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					1                                     Assessment Framework for the Daegu Initiative



FORMAT OF SELF-ASSESSMENT REPORT
CHECKLIST ITEMS FOR AREA A: DEVELOPING HUMAN RESOURCES AND TECHNOLOGY THROUGH LINKAGE BETWEEN INDUSTRY
AND EDUCATIONAL AND RESEARCH INSTITUTIONS
Element                              Checklist Item                                     Evaluation Criteria                       Comments
1. Joint research     A-1 Are there any targeted research            2                                                      These programs do not
and development       collaboration programs that involve SMEs     Business-Led Networks of Centers of Excellence are       target SMEs directly
among university-     as designated participants of research       large-scale collaborative networks that help increase    but apply instead to all
industry-institutes   projects?                                    private sector investments in research, support the      businesses.
                                                                   training of skilled researchers and accelerate the
                                                                   timeline involved in transferring ideas from the
                                                                   laboratory to products in the marketplace.

                                                                   Four networks, representing the health,
                                                                   environmental, and energy and natural resources
                                                                   priorities of the S&T Strategy, were selected to
                                                                   receive $39.3 million over four years.
                      A-2 Basic statistics on R&D investment        -   Canada is an OECD member country.                  OECD countries are
                      flows: 1) The level of R&D investment                                                                exempted to submit the
                      performed by university that is financed by                                                          data
                      industry; 2) The level of R&D investment
                      performed by university that is financed by
                      government; 3) The level of R&D investment
                      performed by government research institutes
                      that is financed by industry; 4) The level of
                      R&D investment performed by industry that
                      is financed by government
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2. Patent or        A-3 What proportion of issued patents is                         Small Entity Fee Uptake               - The Canadian
Technology transfer owned by SMEs (the patents issued in each                      % of all         % of Canadian         Intellectual Property
                    member state’s patent office)?                    Year       Applications        Applications         Office (CIPO) data is
                                                                      2005         9,64%               23,63%             based on “small entities”
                                                                      2006         8,47%               21,33%             (businesses with fewer
                                                                      2007         7,53%               18,64%             than 50 employees).
                                                                                                                          However, some small
                                                                                                                          businesses for several
                                                                                                                          reasons, do not identify
                                                                                                                          themselves as small
                                                                                                                          business entities so the
                                                                                                                          data may not accurately
                                                                                                                          reflect the number of
                                                                                                                          small businesses that
                                                                                                                          apply for patents.
                     A-4 Does the government provide special      4
                     incentives or institutional supports to SMEs -    The Canadian Intellectual Property Office (CIPO)
                     for patent application?                           offers special reduced fees to “small entities”
                                                                       (defined as businesses with fewer than 50
                                                                       employees). These fees are typically 50% less
                                                                       than fees for larger businesses.

                     A-5 Are there mechanisms to promote           1
                     technology transfer from public research      There are no such processes
                     organizations to SMEs? Is there any
                     incentive given to public organizations for
                     licensing publicly own patents?What
                     proportion of public/university patents are
                     licensed to SMEs?
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3. Utilization of     A-6 Are there policies that enable SMEs to    4
human resources       consult scientists and engineers in public    The objective of the College and Community
and research          institutes? (including. universities)?        Innovation Program (CCIP) is to increase innovation at
facilities in                                                       the community and/or regional level by enabling
universities and                                                    Canadian colleges to increase their capacity to work
                                                                    with local companies, particularly SMEs
institutes
                     A-7 Are there policies that stimulate public   1
                     research institutes (including universities)   There are no such processes
                     that open research facilities to private sector?
                     Does government provide additional
                     incentives if the users are SMEs?
4. Incentives to      A-8 Are there policies to promote and           4                                                       For more information
attract young talents teach students entrepreneurial spirits and      The Government of Canada supports the Canadian         see: cybf.ca
to SMEs               awards young entrepreneurs?                     Youth Business Foundation (CYBF) which provides
                                                                   business training, loans and mentoring services to
                                                                   young entrepreneurs. Since 2001, the CYBF has
                                                                   received CAD$47.5 million from the federal
                                                                   government. The CYBF also gives out annual awards
                                                                   to Canada’s top young entrepreneurs.
                      A-9    Are there policies that stimulate SME 4
                      to hire postgraduate science/engineering
                      degree holders to increase technological      The Industrial Research and Development Internship
                      competence of SMEs?                           (IRDI) program places graduate students and post-
                                                                    doctoral fellows in businesses to undertake research
                                                                    that addresses practical business problems. The
                                                                    program will receive a total of CAD$35 million until
                                                                    2014 and support 1,000 internships/year.

