologies of considerable value to small business success. Both should be

encouraged find ways to engage small businesses in knowledge exchange possibly through

research institutes, industry associations and incubators that are valued contributors to small

business survival and growth.

Proposal 4.1. Government and industry should review their procurement practices to

support small business bidding, innovative problem solving and the aggregation of bidders.

See Appendix G. Aggregating SMEs and Growth – The Alberta Way – Milan Prpric and Appendix

A. The "Growing" Challenge - from Starting-up to Growing-up – Esir Prente

Proposal 4.2. Review public funding and investment practices to ensure the return on

investment remains with Alberta.

Proposal 4.3. NGOs should establish an advisory to provide recommendations on measures

for increasing the role of NGOs in effectively serving small business survival and success. See

Appendix J. What Role for NGOs in Growing SMEs? - Michael Flood

NGOs represent a special case, but have the potential to play a significant role in economic

diversification and commercialization. Thousands of Alberta's NGOs rely on government

funding and facilities without accountability - often with no constituency or achievements to

show. This may be an opportunity to begin a consolidation of the Alberta's NGOs where they

are given incentives to support the commercialization of technologies relevant to their

constituencies.

* * *

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APPENDIX

A. The "Growing" Challenge - from Starting-up to Growing-up – Esir Prente

Technologies as change agents. Emerging technologies can disrupt entire industries. Economies that are not diversified are most vulnerable. But introducing even established technologies - for increasing productivity, are of little interest when prosperity is at hand. It's only in the face of pain, that insight and capital and know how combine to act. Rarely to companies change because its a good idea. However, the impact of an emerging technology CAN BE devastating increasing the monitoring of what's coming OR to be the founder, owner or early adopter of a disruptive technology. For emerging industry-changing technologies the cost of commercialization usually warrants lots of time and significant capital calling for government intervention. This is very tricky, as governments have so many priorities and the electorate can be fickle. SMEs the foundation for diversification. The partnership of the Alberta government with multinational corporations prepared to finance agriculture, forestry and energy and the requisite transportation systems is worthy of international envy. But even the most cynical admit that carbon commodities are cyclical, and that reliance of Alberta on North America alone carries political risks. And so, Alberta needs to diversify, and the dearth of Alberta-made medium businesses impeding the development of value-added, exports. Those that have succeeded are largely in construction and energy and have employed strategies of acquisition. The SME Ecosystem. The plight of start-ups has rarely gotten the amount of attention as it is today. Rarely does a day go by without a proclamation from on high envying economies with medium sized enterprises, businesses that can compete, have talent and capital, engage in research with a global reach. These are not small businesses. Small businesses feature innovation and risk-taking at low cost. Q. What to do? Ans. Grow'em. Eat'em. Merg’em! Unfortunately few economies have such robust ecosystems or capital lying around - except Canada and more-so Alberta. BUT the capital is in the bank, and banks - particularly Canadian banks and citizens are among the world's most risk averse ... a feature appreciated during the global mortgage meltdown, but an impediment to recovery. So don't count on the banks. What about Made-in-Alberta angels and VCs? Most savvy investors strive to find low cost, high performing, innovators like Adam. They like'em a lot but not for their growth potential; they like their hunger and love to re-plant them. They know: 1) that most won't survive, 2) that few have any interest in growing and 3) that their management experience in growth is rare. To grow is not to operate, it requires a dramatically different form of management - much more assertive, acquiring, with obsessive aspirations. Hence, the interest of VCs in seizing and exporting early stage innovators to sunny California. Three thrusts for leadership. Grow - a nurturing ecosystem, adding brokers and incentives for financing, Transform - the communications and educational systems for rapid knowledge transfer embracing emerging technologies. Compete – be brave, encourage a more global and competitive culture. And be patient, appreciating that if prosperity reigns, most small businesses will stay the course and change ONLY when necessary. My bet, is to mobilize forces to acquire the best and bulk up. Encourage regional mergers, target acquisitions and tax benefits for the first year of an acquisition. And establish government procurement

19

policies and vendor management processes that benefit small enterprises to joint-bid and work together. Encourage corporations to do more spin-offs. And think growth early! Inspire a new more assertive culture.

B. Sizzle or Substance - The Role of Small Business in Diversifying Alberta's

Economy - Richard Truscott

Visit www.abctech.ca/management-and-strategy

C. SME Feb/Mar Survey of ABCtech's Subscribers

You - know Alberta's small business environment and are a buyer, seller, researcher or policy

influencer of technology products and/or services. We - are concerned that only 2 of 10 start-ups

survive 5 years and that only 1 or 2 small businesses (1-5 employees) ever grow to medium (>99

employees). We are eager to learn your opinion about whether:

1) "Growth" is or should be a small business objective? The focus of this survey.

2) What should be done to increase the survival and growth of small technology businesses? The

focus of our site consultations planned for April through September.

The survey responses will be confidential with the results used to design the site consultations

across Alberta. The consultations will contribute to a public Report and recommendations for

Alberta business and governments and for guiding the development of our programs for

developing emerging industries.

Thank you,

Alberta Council of Technologies

www.ABCtech.ca Contact - 1(866)241-7535 or local (780)990-5874

1. What is your preferred Region for the conduct of a small business consultation?

Northwest - Grand Prairie

Northeast - Fort McMurray

North Rural

Edmonton Region

Red Deer

Central Rural

Calgary Region

South Rural

Medicine Hat

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Lethbridge

Other (please specify)

2. What Alberta industries are you most familiar? Select up to 3 from the following list:

Agriculture & Food Processing

Communications & Marketing

Construction & Real Estate

Education & Research

Energy & Distribution

Engineering & Design

Entertainment & Hospitality

Environment & CleanTech

Finance & Accounting

Forestry & Wood Products

Government & Public Policy

Health & BioTech

Human Resources & Development

Infotech & Analytics

Legal & Security

Management & Strategy

Manufacturing & Export

NGO - Non Government Organization

Transportation & Logistics

Other (please specify)

*3. Do you operate a 'micro' (1-5 employees) or small (6-99 employees) or medium (100+)

business?

No - But I'm interested. Proceed to Question #6

No - I work in policy/government or research/education or an NGO. Proceed to Question #6.

Yes - a start-up or micro-business. Proceed to Question #4.

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Yes - a small business, Proceed to Question #4.

Yes - a medium business. Proceed to Question #4

Other (please specify)

4. Which of the following apply to your business? (Check all that apply)

Alberta only - SUPPLYING technology products and/or services

Exporter - SUPPLYING technology products and/or services

Alberta only - BUYING technology products and/or services

Importer - BUYING technology products and/or services

Neither an Importer or Exporter - just starting up

5. How would you characterize your business's growth?

How would you characterize your business's growth? None or declining growth

Slow growth

Moderate growth

Rapid growth

Uncertain - if uncertain, please comment

Please comment

*6. Is "growth" an important small business objective?

