Research and Development Impact Assessment for Innovation-Enabling Organizations

Article excerpt

Many research and development (R&D) organizations exist to enable innovation through the provision of science-based technology services, ranging from applied research through development, design, testing, scale-up, demonstrafion, and technology transfer into the marketplace. (1) These include public-sector organizations, like the government-owned research and technology organizations (RTOs), and private-sector organizations, like the not-for-profit research and engineering companies and the research and engineering departments or subsidiaries of listed and privately held business corporations. One thing that each of these organizations has in common is an ever-increasing need to measure and demonstrate the outcomes and the impacts of their R&D and therefore the return on investment that their work delivers, regardless of whether the original investments came from internally or externally generated funds, from the public or private sectors, or both.

We have developed an R&D impact assessment tool (i.e., Smart Science Impacts[TM]) that relies on "the voice of the customer" to provide inputs that can be aggregated and scaled-up to provide conservative estimates of R&D return on investment. Although the Saskatchewan Research Council originally developed the Smart Science Impacts[TM] tool for use by government RTOs, the tool can be adapted for use by any organization or organizational unit that conducts, funds or contracts R&D.

In order to illustrate the development and use of the tool, this article highlights as a case study its evolution at the Saskatchewan Research Council (SRC), a Crown corporation and RTO based in the province of Saskatchewan, Canada. The council has a public-good mandate to help the people of Saskatchewan develop a strong economy, with quality jobs and a secure environment. It does this by developing and providing innovative, scientific and technological solutions, applications and services that, branded as Smart Science Solutions[TM], help business and industry grow and thrive.

Building on a modest level of base government investment (about twenty-five per cent of total revenues), SRC provides most of its services through individual or consortium-style contract projects, frequently in collaboration or partnership with universities, various levels of government, and a wide range of private-sector organizations. The total amount of SRC's R&D work is now over Can$80 million per year.

Given its mandate, as noted above, a key success measure for SRC would logically be its impact on the Saskatchewan economy. This would not only tie to SRC's mandate but to its business success, which is dependent on the success of SRC's clients. However, from SRC's inception in 1947 until very recently, SRC did not actually measure its impact on the economy. For many years it was felt that it would be extremely difficult to assess the return on money invested in research and development, although as a market-pull R&D organization it was taken as an article of faith that reaching a successful conclusion to almost any of the significant research and development programs would contribute large returns on investment. An example is the following quote from SRC's 1949 annual report:

It is difficult to assess the return on money invested in research; certainly no attempt will be made to arrive at an estimate in this report. It may be observed, however, that a relatively small proportion of the provincial income is spent upon research. A successful conclusion to almost any of the projects listed above will offer the people of this province a potential return far beyond the amounts invested (Saskatchewan Research Council 1950: 1).

In order to achieve greater accountability for its work, and to provide a credible means of demonstrating its success, SRC launched a project in 2002 to develop an economic impact audit process that would ensure that collected data would provide a solid indication of the direct economic impact of SRC's work. …