                                                                    5
                                                                    National Research Council’s Industrial Research
                                                                    Assistance Programme (NRC-IRAP)
                                                                         Provides innovative SMEs with financial
4                                      Assessment Framework for the Daegu Initiative


                                                                              assistance to hire highly skilled science and
                                                                              engineering students.
                                                                             Placements range 6-12 months with a
                                                                              maximum costs of $30,000 towards the salary
                                                                              costs of a graduate intern.
                                                                             Graduates work on innovative projects,
                                                                              contribute to R&D and are involved with the
                                                                              commercialisation of research.
5. Supply of          A-10 Are there dedicated education              1                                                         Several Canadian
human resources       programs customized to SME requests? Is         There are no such processes                               universities and colleges
that meet the needs   the program operated at the level of a                                                                    offer courses aimed at
of SMEs               separate department or at the level of                                                                    SMEs or at students who
                      additional courses? Does government play                                                                  want to start their own
                                                                                                                                business (e.g. in the
                      roles in the modification of curriculum?
                                                                                                                                engineering faculty) but
                                                                                                                                these courses are
                                                                                                                                designed by the
                                                                                                                                university/college, not at
                                                                                                                                the SME request. The
                                                                                                                                government does not
                                                                                                                                play a role at all.
                      A-11 Are there government sponsored             3
                      training programs that train employees to       There are no such processes at the federal level
                      upgrade skills? (If so, are they targeted for   because much of the skills training is provided by the
                      SMEs?)                                          provincial and territorial governments, not the federal
                                                                      government. However, the federal government does
                                                                      offer taxable cash grants designed to encourage
                                                                      apprentices registered in designated trades to continue
                                                                      and complete their apprenticeship programs and receive
                                                                      their certification.
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CHECKLIST FOR AREA B: ACCESS TO SPECIALIST ASSISTANCE AND ADVICE
Element          Checklist Item           Evaluation Criteria                               Comments
1. Assessing     B-1. Does your           1
technical        government regularly     There are no regular meetings;
challenges       meet with
facing SMEs      representatives from
                 innovative SMEs, and
                 discuss their needs?
2. Consulting    B-2. Does your economy   - Report the latest UNCTAD ICT statistics in       - The data is available from
SMEs             have broadband             following categories:                              http://www.unctad.org (click statistics 
digitalization   connections widely       · Proportion of enterprises using computers;         statistical databases on line  ICT statistics)
                 available to your        · Proportion of enterprises using Internet;
                 businesses? If not, is   · Proportion of enterprises with a website;
                                          · Proportion of enterprises receiving orders
                 there a plan on
                                            over Internet;
                 introducing more         · Proportion of enterprises placing orders over
                 broadband connections      Internet;
                 to businesses?           · Proportion of enterprises accessing Internet
                                            by ISDN, Fixed line connection under 2
                 Victoria                   Mbps and over 2 Mbps;
                 B-3 Does your            1
                 economy’s government
                 offer advice to your
                 SMEs on how best to
                 digitalize their
                 businesses
                 B-4. Does your           - 4                                               In spite of a delayed start-up in its first year
                 economy also offer       The Small Business Internship Program (SBIP)      (2009-2010), there has been a good uptake and
                 financial and/or tax     provides SMEs with financial support (i.e. a      strong response of the program by SMEs and
                 assistance for SME       wage subsidy to hire a post-secondary student     expected results are that over 80% of
                                          intern to assist them in their adoption of        contributions allocated for youth salaries and
6                                          Assessment Framework for the Daegu Initiative


                 digitalization?             information and communications technologies       mandatory costs will be utilized and that over
                                             (ICT) to increase their productivity and          350 ICT internship projects will be completed.
                                             competitiveness.
3. Research      B-5. Does your              1
equipment        economy maintain            No such programs are offered;
and human        programs for making
resources        required equipment
search system    available to innovative
                 SMEs?