Is "growth" an important small business objective? Growth is - very important

Growth is - somewhat important

Growth is - of moderate importance

Growth is - not very important

Growth is - not important at all

If "not" - please explain why not?

*7. Rank the following from the most (1) to the east (12) essential for small business growth:

Networking - linking to others essential for success

Mergers and acquisitions - for adding strength

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Manpower - for staffing operations

Mentoring - knowledge transfer through friends and advisors

Professional services - legal, HR, IT, accounting support

Investors - external sources of funding for growth

Marketing and sales - securing and maintaining revenue

Business plan - for setting future direction

Product development - research and innovation

Management - setting priorities and organizing operations

Investment - internal financing of growth

Metrics - for monitoring growth and performance

8. We are arranging 1.5-hour site consultations for up to 25 attendees ($25@) in each Region,

including: an orientation, a workbook, round-table discussions and recommendations. Which

times would be most appealing to you:

Morning 7:30-9:00AM with refreshments

Afternoon 4:30 - 6:00PM with refreshments

Evening 7:30-9:00PM with refreshments

Not interested

It depends. Please comment.

Please comment

9. Medium-sized businesses hire more qualified staff, invest more in research and have the

internal sources to acquire other businesses as a growth strategy. What should be done in Alberta

to increase the number of medium sized businesses and the capacity of small businesses to grow?

If you would prefer to add more, simply email info@ABCtech.ca with the word SURVEY in the

subject line

10. The Alberta Council of Technologies has developed ABCtech Media Productions with the

capacity to broadcast radio and TV stories about Alberta entrepreneurs, researchers, and

technology innovators. Would you be interested in being interviewed or have someone who you

would recommend? If so, please enter the name of a contact and their email address.

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D. SME Site Consultation Workbook including Survey Results

The Missing ‘M’ in SME - Why small businesses in Alberta fail to grow

Only 1-2 small businesses survive 5 years. Only 1-2 ever grow to medium.

SME Site Consultation Workbook

April - September. 2014 Alberta, Canada

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INTRODUCTION The Alberta Council of Technologies Society and the Certified Management Consultants of Alberta are interested in why Alberta's small businesses buying, supplying and servicing technology fail to grow. Toward this end we surveyed ABCtech's 15,000 subscribers, soliciting input from SMEs: start-ups and entrepreneurs, "micro" (1-5 employees), small (6-99 employees), and medium businesses. The Survey results are contained in this Workbook. The Workbook is for guiding site consultations arranged by local co-hosts across Alberta. The consultations will contribute to the assembly of a Report with recommendations for removing important impediments to growth of Alberta's small technology business. Your input is very much appreciated.

Thank you,

Table of Contents Page Introduction & Table of Contents 2 SME Survey Results - Highlights 3-9 Alberta Council of Technologies – How to help 10

Q. #1. What can a small business do for itself to increase growth? 11

Notes and Recommendations Q #2. What changes do you recommend for increasing small business growth? 11

Notes and Recommendations A. For Buyers B. For Sellers C. For Governments Other – Comments?

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SME Survey Results - Highlights

ABCtech initiated an email campaign in February to March, 2014 with several reminders to its subscribers. The campaign contained the rationale and url site for completion of a 10-question survey about Alberta's SMEs. The Survey template is reproduced on pages 9-11.

First, who responded? 1. What Alberta industries are you most familiar? Select up to 3 from the

following list:

Most industries are represented - Respondents are familiar with most sectors of the Alberta economy

The top 3 identified N = 169 Management & Strategy 30%

InfoTech & Analytics 28% Energy & Distribution 25%

Engineering & Design 25% Education & Research 20%

Finance, HR and Legal 17% Government & Policy 17%

Communications & Marketing 17% Manufacturing & Export 16% Environment & CleanTech 16% Agriculture & Food processing 15% Construction & Real Estate 14% NGOs – Non-government organizations 14% Health & BioTech 12% Entertainment & Hospitality 6% Forestry & Wood Products 5% Transportation & Logistics 4%

2. Are you an entrepreneur or operating a micro (1-5 employees) or small (6-99) or medium (100+) business? SMEs are well represented

73% of respondents were either starting up or operating a micro (36%), small (34%) or medium (4%) sized business. Of the 24% not operating a SME, they were interested or working in government, education, research or an NGO.

Select comments

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I'm a business consultant Now Retired Proprietorship We are certified management consultants

(CMC) professional service providers to SME's Active serial entrepreneur and investor/coach/mentor

3. Which of the following apply to your business?

1/3rd of Buyers, Sellers and Services Export Excluding those just starting up, sellers, buyers and services of technology are equally represented. Alberta is their market 2:1 over outside Alberta.

Select comments:

I would also check a box for "Developing technology" I buy technology from wherever it is most readily

available Note - I'm based in Ontario! Starting up a business related to sustainable agriculture and

manufacturing. Technology based services offered to businesses (not the same as selling products) Smart Grid

Solutions integration Also contemplating acquiring micro and small businesses soon. We are weekly

newspaper so have a broader message. International. Investor is technology business. ERP software.

Promote the food industry. Selling a technology consulting service locally, in Canada and globally. I

don't understand this question. Anywhere. Hope to sell our technology. May end up just marketing our

patent. Evaluation of required levels of technology to sme businesses. 5% of our revenue is in Canada -

1% in Alberta. Buyer of tech - servers and cloud technologies. Technology / Business Solutions & System

for Businesses of any size. We provide technology/business process services to other SMEs.

Next, about Growth

4. How would you characterize your business's growth?

Growth is important to almost all SMEs

Status of Respondent x Importance of Growth

Status of Respondent

Non-operating Companies Operating Companies

Importance of Growth Interested

Gov't, Educ, NGO

Start-up or Micro Small Medium Total Avg

Not at all 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%

Not Very 1 5% 1 4% 2 3% 1 2% 0 0% 5 4%

Moderate/Somewhat 12 60% 15 60% 19 32% 17 30% 2 29% 63 45%

Very 7 35% 9 36% 39 65% 39 68% 5 71% 94 51%

TOTALS 20 12% 25 15% 60 36% 57 34% 7 4% 169 100%

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Observations: Growth is important to all respondents, particularly operating companies.

Respondents who are not operating an SME under-estimate the importance SMEs attribute to growth.

Most operating companies view growth as "very important"

The importance of growth may increase slightly as companies grow.

Select comments

I work for an Industry organization Growth in profitability and cashflow currently outweighs growth in

revenue, but clearly, they are inter-related. Need to define the meaning of growth to best ask this question.