                 B-6 Does your               1
                 economy’s government        No such databases are available to SMEs
                 maintain a database of
                 expert consultants who
                 would be useful for
                 innovative SMEs, and
                 can innovative SMEs
                 access that database to
                 find experts that they
                 need?
4. Expanding     B-7 Does your economy       4
public service   provide consulting          The Business Development Canada (BDC)
benefits         services for SMEs           offers customized consulting services in
                 concerning technical,       operational efficiency, transition programming,
                 entrepreneurial, legal      innovation, market development, business
                                             planning and management. BDC consulting
                 or tax issues?
                                             services are delivered by 99 consulting
                                             managers with a physical presence in 60
                                             branches, supported by a network of more than
                                             500 BDC-registered external consultants.
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                                           National Research Council Industrial Research
                                           Program (NRC-IRAP) provides trust advisory
                                           services and technical expertise delivered by
                                           over 240 qualified Industry Technology
                                           Advisors (ITAs)
5. Innovation   B-8. Does your             No such federal programs exists                 There are not-for-profit groups that work with
education for   economy encourage                                                          high school and university students like Junior
SME             high school and college                                                    Achievement (http://www.jacan.org/) and
employees       educational programs                                                       Advancing Canadian Entrepreneurship
                dealing with running                                                       (http://www.acecanada.ca/) to promote
                                                                                           entrepreneurship.
                innovative businesses?
                B-9 Does your            No such program exists
                economy have programs
                to encourage SME
                employees to get further
                education?
6. Others       B-10. Does your            5
                economy have any other     National Research Council Industrial Research
                programs to facilitate     Program (NRC-IRAP) provides trust advisory
                specialist assistance      services and technical expertise delivered by
                and advice to innovative   over 240 qualified Industry Technology
                                           Advisors (ITAs)
                SMEs?
8                                      Assessment Framework for the Daegu Initiative



CHECKLIST FOR AREA C: ENHANCING AVAILABILITY OF CAPITAL TO INNOVATIVE SMES
Element          Checklist Item                     Evaluation Criteria                            Comments
1. Providing     C-1. Are there R&D grant           5                                              In terms of the effectiveness, analysis
financial        programs for innovative SMEs,      National Research Council Industrial           suggest that NRC-IRAP clients have
incentives for   and if such programs exist, what   Research Program (NRC-IRAP) – provides         experienced growth, both in real and
innovative       are their amounts and              financial support to qualified innovative      comparative terms. Sales grew on
SMEs             effectiveness?                     SMEs to help them develop technologies. The average by just over 28%, overall firm
                                                    program operates on a shared-risk model,       employment grew by 30%, and
                                                    providing cost-shared financial assistance for company assets grew on average by
                                                    R&D projects that meet both the firm and       15%.
                                                    project assessment criteria. Financial support
                                                    may be provided for an eligible R&D project,
                                                    supporting up to 100 percent of salary costs
                                                    associated with the project, or up to 75% of
                                                    the contractor fees.
                 C-2. Are there tax incentive       2                                              Usage statistics show that it is mostly
                 programs for innovative SMEs,      The SR&ED (scientific research &               large firms who use the SR&ED tax
                 and if such programs exist, what   experimental development) program is a         credit as opposed to SMEs. The ratio
                 are their amounts and              federal tax incentive program, administered    is approximately 90:10.
                 effectiveness?                     by the Canada Revenue Agency (CRA), that
                                                    encourages Canadian businesses of all sizes,
                                                    and in all sectors to conduct research and
                                                    development (R&D) in Canada. It is the
                                                    largest single source of federal government
                                                    support for industrial R&D.

                                                    The SR&ED program gives claimants cash
                                                    refunds and/or tax credits for their
                                                    expenditures on eligible R&D work done in
                                                    Canada.
                 C-3. Are there public              2                                               The CICP is still under development
                 procurement programs for           The Canadian Innovation Commercialization       and expects to be launched later in
9                                       Assessment Framework for the Daegu Initiative


                 innovative SMEs, and if such          Program (CICP) was announced on the              2010.
                 programs exist, what are their        March 2010 Budget. It is a $40 million, 2-
                 amounts and effectiveness?            year pilot project through which federal
                                                       departments and agencies will adopt and
                                                       demonstrate the use of innovative prototype
                                                       products and technologies developed by
                                                       SMEs. Maximum award per project will be
                                                       CAD$500,000.
2. Providing     C-4. Are there policy-loan            1                                                There are programs for SMEs generally
SMEs with        programs for innovative SMEs,         There are no such programs                       but not for innovative SMEs
Policy loans     and if such programs exist, what
based on         are their amounts and
technological    effectiveness?
competence
or feasibility
evaluation       C-5. Are there evaluation             1
                 processes of technological            There are no such processes
                 competence and feasibility in
                 policy loan programs?
3.               C-6. Are there special SME banks      4                                                - BDC client revenue 9% to 59%
Establishing     or financial institutions which are   Business Development Canada – BCD has            higher for combined BDC financing
an institution   established for providing policy-     two financing programs: (a) long-term            and consulting clients versus non-
dedicated to     loans for SMEs, and if such           financing and (b) subordinate financing. BDC     clients
                                                       long-term financing is designed to support        - There is on average a 41.5% increase
providing        banks or institutions exist, what
                                                       business growth, start-ups and innovation        in employment for BDC financing
SMEs with        are their amounts and                 strategies, and to offer equipment financing     clients following BDC support
guaranteed       effectiveness?                        for modernization purposes. BDC also offers      - Clients that received financing in
loans                                                  subordinate financing of $250,000 to $10         fiscal year 2009 sustained 510,875
                                                       million for 5-7 year terms, providing a hybrid   jobs;
                                                       for of financing that combines both elements     - 82% of BDC financing clients
                                                       of debt and equity financing to more mature      surpassed a 5-year survival rate
                                                       and growing businesses with excellent            - BDC is completely self-sustaining,
10                                    Assessment Framework for the Daegu Initiative


                                                   potential. Overall, BDC has $4 billion in        with a reported $90.6 million dividends
                                                   financing activity per year and 76.5% of its     to the Government of Canada since
                                                   support is directed to SMEs with less than 20    1997.
                                                   employees.

                                                   Export Development Canada (EDC) provides         EDC has provided $14 million in
                                                   loans designed to help Canadian companies        financing, generating $57.8 billion to
                                                   provide their customers with flexible            Canada’s GDP, 572,000 jobs and $522
                                                   financings, tailored to meet evolving market     billion in exports of goods and
                                                   conditions throughout the world. Financing is    services.
                                                   provided to support international transactions
4.              C-7. Are there loan guarantee      1
Strengthening   programs for innovative SMEs,      There is no such program
support for     and if such programs exist, what
guarantee       are their amounts and
                effectiveness?
                C-8. Are there government loan     4                                                On average, the Program helps SMEs
                guarantee institutions which are   The Canada Small Business Financing              access 10,000 loans worth more than
                established for providing          Program (CSBFP) is a loan-loss guarantee         $1 billion each year. The average size
                guarantees for SME loans and if    program. Under the CSBFP, Industry Canada        of the loans in 2008-2009 was $116
                                                   and commercial lenders share the risk of         800.
                such programs exist, what are
                                                   providing small businesses with term loans
                their amounts and effectiveness?   for acquiring real property and equipment and    The CSBFP recently underwent a
                                                   making leasehold improvements. The federal       review and evaluation. Some of the
                                                   government will pay the lenders up to 85         key findings include:
                                                   percent of eligible losses on defaulted loans
                                                   registered under the program. The maximum        In several key areas, CSBFP borrowers
                                                   loan amount guaranteed under the program is      outperform comparable SMEs who
                                                   CAD$350,000 or CAD$500,000 for real              have not received a CSBFP loan.
                                                   property purchases.                              SMEs who are CSBFP borrowers have
                                                                                                    consistently higher levels of business
                                                                                                    survival compared to non-CSBFP
                                                                                                    borrowers. They are able to increase
11                                   Assessment Framework for the Daegu Initiative


                                                                                     their business investments (total
                                                                                     assets) at a faster pace when compared
                                                                                     to non-CSBFP borrowers. Their
                                                                                     companies also experience higher
                                                                                     levels of sales growth.

                                                                                     CSBFP borrowers experience greater
                                                                                     employment growth compared to non-
                                                                                     CSBFP borrowers, and their
                                                                                     employment levels increase at a faster
                                                                                     pace. There does not appear to be an
                                                                                     impact on profits as a result of
                                                                                     obtaining a CSBFP loan.

                                                                                     The CSBF Program, as it is currently
                                                                                     structured, is not cost recoverable
                                                                                     when administration and registration
                                                                                     fees are the only revenues used in the
                                                                                     calculation. However, it can be
                                                                                     considered cost-recoverable over the
                                                                                     study period when incremental federal
                                                                                     income taxes and GST(goods and
                                                                                     services tax) generated by CSBFP
                                                                                     borrowers are considered.