Note: There are several types of small businesses 1) One with an entrepreneurial driver seeking growth 2) A second, where the founder manages the firm for his/her employment and is satisfied staying small 3) A third that is

a hobby business, driven by personal interest more than anything Growth needs to be funded. Growth is

directly related to the maturation of technology and products. The growth can grow exponentially overnight. I think most small businesses are happy to remain that way. They carve out their niche and get referrals by mouth. Expansion might be thought to incorporate more headaches than gain. Could be a myth buster needed to get small business interested in medium to big business. Big also assumes takeover, ruthlessness, that might not be everyone's preference. I wouldn't like it if someone wiped me out, so why I should I like myself for wiping out

competitors? Profitability more important. I'm retired and do not need the income so I do it for

enjoyment, as an accomplishment and for special purchases like new cars, homes, etc. Making a profit is more

important. My goal is to stay self-employed. The objectives of any sme have to align with the expectations/objectives of the start up owner. Most entrepreneurs don't have the mentors involved ( not aware, too much ego ) when they begin. Growth may or may not be important. Hours/place of work; life style eg home

schooling; and other personal priorities fit into the picture. Growth is related to capacity and capability and these must be developed before sales growth can be realized. Cash flow is more important for small business.

Half of the small businesses are growing

The proportion of small businesses growing, almost equates to the proportion growing slowly or not at all – excluding 26% of start-ups where it was too early to tell.

Growing - 50% Slow/No Growth - 50% 17% rapid 15% none or declining 33% moderate 35% slow

The proportion of small businesses growing, almost equates to the proportion growing slowly or not at all – excluding 26% of start-ups where it was too early to tell.

Engineering and Construction along with Entertainment and Forestry are most familiar

for fast and moderately growing companies AND least likely for slow or no growth companies.

Government, Education & Research, and Health were most familiar to slow or no growth companies AND least likely to be mentioned for fast and moderately growing companies.

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Select comments

Clients think I'm getting old I have heard from some that the business has a lot of potential. Will be "green

economy". Accounting practice was sold two years ago. It was growing at the time. 10-15% top-line

organice revenue growth, so I assume this is moderate? No support from Power Industry in Alberta. Alberta iz

10 years behind the world's leading countries. No desire for growth Potential is huge - just 'waiting for the

dam to break'. First one to three years very slow, years four to eight were rapid growth, years nine to fourteen

slow. Very active in evaluating investment opportunities. Hard to overcome the dominance of oil and gas

with little interest for other industry in Alberta. My first company became an NPE following the irrational logic

of a self-proclaimed VC messiah. That company hasn't had an AGM since 2008. Their CEO's campaign to discredit

me affects my ability to raise funding for my new venture, so I have to fly below the radar until my previous

shareholders wake up to what is going on. Very slow. Lack of full support or difficult to get provincial and

federal programs. Haven't been able to break into the M level. Starting up just going live.

5. Is "growth" an important small business objective? Most important for growth Least important for growth

Very or Moderate Not very or Not at all Marketing 97% Mergers & Acquisitions 39% Management 93% Government Regulations 53% Manpower 91% Professional Services 62% Networking 91% External Investors 66% Business Plan 87% Product Development 86%

Select comments

Finding right opportunity Businesses that fail, from my perspective are far too indebted without enough clients

to support their operations. Creating lean start-ups might contribute more to the success of start-ups but I might be

making a presumption. Implied in a few categories, but not explicitly mentioned, is the importance of solid

financial knowledge and cash flow management. Knowledge transfer from the world's leading experts to Alberta. It service what matters not the Product. SG Integration is service not the Product. Government's Programs

don't support service Development. Client acquisition. Financial Planning. Access to customers and

domain knowledge for technology companies is paramount. Employer-employee partnership and fluidity of

communication Alignment with personal objectives/expectations Raising money for non-oil startups is

next to impossible in AB. Strategic planning and execution of plan. Quality products to sell. Access

to capital and affordable technologies and HR solutions. Code of Ethics - boundaries need to be established

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early or partnerships will fail due to perceived breaches of ill-defined social norms. Internal corporate culture , corporate vision, and how these are realised inside the firm. company growth strategy M&A ? bootstrapping? other?

6. How would you rate the following in importance for the growth of small businesses? Availability impeding growth

Very or Moderate Not very or Not at all Manpower 68% Professional Services 49% Marketing 64% Mergers & Acquisitions 49% External Investors 58% Metrics 39%

Government Regulations 35% Select comments

Leadership I am understanding the question as "Is the existence of any of the following impeding ..." but I also

wonder if you meant to say "Is the lack of any of the following impending ..." If no one is buying what companies are selling, they'll be out of business. I think the product development aspect is large and securing clients who want products is key. Larger than all of those aspects, the price of space to work out of bleeds businesses DRY. Space is way too expensive so having incubators where the rent / leasing fees are 10-25% of the present rate would be a huge help to small businesses looking to expand.

Alberta is closed for Smart Grid Technology cooperation with the world's. This question is very unclear!!!

Do you mean 'Availability" or "lack of availability"? It's generally not lack of availability, it is barriers to access,

including time, money and staff, and lack of knowledge about what's available and what difference that will make.

I am not sure which of any of these factors impede growth. Micro-funding at times to deliver on large

contracts. I don't understand this question. This question does not make sense to me. Don't

understand the question. Sustained early stage capital to fund bench & pilot almost non-existent. Too

much of planning at initial stage. Government focus on oil & gas sector at the expense of a more diversified

industrial economy in Alberta. Customer and low price demand. Mindset - Albertans have an insecurity

complex towards innovation and thought leadership. Their reluctance to embrace change or 'get on board' with

new innovations they deem to be 'careful' or 'cautious'. It's the fear of taking risks that most impedes growth for

small businesses. Both from the business leader and the client/customer being too cautious. Training for

innovators and leaders is what is most needed to overcome the mental barrier for leaders. But how do you train

the customer? Marketing only goes so far. External investment is more important than capital. It helps to

validate a business and to move from a profitable 'lifestyle' business to medium sized corporation. We do not a

good job of this, esp compared to the energy industry. Please see other answers to question 6. It seems to me

that many firms are founded by people who are ecstatic to be making a living from their idea, but are lacking the

drive, ambition or vision to take their firm to the next level. It is difficult for founders to step aside and allow others

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to take over their company even if it is in the interests of investors who may number individuals /institutions other

than the founders. Professional services - too expensive then companies try to do it on their own or cheaply,

small business doesn't understanding the difference between marketing and advertising, managers don't delegate

to labour and often try to do both, regulations too complex or daunting for small business, small managers don't

get the time to network outside the local area.