                                                                                     For more information, please see:
                                                                                     http://www.ic.gc.ca/eic/site/ae-
                                                                                     ve.nsf/eng/03101.html
5.             C-9. Do banks have special          1
Streamlining   programs for streamlining SMEs’     There are no such programs
SME            financing procedures, and if such
financing      programs exist, what are their
procedures     amounts and effectiveness?
12                                    Assessment Framework for the Daegu Initiative


               C-10. Are there governmental         1
               promotion programs for               There are no such programs
               streamlining SMEs’ financial
               procedures?
6.             C-11. Are there government           3                                                The BDC program does not apply only
Considering    venture capital programs for         Business Development Canada (BDC)                to innovative SMEs but rather to all
SMEs outside   innovative SMEs, which can be        provides subordinate financing of $250,000       SMEs who qualify.
policy         either direct equity financing       to $10 million for 5-7 year terms, providing a
support        programs or hybrid-funds with        hybrid form of financing that combines
                                                    elements of both debt and equity financing to
               private venture capital, loans and   more mature and growing businesses with
               if such programs exist, what are     excellent potential. For the 12 months ending
               their amounts and effectiveness?     March 31st 2010, BDC authorized $68.3
                                                    million in subordinate financing.

                                                    Further, BDC provides VC for every stage of
                                                    a company’s development cycle, from seed
                                                    through expansion, with a focus on early-
                                                    stage and fast-growing businesses. It also
                                                    invests indirectly through investments in
                                                    other VC funds. Currently BDC has $4
                                                    million committed in 95 active companies –
                                                    24% life sciences, 10% telecommunications,
                                                    13% information technology – and has
                                                    $265.1 million committed in 22 funds
                                                    (constituting approximately 39% of VC
                                                    allocations). The BDC’s VC activity
                                                    constitutes 4.6% of all VC activity in Canada.
                                                    It has been ranked 49th in the world in the
                                                    Red Herring Top Global VC Funds Ranking
                                                    and number 1 in Canada.
               C-12. Are there policy programs      1
                                                    There are no such programs
13                          Assessment Framework for the Daegu Initiative


     for promoting networks of
     venture capitalists, which are
     often called as business angel
     networks (BANs)?
14                                  Assessment Framework for the Daegu Initiative



CHECKLIST ITEMS FOR CRITERIA D: NETWORK AND CLUSTERING FOR INNOVATIVE SMES
 Element          Checklist Item                   Evaluation Criteria                                     Comments
1. Policy for     D-1. What kinds of policies       4                                                    For more information on Canada’s
clustering SMEs   exist that provide incentives                                                          innovation clusters, please visit:
by region         for the regional clustering of    The National Research Council (NRC) has
                                                                                                         http://www.nrc-
                  firms? Are there policies         established a substantial presence in 11 technology
                                                    clusters across the country. As part of NRC’s        cnrc.gc.ca/eng/locations/index.html
                  specifically designed for
                                                    clustering initiatives in these communities, the
                  facilitating regional networks
                                                    organization’s research institutes act as hubs,
                  between public research           offering cluster players state-of-the-art, federally
                  institutes and SMEs?              funded labs and equipment, incubation space and
                                                    critical business development mentoring.

                                                    The 2010 federal budget provided $135 million
                                                    over the next two years to build on the success to
                                                    date of the cluster initiatives.
                  D-2 Are there special             4                                                       All 13 provinces and territories
                  subsidies / policies for SMEs     There is such mechanism, and it is effective           offer SME support programs.
                  prepared by regional                                                                     Some municipal (local)
                  governments?                                                                             governments also offer programs.
                                                                                                           They are too numerous to list here.
2. Policy for     D-3 Does government pay           4
clustering SMEs   special attention to the         The only national SME association in Canada is the
by industry       industrial associations          Canadian Federation of Independent Business
                  comprised mainly of SMEs?        (CFIB). However, its members are from all
                                                   sectors of the Canadian economy. It has been
                                                   successful in the past in influencing federal policy,
                                                   most notably in the area of red-tape reduction.
15                                   Assessment Framework for the Daegu Initiative


                   D-4 Does government                1
                   provide benefits for SMEs of       There are no such mechanism
                   local supply chain by setting
                   up industrial districts?
3. Policy for      D-5 How many public                Please see attached annex
promoting          incubating centers are
clustering SMEs    operated and how much
                   resources are invested for its
                   operation? - Please provide
                   financial support level of
                   government in terms of the
                   absolute amount and relative
                   share of funding (public/
                   private).
                   D-6 Are incubating centers       Canada’s incubating centres are mainly located in
                   mainly located at university     universities.
                   campuses, private sector
                   buildings, or government
                   research institutes?
4. Strengthening   D-7 Are there policies to      2                                                       These programs do not target
network among      promote knowledge sharing        Business-Led Networks of Centers of Excellence are SMEs directly but apply instead to
clusters           between different clusters or    large-scale collaborative networks that help increase
                                                                                                          all businesses.
                   between industrial               private sector investments in research, support the
                   associations (mainly             training of skilled researchers and accelerate the
                                                    timeline involved in transferring ideas from the
                   comprised of SMEs)?              laboratory to products in the marketplace.