Setting Priorities 7. Is the AVAILABILITY of any of the following IMPEDING the growth of small business? Established as the most/least IMPORTANT and most/least available IMPEDING growth

Most Important Impeding growth Least Important Impeding growth

Marketing 81% Professional Services 24%

Manpower 80% Mergers & Acquisitions 30%

Management 73% Metrics 35%

Networking 71% Government Regulations 37%

Internal Investment 70%

8. Medium-sized businesses hire more qualified staff, invest more in research, have more resources to acquire other businesses, and are more likely to engage in global exporting. Please rate the effectiveness of the following sources for "helping" grow Alberta's entrepreneurial and small businesses. Effective in helping grow small businesses Very helpful and Somewhat helpful Not helpful or an Impediment

Industry Associations 46% Banks and Financial Institutions 27% Incubators & Research Agencies 45% Multi-national Corporations 24% Angels & VC Networks 39% Government - Municipal Services 22% Management Consulting 36%

Select comments

My comments are based on my needs verses my perception of industry wide needs. Regarding the Multi

National Corporations is important to make regulations against monopoly positioning. Challenge is to find

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partners to merge with or acquire. Many of young engs and managers are keen to participate in Smart Grid. There is interest among potential Customer to use Smart Grid SOLUTIONS , there is interest among Technology providers but nobody wants to help to Integrate those SOLUTIONS. We Need Demonstration sites (test beds) u put

together existing Products into smart Grid Solution. Not judging each in general, simply indicating which ones have been a help to us (possibly haven't been because we haven't pursued some of them, not necessarily because they wouldn't be willing or able). For Municipal Services: they have been slow to adapt any bus routes for our staff,

despite the clear need along 50th street to have some bus route. Most sources for helping entrepreneurs with their business decisions/mentoring/management are very expensive. CETAC-West in Calgary is a great organization which has a much better survival rate for their clients than national averages. They need support from gov't and industry to keep operating - and to be able to provide services as a low cost to clients -and deferred payment

options. www.cetacwest.com NRC/IRAP and the IRAP Industrial Technology Advisors are most helpful to

SME's. Few of these things help grow small businesses because small business is not the target audience.

No investors; banks are useless. No experience with these agencies, no comment. An 'uncertain'

should be included here, as the outline seems a bit leading. I don't know enough to know the answer to this.

The question is focused on 'entrepreneurial and small' businesses. Entrepreneurial businesses may be very

large. The answers are therefore difficult to provide. If others don't believe in what you're doing, or don't believe that it can be economically successful, it's not

surprising that they're also not helpful. The truth is entrepreneurs in Lethbridge are on our own in every way!

I am not sure where this comment fits in, however, if there are no lenders or programs to give an opportunity for small technology businesses to purchase real estate for control over their unique facility needs and to actually get ahead by someday owning the facility we will always be at the mercy of uneducated/uninterested landlords

impeding our chance of growing to a medium sized business. Depends upon the specific development issues

The province pays lip-service to helping SMEs with financing and grants, but the grant cycle doesn't align with

business cycles and it is very hard to fit in the narrow scope. Being in InfoTech, our product does not carry much weight with non-venture entities such as banks. On the flip side, most businesses do not have the home run

upside that VCs and even Angels want to see. Many good business that could grow to medium size will not. In most cases, government assistance simply requires more effort into documentation than is paid back in benefit. The documentation either requires the most senior people at the company or a highly paid consultant or expert to

fill out. The above list are all enablers. their services add value yes but the value is often determined by the quality of the organisation in question. If they are good they can bring great value to the table if not they can be a factor impeding growth of the company(ies). companies perform in spite of external conditions if they are strategic and innovative.

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HOW TO HELP ABCtech

PEOPLE … you are the source of ABCtech's influence and innovation, sharing

our vision of diversifying Alberta’s economy through the commercialization of emerging technologies. Member Benefits include voting and learning, networking and event discounts. Register - $100 ($25 Students and Seniors) per year at www.ABCtech.ca

PROJECTS … corporations help us advance industry and market

development influencing public policy formulation and addressing impediments for advancing the commercialization of emerging technologies. Opportunities for corporations to co-host and sponsor our Events, AGM/BBQ, Networks, Position Papers, Consultation Studies, Newsletter - QuikTech Notes, and ABCtech Media Productions. Ideas to collaborate and initiatives welcome! 2014 – We are seeking co-hosts for the conduct of local dialogues on “The Missing ‘M’ in SME” - Why do Alberta’s small technology businesses fail to grow?" including a discussion on the role of NGOs, contributing to a year-end position paper. For more contact – pkinkaide@ABCtech.ca

PATRONS … are the foundation for sustaining ABCtech and setting our

strategic direction. Corporations, foundations and hi-wealth individuals with a vision of Alberta’s future may consider … Contributing funding and/or secondments and serving on ABCtech’s President’s Advisory proposing our annual themes. For more contact – pkinkaide@ABCtech.ca

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EXERCISES Q. #1. What can a small business do for itself to increase growth? ---------------------------------------------------------------------------------------------------------------------------- Recommendations Q #2. What changes do you recommend for increasing the growth of SMEs? ------------------------------------------------------------------------------------------------------------------------------- Recommendations A. For Buyers B. For Sellers C. Governments Other - Comments?

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E. How Banks Can help Canada’s SMEs - Robert McGarvey

A recent ABCtech survey of Alberta-based SMEs (Small to Medium sized Enterprises) laid bare the hard facts about running a technology-related business in Canada.

On the upside the ingredients for growth for SMEs were easily identified; they include better access to management, planning, marketing, manpower and product development. What was surprising, perhaps, was the realization that Canada’s banks and other financial institutions were seen to be major impediments to the growth and development of SMEs.

Considering these respected institutions came into existence (in part) to provide finance to Canadian businesses it begs the question; what’s wrong?

Well, to begin with, few of us in the general public realize how radically banking has changed in the past few decades.

Commercial banking used to be rather simple; they’d hold depositors’ savings and then recirculate those saving (on a fractional reserve basis) as interest bearing loans. Banks would lend mortgage money to home owners, supply local businesses with a variety of debt financing options and grease the wheels of commerce by making personal loans for variety of purposes.

Bankers provided a ready supply of relatively cheap capital for the industrial economy. This was possible because the loan principal (the capital invested) was secured against a tangible (collateral grade) asset. It was normally a property asset or the plant and equipment in a business. With the loan principal secured, the only risk the bank carried was payment of the interest – which was why your bank manager looked you in the eye so carefully in those days.

Almost all this has changed in the past 40 years, and the reason is obvious.

Post-industrial societies are rapidly changing their engines of growth. According to the Brookings Institution in Washington DC, today (bankable) industrial type assets only contribute 25% of GDP, (un-bankable) market services and intangible assets have exploded in importance and now contribute over three-quarters of GDP. It’s possible to see the consequences of this paradigm shift in the proportion of tangible assets to total market capitalization in Fortune 500 companies.

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How have banks reacted to this change in the economy?

Not surprisingly, commercial and Industrial lending by banks has fallen with the decline of tangible assets from a high 60% of bank assets in the ‘60s to a low of 18% today.

Banks are no longer pure lending institutions. They’ve become broadly based service industries; profits are driven by banking services, electronic funds transfer fees, and fees associated with asset-based loan securitization. Furthermore, since the elimination of restrictions on banking activities in the later part of the 20th century, there has been a wholesale movement of banks into the highly competitive (volatile) arenas of ‘financial services’. Indeed today many of the most famous names in banking are selling insurance, brokerage and investment counseling services, underwriting equity activities, while engaging in foreign exchange and credit card transactions.