                                                    Four networks, representing the health,
                                                    environmental, and energy and natural resources
                                                    priorities of the S&T Strategy, were selected to
                                                    receive $39.3 million over four years.
16                    Assessment Framework for the Daegu Initiative


     D-8 Are there policies that    1
     link the SME clusters          There are no such mechanisms
     internationally? Does
     government sponsor
     international SME centers to
     encourage global operation
     of SMEs?
17                                     Assessment Framework for the Daegu Initiative



CHECKLIST ITEMS FOR AREA E: ESTABLISHING APPROPRIATE LEGAL AND REGULATORY STRUCTURE
Element        Checklist Item                       Evaluation Criteria                               Comments
1. Providing   E-1. Does your economy have a         There is no legal definition.                        There is no legal definition of an
Legal          legal definition of an innovative     Statistics Canada (the federal statistics            SME in Canada but Statistics Canada
Support for    SME? If not, does your economy        agency for Canada), in its surveys on                generally uses the following
Innovative     have a widely used working            manufacturing uses the following definition          definition:
SMEs           definition of an innovative SME?      of an innovative manufacturing firm:
                                                    - product innovation: a firm has introduced       -     small business has fewer than 100
                                                        to the market a new good or service or a            employees
                                                        significantly improved good or service.       -     an SME has fewer than 500
                                                    - process innovation: a firm has                        employees
                                                        implemented a new or significantly
                                                        improved production process, distribution
                                                        method or support activity for its goods or
                                                        services
               E-2. Are there mechanisms to          2                                                    - The SME outreach initiative is
               explain IPR laws to SMEs, and         The Canadian Intellectual Property Office              currently underway so it is not
               help SMEs make the most of rights     (CIPO) has launched an awareness                       possible yet to assess its
               and protection as specified in the    campaign to make SMEs more aware of                    effectiveness
               national IPR laws?                    Canada’s IP system and of how to use IP
                                                     strategically.
               E-3. Are there processes in place     2                                                    The CDSR only applies to regulation
               to consider the effects of            The Cabinet Directive on Streamlining                (not legislation) and covers business
               legislation on SMEs?                  Regulation (CDSR) includes a requirement             broadly (not specifically SMEs)
                                                     to assess the positive and negative impacts
                                                     of regulation on business. Regulators are
                                                     asked to mitigate the negative effects on
                                                     business.
               E-4 How efficiently does your        In Canada there are 36 procedures to
               economy enforce private              complete, it takes on average 560 days and
               contracts?                           the cost is usually 22.3% of the claim. For
18                                       Assessment Framework for the Daegu Initiative


                                                       the enforcement of private contracts,
                                                       Canada ranks 58th in the world.
                E-5 Does your economy have a            1
                comprehensive plan to assist            There is no such comprehensive plan
                innovative SMEs, and are they set
                in legislation?
2. Promoting    E-6. Are there official processes or    1
public          mechanisms to introduce                 There are no such processes or mechanisms;
institutions’   innovative SME products to public
purchases of    institutions who may be potential
SME             customers?
products        E-7. Are there official rules or        1
                guidelines encouraging public           There are no such rules or guidelines
                institutions to purchase from
                SMEs?
                E-8 Are there official rules,           1
                guidelines or programs                  There are no such rules or guidelines best
                encouraging public institutions to      practice.
                purchase from innovative SMEs?
3. Enhancing    E-9. Does the technical standards      1
support for     and conformance system contain         There are no such provisions
technically     provisions which give due
competent       consideration to difficulties faced
SMEs            by SMEs? If so, what are they?
                Are there any indicators of
                effectiveness?
                E-10. Does the technical               1
                standards and conformance              There is no such assistance
                authority or the SME authority
                offer assistance to SMEs applying
19                                     Assessment Framework for the Daegu Initiative