So, what can banks do to help Canada’s SMEs?

We live in a changing world. SMEs today are building knowledge-based business by developing innovative software, patented technologies, network applications and, of (increasing importance), value-based communities of practice.

The hard reality for banks is, these modern intangibles are ‘invisible’ to them, and as such they no longer have security for lending purposes: no surprise they tend to avoid the technology sector like the black plague. This new asset reality has created a financing ‘gap’ for knowledge-rich companies that is one of the principle reasons for their failure or the movement of the opportunity to jurisdictions where alternative financing is more readily available.

This problem is fixable, there are real assets being generated and the harder forms of intangibles are potentially collateral grade. However before we can begin to solve this problem we much recognize that it’s MUCH bigger issue that it appears.

The intangible asset problem begins with management; almost all SME’s today have ‘empty’ balance sheets i.e. they have none of their important assets identified and capitalized on their (formal) financial statements.

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Why is this the case? Well very few corporate leaders recognize their true sources of value. Even fewer have the confidence to capitalize their intangible assets (according to GAAP) on their balance sheets, which are universally prepared for tax purposes (and therefore expense all associated costs).

How can banks help SMEs today? Banks have both the interest and expertise to start formalizing the treatment of intangibles so (some of them) can be collateralized for banking purposes.

Banks could take the lead; bring together important players including government policy makers, tax authorities, accounting professionals and corporate leadership to translate society’s long standing asset management protocols from the declining industrial era assets to the creative assets of our modern economy.

Given the prize that awaits; a new banking business model with the potential to extend loan and other services to existing customers and gain new banking customers, the banking industry would gain significant new profit opportunities. In addition it would make life easier for angel investors (who also need asset security) and in the process unleash the economic potential of the most knowledgeable, innovative and globally connected generation in history.

F. Establishing a Model Innovation Zone - NW Innovation Zone Advisory

Visit www.abctech.ca/innovation-creativity

G. Aggregating SMEs and Growth - The Alberta Way - Milan Prpric

For many of us, our business is our child. We feed it, nurture it, guide it and watch it grow…I think. But…talking about growth has become cliché. Why? Well…in at least 80% of discussions I have with colleagues and clients growth is a repeated theme. It’s inevitable but also exhausting. Growth is an indispensable part of the business life cycle. It is also strategy and philosophy. We keep hearing and humoring ourselves with platitudes from various wells regarding what to do about growth and market expansion. How well has it worked so far? Especially in Alberta?

I can’t shake the feeling that Alberta may have “too many chefs in the kitchen”. Living in a modern individualistic society, we are certainly bred to believe that we should only look out for ‘number one’. As such, we become very guarded about our product and/or service and the market share we currently have. We risk losing control. Sharing in a collaborative sense is a concept that we find difficult to reconcile with the idea of being competitive. After all, isn’t exclusivity of product or knowledge something we cherish and consider an advantage?

A limitation to this thinking is that each creates their own world and becomes their own chef. In short order, there are too many chefs within a given market space. The spirit of collaboration is a far off notion. As chef, one finds themselves responsible for every aspect of their business. As such, it becomes apparent that one’s capacity to grow and to handle growth would be restricted. At this point, one looks at employing more people or out-sourcing functions. Both are good options, but there is a third…aggregation.

Without a doubt, this is a widely used strategy by many best-in-class performing companies. I can certainly think of a number of businesses that have capitalized on horizontal or vertical integration strategies. Why go through intense capital outlays in order to build an infrastructure and develop additional competencies from the ground up when there may be opportunities to join with other businesses that have invested and specialized in the needed competencies? Being mindful and

37

innovative at spotting synergies, capitalizing on them and following up with actionable strategies are skills in themselves and can prove to be lucrative.

As an example, several years ago, I wrote a thesis on the Dynamics of Clustering and Strategic Alliances in the Okanagan Wine Industry. Several important lessons came out of this exercise. First, most wineries are usually small and can be classified as boutique operations. Second, market space for boutique wineries is typically local only, therefore limiting any growth potential. Third, in order to enter a national or international market space, it was absolutely essential to create alliances within the cluster of businesses, and approach the world as a regionally branded product.

This meant that collaboration and sharing of talent, technology and knowledge was necessary. In some cases, businesses transitioned ownership. In other cases, strong alliances evolved. Nevertheless, spillover between businesses was taking place. It was natural and proved to render the regional collaboration strategy a success. Any companies resistant to collaborating and preferring to remain in silos found themselves to be at a disadvantage in terms of capitalizing on changing technology and talent.

Aggregating businesses or at least business competencies with an end game of growing market space for all is a virtual certainty in my mind for many regions and/or industries. The question is, do others believe it to be so or do they believe one can go at it alone? If it still seems difficult to digest this mindset, one may surmise a deeper barrier provoking resistance. Is it fear? Is it fear of uncertainty? Is it trust? This is where real risk lies, but we need not continuously worry. We simply have to break through and accept that collaboration is the key means by which to move forward.

Recently, I had the opportunity to listen to Guy Kawasaki. One of his business mantras is to “let a hundred flowers bloom”. The spirit of his dialogue was to inspire entrepreneurs to not get in the way should their ideas take foothold in unanticipated directions. This is very applicable in this context. Albertans have many exemplary qualities, but if aggregation opportunities arise, will we get in the way or let it flourish? Will we join with enthusiasm and engage in action or keep discussing and searching for growth on individual terms?

H. The Networked Business Incubator - Anne Bøllingtoft and John P. Ulhøi Visit www.abctech.ca/innovation-creativity

I. Human Capital Analytics - Defining and Quantifying the Characteristics of

Serial Entrepreneurs – Allan Hamernick

A serial entrepreneur is defined as a person who has successfully started more than one business who

employs others. Small and startup businesses have long been the key drivers of job creation. Research

conducted by Ron Bonnstetter, Ph.D., Professor Emeritus, University of Nebraska, Lincoln, Ron

Bonnstetter, MA, Chairman of Target Training International, (TTI) and DeAnne Preston identified and

quantified the characteristics of serial entrepreneurs. Using the TriMetrix®DNA Assessment, data was

collected on 55 different variables in three specific areas relevant to performance: motivators, behaviors

and professional soft skills. Motivators tell us why entrepreneurs are motivated to do what they do,

behavior describes how they do it, and professional skills reveal what they do well.

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The serial entrepreneur profile provides quantitative data that can be used to identify individuals who

have the characteristics to succeed in the creation and growth of business ventures. Angel investors,

venture capitalists, and other funders can increase their level of due diligence by using the profile as a

benchmark to compare the attributes of a funding applicant to that of a successful entrepreneur’s

profile prior to investing. Educational institutions can use the profile data to establish more effective

entrepreneurial development programs to help those with great ideas turn those ideas into viable

businesses.

A Columbia University doctoral study conducted in 2013, used the TriMetrix®DNA Assessment to see if

the characteristics of entrepreneurs varied from one generation to the next. The study revealed there

were no significant differences between entrepreneurs of different generations and also validated the

earlier entrepreneurial profile developed by TTI.

The entrepreneurial profile reveals high levels of motivation derived from the utilitarian and

individualistic motivators, high influence and dominance behavioral styles along with a grouping of top

competencies including leadership, goal orientation, employee development, interpersonal skills,

presenting, persuasion and written communication.

Programs aimed at developing entrepreneurs typically focus on technical entrepreneurial skills like business plans or financing, and the development of an entrepreneurial mindset. As with most development programs, little time if any, is devoted to the study or analysis and measurement of the personal qualities and characteristics required to be a success. Consequently, the inclusion of the development of these qualities and characteristics is lacking in many entrepreneurial development programs.

J. What Role for NGOs in Growing SMEs? - Michael Flood

According to the Service Alberta, there are over 24,800 registered non-profits in Alberta, or one for every 165 Albertans. Known as Non-Government Organizations or NGOs, there are no hard and fast definitions of what constitutes one but the most encompassing way to think about them is groups of citizens who come together for a purpose (other than money making) outside of the direct supervision of government.

Alberta NGOs fill a vast range of functions: some supply legal aid to the poor, others teach English language reading and writing to new immigrants and the illiterate. Still others advocate to protect wetlands, raise money for hospice care and fund research into rare diseases like lupus or Huntingdon’s. One important class in Alberta, the industry associations, provide knowledge sharing, spread best practices, and supply opportunities for networking, connecting new graduates with jobs.

What role could these NGOs play in supporting the growth of small and medium size enterprises in Alberta? Judging by the results of the survey documented in this report, a substantial one. A significant percentage of entrepreneurs questioned by the Alberta Council of Technology Society and the Institute of Certified Management Consultants identified industry associations as vitally important to their survival and growth. They were ranked above banks, investors, and municipal governments in terms of their utility to small businesses.

39

It’s not hard to see why. An industry association is, for an entrepreneur, one of their main connections to the industry they serve. Through the association they can make contacts at major corporations in their field and find clients. Many of the professionals in the associations are retired, semi-retired, or approaching retirement and can provide advice and support to managers of growing businesses, alerting them to industry issues and common problems that they will confront.

The sheer number of NGOs can present an obstacle to this mentoring and networking function. In Alberta there are over thirty energy-industry related associations. Some serve niche industries like wind or solar power, while others serve the oil and gas sector. An entrepreneur or manager at a small firm may be confronted with up to half a dozen potential associations to join. Given their limited time and resources, they will likely be able to explore the resources of one. How much knowledge may be siloed in these organizations that is vitally important to growing companies, and how many potential connections may be lost by this redundancy?

This is part of a larger problem for NGOs in Alberta: redundancy. With 8,500 non-profits, with several organizations serving seemingly every part of society and the economy, it’s worth asking whether there need to be this many. In Edmonton alone over a dozen agencies are working with the homeless, no less than eight of them providing lodging. It’s time for governments to start considering whether it is time to start fostering consolidation among related NGOs to bring more talent, knowledge, and connections under one banner rather than multiplying bureaucracies, fundraising, and connections to government.

Consolidated industry associations can do more for their smaller members and help to foster innovation and entrepreneurship in Alberta. In addition to providing knowledge, mentoring, and connections they can advocate for procurement reform on the part of provincial and municipal governments, giving an initial boost to start-up companies through “Buy Alberta” initiatives. They can connect new graduates from our universities to growing companies, helping keep our investments in advanced education within the province. They can also, by sharing knowledge, alert budding entrepreneurs and inventors to technical needs within their industry that could be major opportunities with innovation.

The post carbon economy is in sight. Whether it is ended by carbon taxes that raise the cost of fossil fuels, some new energy breakthrough like fusion or hydrogen power that renders carbon outdated, or by some combination of the two it is vital that we in Alberta start planning for what that world looks like and what Alberta’s place will be in it. While it is irking to see Alberta abused in the world media as a major polluter it is also known as a place of growth where workers and companies from around the world come seeking opportunity. If we miss our chance to foster local innovation and grow competitive companies then the world won’t be talking about Alberta’s pollution; they’ll be asking “Whatever happened to Alberta?”

K. Clusters of Entrepreneurship and Innovation – Aaron Chtterji, Edward

Glaeser & William Kerr

Visit www.abctech.ca/government-and-policy

* * *

PAGE �1

Inspira(onTheFutureofProfessionsSurveyreportdrewinspira(onfromRichardandDavidSusskind’sbookofthesamename.Thisbookisabouttheprofessionsandthesystemsandpeoplethatwillreplacethem.Thebookfocusesondoctors,lawyers,teachers,architects,amongstmanyotherprofessions,andtheorganiza(onsinwhichthey

workandtheins(tu(onsthatgoverntheirconduct.Theauthorstheorizethatweareonthebrinkofafundamentalandirreversiblechangeinthewaythatexper(seis

madeavailableinsociety.Technologywillbethemaindriverofthischange.Theyalsoclaim,inthelongrun,wewillneitherneednorwantprofessionstoworkinthewaythatdidinthetwen(ethcenturyandbefore.

The Future of Professions A Survey Report

by Mursal Khedri & Perry Kinkaide

Withdevelopmentsingene(cs,ar(ficialintelligence,robo(cs,nanotechnology,3Dprin(ngandbiotechnology,tonamejustafew,wearefacinganexponen(algrowthininforma(onprocessing.Thesedevelopmentsarelayingthefounda(onforarevolu(onmorecomprehensiveandall-encompassingthananythingwe’veseenbefore.Smartsystemswillhelptackleproblemsrangingfromsupplychainmanagementtoclimatechange,andwillul(matelyout-performhumanbeingsatmosttasks. Whiletheimpendingchangesholdgreatpromise,theimpactonconsump(onandemploymentcreatedbyitwillpose

majorchallengestoprofessionals,requiringproac(veadapta(onbygovernments,regulatorybodiesandprofessions. Asen(reindustriesadjust,mostprofessionsarealsobeginningtoundergoafundamentaltransforma(oninthewaythattheir‘prac(calexper(se”ismadeavailabletosociety.Tradi(onally,prac(calexper(sehasbeenheldinpeople’sheads,textbooksandfilingcabinets.Increasingly,thisexper(seisbeingstoredandrepresentedindigitalforminavarietyofmachines,systemsandtools.Asaresult,itisbeinghandled,shared,usedandreusedinverydifferentways.