               for technical standards, or
               conformance certification? If so,
               what are they? Are there any
               indicators of effectiveness?
               E-11. What other support does         None
               your economy offer for technically
               competent SMEs?
4. Enhancing   E-12. Are there support and           See C-2
support for    incentives for R&D, and are SMEs
the R&D        eligible? If there are
area           performance indicators for such
               incentives (such as amount
               disbursed or number of projects),
               report or refer to them in the IAP
5. Others      E-13. Does regulatory review          See E-3
               and reform system exist, and does
               it explicitly take problems of SMEs
               into account?
               E-14. Does the regulatory review      1
               and reform system give due            The regulatory review and reform system
               consideration to the introduction     does not explicitly give due considerations
               of new products and processes?        for new products and processes
               E-15. In the area of legal and
               regulatory structure, what other
               relevant measures are in place?
20                                        Assessment Framework for the Daegu Initiative



CHECKLIST ITEMS FOR AREA F: ESTABLISHING A MARKET CONSISTENT ECONOMIC ENVIRONMENT
Element             Checklist Item                  Evaluation Criteria                        Comments
1.                   F-1 Are there programs,         1
Strengthening        which promote                   There are no such programs;
cooperation          partnerships between
between large        innovative SMEs and
companies and        appropriate large
SMEs                 businesses?
2. Facilitating      F-2 Are there programs to       See B-4
digitalization of    facilitate digitalization of
SMEs                 SMEs?
3. Supporting        F-3 Are there programs to       3
SMEs to make         support innovative SMEs         The Trade Commissioner Service of         For more info, please see:
inroads into         exporting to foreign            Canada offers assistance to businesses    http://www.tradecommissioner.gc.ca/eng/home.jsp
overseas             markets?                        who wish to invest and/or trade abroad.
markets
                                                     Export Development Canada (EDC) is       None of these programs target innovative SMEs
                                                     Canada’s export credit agency,           specifically.
                                                     supporting a broad range of exporters
                                                     across Canada. Its mandate is to support
                                                     and develop Canada’s export trade and
                                                     Canadian capacity to engage in that
                                                     trade as well as to respond to
                                                     international business opportunities by
                                                     ensuring that Canadian companies have
                                                     access to financing, risk management
                                                     and intelligence services.

                                                     In terms of products and services, the
                                                     Business Development Bank of Canada
                                                     (BDC) provides lines of credit, loans,
21                       Assessment Framework for the Daegu Initiative


                                   project financing and loan guarantees
                                   designed specifically to help Canadian
                                   companies provide their customers with
                                   flexible financing to meet evolving
                                   market conditions throughout the world.

                                   EDC also provides an array of insurance
                                   products designed to protect policy
                                   holders against various types of risk and
                                   provides contract bonding to help
                                   Canadian companies post or secure
                                   sureties, guarantee bids, performance
                                   bonds, and other obligations related to
                                   export trade. EDC additionally provides
                                   intelligence support to Canadian
                                   companies through EXPORT Check,
                                   where SMEs can obtain valuable
                                   financial and credit information on US
                                   and foreign customers using an online
                                   database
     F-4. How easily can          Canada ranks 38th
     innovative SMEs export
     their products?
     F-5. Are there programs to 3                                                 The Trade Commissioner Service of Canada’s
     facilitate foreign           The Trade Commissioner Service of              programs are not targeted at innovative SMEs but
     investment (inward and       Canada offers assistance to businesses         rather are available to all businesses
     outward) by innovative       who wish to invest and/or trade abroad.
     SMEs?                                                                       For more info, please see:
                                                                                 http://www.tradecommissioner.gc.ca/eng/home.jsp
     F-6 What is the level of     Simple tariff rate: 214 tariff lines, with a
     your trade barrier? What     simple average tariff rate of 5.0% (2009)
     is the simple and import-
22                                    Assessment Framework for the Daegu Initiative