Fall, 2016

PAGE �2

Today,technologyandthemarket'sthirstforinnova(onareatthecoreofthischange,triggeringadebatethatisoPenpolarized,betweenthosewhoforeseelimitlessnewopportuni(esandthosewhoforeseemassivedisloca(onoftheprofessions.Themorelikelyrealityisspecifictotheindustry,regionandprofessioninques(on. ThesurveyofthefutureofprofessionsinAlbertaisafirststepinbecomingspecificaboutthechangesathand.Ittapsintotheviewsandexper(seofthosewhoarebestplacedtoobservethedynamicsoftheirprofessions–theprofessionalsthemselves.ByaskingAlbertaprofessionalswhatthecurrentshiPsmeanoncompe((onand

regula(ons,wewereabletoassesstheirimpactontheprofessionsfuture.Wealsosurveyedtheprofessionalsandtheirregulatorybodiesfortheirthoughtsonemergingskillsandcompetenciesrequiredtoremaincompe((veandtheiroutlookonthechangingexpecta(onsoftheirclients. WewanttothankthePeterLougheedLeadershipCollegeforintroducingus,andsuppor(ngtheconductofthisstudyasamentoringopportunitybetweentheUniversityofAlbertaandtheAlbertaCouncilofTechnologiesSociety.

EXECUTIVESUMMARYTheAlbertaCouncilofTechnologiesandThePeterLougheedLeadershipCollegeattheUniversityofAlberta,preparedastudyonthetopicoftechnology,innova(onandthefuture.Thissurveywasdesignedtoassesstheeffectsoftechnology,changingclientexpecta(ons,andcompe((ononthefutureoftheprofessionsinAlberta.ThestudywaslaunchedinMay/June2016andwaspresentedtoABCtech’s13,000subscribers.Thesurveyrespondentsarerepresenta(veofthefollowingprofessionalaffilia(ons:Engineering&Design(30%),Management&Strategy(20%),Health&Biotech(11%),Finance&Accoun(ng(8%),Legal&Security(8%),Agriculture&FoodProcessing(5%),Educa(on&Research(5%),Chemicals&Manufacturing(3%),Construc(on&RealEstate(3%),Communica(ons&Marke(ng(3%),Forestry&WoodProducts(3%)andTransporta(on&Logis(cs(1%).Highlightsofthestudyinclude:

• Increasingcompe((onisexpectedtoresultinlessregula(onbothwithinandbetweenprofessions;

• Technologyischangingtheexpecta(onsofclientsandprofessional-clientrela(onships;

• Clientsareexpectedtobemoreinformedandinterac(veinthefuture;atransi(onfromapassiveclienttoamoremarket-savvyconsumer;

• Technologyiseleva(ngclient’sexpecta(onsoftheprac((oner,increasingexpecta(onsforfasterandmoreefficientservice;

• Con(nuouslearningandtrainingareessen(alforsustainingthetrustandfuturerelevanceoftheprofessions;

• Noclearconsensusonwhethertheinfluenceoftheclientele/consumersshouldbeincreasedinregula(onprofessions.

WordCloudshighligh(ngtherespondents’mostfrequently

men(onedprofessions.

Figure1A:Primaryprofessions.

Figure1B:Otherprofessions.

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QUESTION1:SHOULDTHEREBEACHANGEINTHEREGULATIONOFCOMPETITIONINALBERTABETWEENAND/ORWITHINPROFESSIONS?Respondentsexpectincreasingcompe((ontoresultinlessversusmoreregula(on(1+2v.4+5)bothwithin(42%vs.20%)andbetween(37%vs.22%)professions.

OnlineSurveyDesign1. ThesurveywaslaunchedinMay/June2016toABCtech’sfollowersandconsistedofseveralques(ons.

Thesurveyresultswereconsolidatedandincorporatedintothisreport.2. Theprofessionsofinterestforourstudywerelawyers,engineers,teachers,accountants,management

consultants,pharmacistsandhealth(doctorsandnurses).SurveyRespondentsProfileTheviewpointsofthesurveyrespondentsformthebasisofthisreport.Theregulatedbodiesthatarerepresentedincludethe:Associa(onofProfessionalEngineersandGeoscien(stsofAlberta,CollegeandAssocia(onofRegisteredNursesofAlberta(CARNA),Ins(tuteofCer(fiedManagementConsultantsofAlberta(ICMCA),CharteredProfessionalAccountantsofAlberta(CPA),RealEstateCouncilofAlberta(RECA),CollegeofPhysiciansandSurgeonsofAlberta(CPSA)andtheLawSocietyofAlberta.

OursurveyfindingsareconsistentwiththeargumentofSusskind(2016)thataccesstoinforma(ontechnologyis:1)contribu(ngtoincreasedcompe((onwithinandbetweenprofessionsand2)increasingtheawarenessandexpecta(onsofclients,affec(ngtheprofessional–clientrela(onship.Marketforces–theincreasingexpecta(onsofclients-cum-consumersasperSusskind,areexpectedtohaveanincreasingimpactontheregula(onandgovernanceofprofessions.Con(nuouslearning-alreadymandatory,isfurtherelevatedinimportancewiththeintegra(onofinforma(ontechnologiesservingasanaide–perhapsevenanalterna(vetoprofessionalservices.

EXECUTIVESUMMARYCONTINUED

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Within• “Professionalorganiza(onsoPenmake

membersprac(ceinafunnelorprac(cearea,thereby,limi(ngtheirscopeandkillinginnova(on”—Engineer

• “Non-designatedprac((onerswhoprovideservicescanendangerthefaithoftheprofessionasawhole”—Accountant

• “Regulatedprofessionsmustensurepublichealthandsafetyareproperlymanaged,aswellasenvironmentalconcerns.Onlycer(fiedprofessionalsshouldbeallowedtoprac(ce.”—Engineer

Between• “Embracingopensourceandac(vesharingis

thewayforward.”—Teacher

• “Professionsshouldbegovernedbyrulesdevelopedinassocia(onwithinterna(onalbodies”—Architect

• “Governmentsshouldnotcompetewiththeprivatesectorbyoffering(unqualified)servicesatnocharge.”—ManagementConsultant

QUESTION2:PLEASERATETHEPAST,PRESENT,ANDFUTURERELATIONSHIPEXPECTEDWITHYOUBYYOURCLIENTS/CUSTOMERS.Respondentsviewtheirclients/customersasincreasinglymoreinterac(vethanpassive,moresointhefuture(74%vs.9%)thancurrently(58%vs.10%)orinthepast(41%vs.20%).

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QUESTION3:ISCONTINUOUSLEARNINGBYYOURPROFESSION’SPRACTITIONERSREQUIREDDUETOCHANGESINTECHNOLOGIES?COMMENTONWHATMAYBECONTRIBUTINGTOCHANGINGEXPECTATIONS.Respondentsareawarethatchangesintechnologiesareincreasingtherequirementforcon(nuouslearningintherespondent’sprofession(s).

Inthepast,wheninneedofexpertguidance,clientsturnedtotheprofessions.Theirmembersknewthingsthatothersdidnot,andtheydrewontheirknowledgeandexperiencetosolveproblems.Professionsactedas“gatekeepers”oftheirexclusivebodyofexper(se.Today,however,thisarrangementisunderthreatduetotechnologyandthedemocra(za(onofknowledgeaccess.Manysurveyrespondentsviewedtheirclientsasbeserinformedandac(ngasiftheyunderstandmore.Achallengetheprofessionsarefacing,nowandinthefuture,isofchangingclientexpecta(ons;theprofessionsarenolongertheexclusivegatekeepersofknowledge.

Past• “Mul(disciplinaryeduca(onprograms.”—Doctor

Today• “Clientsareexpec(ngconsultantstobemoreac(vely

involvedintheimplementa(onofrecommenda(ons.”—ManagementConsultant

• “Useofsocialmedia”—Teacher• “Peoplearemuchmorerela(onship-minded.”—Nurse

Future• “Connec(vityandinstantaccesschangesexpecta(ons.”

—Engineer• “Iexpectthatmorecommunica(onamongprofessionals

ontheteamgoingforwardwillenhancethecompe((venessofanyfirm.”—Accountant

• “Theyoungergenera(onwantstobepartofalldecisionsratherthandelega(ng.Moreexplana(onrequiredifdevia(ngfromGooglepathorexplainingwhyalterna(vesdonotapplytotheircircumstances.”—ManagementConsultant

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VeryMuch• “Con(nuousprofessionaldevelopmentisakeyaspectofprofessionalengineering.”—Engineer

• “Professionalsmustconstantlymaintaintheircompetencewithrespecttonewtechnologies.Arapidlyemerginganddisrup(veforcewillbepointofcaretechnologies,whichwillempowerindividualsandfurtherempowerprofessionalsintheirroles.”—Pharmacist

• “Theworldismovingtowardsmorecomplextechnologies,socon(nuouslearningismust.”—Lawyer

Notatall• “Required,butnotduetoemergingtechnologies.”—Teacher

• “Keepinguptodatewithcurrenttechnologiesisverymuchanindependentpursuit.”—Nurse

• “Con(nuouslearningrequirementsaremorerelatedtochangesinlawsandregula(ons.”—RealEstate

Compe((on,newtechnologiesandincreasingclientexpecta(ons,i.e.,marketforces,mayleadtoanincreaseinunethicalprac(cesandanevengreaterneedforcon(nuouslearning.

QUESTION4:ISTECHNOLOGYCHANGINGTHEEXPECTATIONSOFCLIENTELE/CUSTOMERSSERVEDBYYOURPROFESSION?Almostall(71%)ofrespondentsviewtechnologyaschangingtheexpecta(onsoftheirprofessionsclientele/customers.Morethanhalfviewtechnologyasverymuchchangingclientexpecta(ons.

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AsperSusskind,individualexpertsandspecialistsarethosewhoknowmorethanothers,andofferanessen(alservice.Theirserviceshavebeentailoredtotheirclientsandtheirspecificrequestsorproblems.However,withtheopenaccesstoinforma(onthroughforexampletheWorldWideWeb,clientsalready“know”whattheywantfromtheirprofessionals.Pa(entsnolongercometotheirdoctor’sofficeseekingatreatmentplan,moreoPenthey’recomingtoconfirmtheirself-diagnosis.Clientsarebecomingconsumers.Savvyclientsareexpec(ngtheirvendorstobecurrent.Technologyhasenabledbothinstantaccesstoinforma(onandimprovedaccesstoservice.Respondentsofoursurveyindicatedthattheywereundertremendouspressuretoprovideservicesquickly,accurately,andcosteffec(vely.Manyrespondentsechoedthissen(mentbyindica(ngtheirclientele’sneedformorepersonalizedservicesandmorespecificrecommenda(ons.Technologyiseleva(ngtheclient’sexpecta(onsoftheprac((oner,increasingexpecta(onsforfasterandmoreefficientservice.Somerespondentsnotedthatincompletemediacoverageoftechnologyalsoplaysaroleinraisingexpecta(ons,evenmorethanthetechnologyitself.Theconceptof(me,andfaster,quickerservice,wasacommonandreoccurringthemeamongcommentsbyrespondents.

VeryMuch• “Ascommunica(onandtechnologyimproves,savvyclientswillexpecttheirvendorstobecurrent.”-Engineer

• “Nolongeristhedoctortheonlyoneintheroomwhoknowsthefacts”—Doctor

• “Technologyfacili(esatempta(onforclientstorelyonProfessorGoogle.”—ManagementConsultant

Notatall• “Itistheinterac(onwiththeclientsthatdetermineexpecta(ons,notnecessarilykeepingpacewiththetechnologicaladvances.”—Architect

QUESTION5:SHOULDTHEINFLUENCEOFCLIENTELE/CUSTOMERSBEINCREASEDINREGULATINGYOURPROFESSION?Noclearconsensusonwhethertheinfluenceoftheclientele/consumersshouldbeincreasedinregula(onprofessions.

PAGE �8

VeryMuch• “Twowaycommunica(onisalwaysthemosteffec(veinestablishingbestprac(ce.”-Lawyer

• “Client/publicfeedbackisimportant.Theprofessionincludesasocialcontract/licensetoactintheinterestofthepublic.”—Engineer

• “Yes,itwillkeepthelevelofqualityup,byforcingprac((onerstobecer(fied.”-Accountant

Notatall• “Clientsdemandsgrosslyexceedavailableresources.”—Realtor

• “Professionalregula(onsareestablishedtomaintainprofessionalstandardsofperformanceonbehalfofsociety,nottheclients.”—Engineer

• “Technicalindependenceisastapleoftheserviceweareabletoprovide.Ibelievethattheinfluenceoftheclientelecouldcompromisethisindependence.”—ManagementConsultant

CONCLUSION

ThestudywasconductedtoassessAlbertaprofessionalsviewsoftheimpactofincreasingcompe((onandclientexpecta(onsontheirprac(cesandregula(onoftheprofessionsinAlberta.AsperSusskind,professionshavebeenknownasthegatekeepersofknowledgeandexper(se,warran(ngtheirprofessionaldesigna(onandexclusiverightsofprac(ce.Theriseofemergingtechnologiesandopenaccesstoinforma(onareincreasingcompe((onwithinandbetweenprofessions.Aswell,prac((onersarefacedwithchangingclientexpecta(onsandincreasingdemandsontheprac((oner’srela(onalskills,asformerlylessdemandingclientsbecomemoreinformedandmoredemandingconsumers.Respondentsiden(fiedthattheirclientswantincreasinglyfasterandquickerservicethanbeforeandthatprofessionalsarenolongertheonlyonewithexpertknowledge.Whileprac((onersengageincon(nuouslearninginordertostaycompe((veintheirfields,regulatorsmustensurethattheyunderstandtheroleofmarketforcesintheirprofessions.Regulatorsmustknowboththeroleofmarketforces,butalsounderstanditsinfluenceonprac((oner’sprac(ces.Therefore,theymustensurethereisongoingeduca(onanddisciplineintheirprac(ceandthattheprofessionalsaredoingwhattheyareauthorizedasprofessionalstodo.