                  weighted average tariff        Trade-weighted tariff rate: 5.2
                  rate for your economy?
                  What is the variance of the
                  tariff rate for your
                  economy? What is the
                  level of non-tariff barriers
                  for your economy?
                  F-7 What is the level of       - Canada’s Inward FDI in 2008 was
                  barriers for FDI for your      $44.712 billion
                  economy?                       - FDI Performance Canada attracted 3.2
                                                 per cent of the world’s FDI in 2008 and
                                                 accounted for 1.9 per cent of world GDP,
                                                 receiving a 2007 performance index of
                                                 1.855. Although this is impressive, Canada
                                                 is lagging behind the top global
                                                 performers. - Relative to its peer countries,
                                                 Canada gets a “C” grade in the most recent
                                                 period – i.e. Below Potential
                                                 - FDI Potential – Canada has been
                                                 classified as having a high FDI potential;
                                                 however, its performance has been below
                                                 potential.
4. Facilitating   F-8 How easy is it to            - Ranked 2 for starting a business
SME               establish and close a            - Ranked 4 for closing a business
restructuring     business in your economy?
                  F-9 Are there programs to  1
                  facilitate SME             There are no such programs
                  restructuring in your
                  economy?
5. Others         F-10 When formulating     1
                  and implementing          There are no such processes and
23                      Assessment Framework for the Daegu Initiative


     competition policy in your mechanisms
     economy, are there
     processes and
     mechanisms, which
     consider the problems
     faced by SMEs and
     innovative SMEs in
     particular?
     F-11 Did your economy       See Annex on macro indicators
     maintain a relatively
     stable macroeconomy?
     F-12 In the area of
     establishing a market      Too broad a category to answer correctly
     consistent economy, what
     other relevant measures
     are in place?
24                                      Assessment Framework for the Daegu Initiative



CHECKLIST FOR AREA G: DEVELOPING METHODOLOGIES FOR EFFECTIVELY MEASURING PROGRESS IN THE IMPLEMENTATION
OF INNOVATION PROGRAMS FOR SMES.
Element      Checklist Item                         Evaluation Criteria                             Comments
1.           G-1. Are there proper channel of       1
Customer-    consultation and communication         - There are no such channels
oriented     involving key actors from private
             SME sector in order to represent
evaluation   SME interest from the drafting
system       stage of SME legislation and
             policy?
             G-2. Are Regulatory Impact             1
             Assessments, involving key actors      There are no such programs
             from private SME sector in order
             to represent SME interest, applied
             to monitoring and assessing the
             impact of SME support measures?

2. SME       G-3. Are there SME-specific single     4                                               A fact-seeking online survey on the
policy       on-line portal which is dedicated      The Canada Business web portal provides         Canada Business website was
disclosure   to disseminating information on        information on government services,             completed in March 2010. In total, 601
and          SME policies and allows                programs and regulations relevant to existing   participants participated in the survey.
evaluation   interaction (request of information    and potential business                          The survey found that:
                                                                                                    - 77.8% of respondents were able to
system       and applications by SMEs)
                                                    Canada Business does not allow for direct       find all, most or some of the
             between SME administration and         application for permits or licenses.            information they were looking for;
             SMEs?                                                                                  - 83.7% planned to use the website
                                                                                                    again; and,
                                                                                                    - 76.9% would refer someone to the
                                                                                                    site.
             G-4 Are there statistics               -4                                              - The data is of a high quality and is
25                                   Assessment Framework for the Daegu Initiative


            measuring innovative SMEs’           - Statistics Canada measures the innovation       updated regularly which allows
            activities and performances, and        performance of manufacturers through a         policy makers to track progress.
            for evaluating SME innovation           survey. It also measures R&D
            policies?                               expenditures by firm size.
            G-5. Are there policy learning       1
            systems for SME innovation           There are no such systems
            policies based on the cycles of
            policy experimentation,
            evaluations, adaptations and
            reviews and how effective are
            those programs?

            G-6. Are there SME policy            1                                             The Minister of Industry has statutory
            implementation agencies, which is    There are no such institutions                responsibility for small business in
            the main body for SME strategy                                                     Canada but in practice, almost every
            and policy proposal, evaluation,                                                   federal departments has policies or
            implementation and reporting?                                                      programs aimed at SMEs.
3. SME      G-7. Are there international         1                                             -
policy      cooperation and benchmarking         There are no such programs
comparing   programs for SME innovation
            policies, which fosters learning
system      from good practices, and how
            effective are those programs?




4. SME      G-8.   Are there on-line/off-line    1                                             .
                                                 There are no such systems
26                               Assessment Framework for the Daegu Initiative


policy     policy proposal systems for SMEs,
proposal   and what are the number of
system     proposals and adaptations on an
           annual basis?
           G-9. Are there organized-and-     4
           independent SME associations and
           craft associations operating at   See D-3
           national level, which have
           capacity to conduct constructive
           and regular policy proposals on a
           wide range of SME policy issues,
           and what are their activities?

				
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