Leveraging government funding in a cash-strapped economy
Alexandra Barlow / October 10, 2012
Chances are if you work as an Economic Development Officer (EDO), you have an Economic Development Strategy. A roadmap for economic developers, there are few communities with a dedicated staff person for economic development who do not have a strategy guiding their activities (if you are plan-less, can I suggest you start working on one?).
Most economic plans are not drastically different in their action plans; the problems facing most of us in this field are fairly consistent across the continent. Often somewhere in these plans, there is a recommendation to the effect of help our local businesses leverage government funding; usually outlining how the EDO will work to disseminate information regarding funding programs for businesses. If you follow both parts of the old addage “plan the work, work the plan” then your local businesses may be aware of these programs through an email blast, announcement or other tool you like to use to get in touch. Unfortunately, awareness is only half the equation.
Economic developers then need to go a step further by picking up the phone and calling the funder to finding out more – does the fund have money, what specifically does it want to help with, what kind of information is required, when is the funding being released, or is it already exhausted. Most of the grants and loans based funding is allocated in late March, when government’s announce their annual budgets. Larger trends have emerged in the past four years in fund delivery. For example, governments are focused on bridging the gap between University Research and Industry Commercialization, and as a result a large amount of funding has been allocated to these types of partnerships. In 2012, the Canadian Government allocated $37M for Industry-Academic Partnerships in Research through NSERC, SSHRC and CIHR. FedDev Ontario has $75M over 4 years for similar industry-academic collaborations that bring game-changing technology to market. There is a renewed focus on Science, Technology, Engineering and Mathematics graduates (STEM) and a number of hiring incentives offer employers $10,000 grants for a new employee’s salary if they have graduated from such a program and are working in their field. For the manufacturing industry, grants based funding is largely delivered through industry associations such as the Canadian Manufacturers and Exporters or the Yves Landry Foundation. These are just a sampling of the trends and recent developments in funding programs that exist for businesses in Canada.
EDOs need to be aware of these announcements and trends to understand how the funding is allocated – via which agency, not-for-profit, or government ministry. Once we know where, the question is when is the funding released. Many businesses make the mistake in thinking that the funds are exhausted, so no point applying. However, many programs operate with a wait list in which your application can sit until more funding is released, and then you are first in line. This is why most funds are exhausted within 2 weeks of their release, in part because of a long cue that was awaiting the funding.
In Canada, the Provincial and Federal governments have a number of mechanisms through which to offer support to business, such as tax credits, the traditional grants based funding, low or 0% interest loans, or hiring incentives in the form of salary supplements. The large number of programs and the government’s preference for using third party delivery is confusing and can easily overwhelm businesses. Add in bureaucratic jargon, varying requirements, unclear fund release dates and the result is a maze… with booby traps. Some of these applications are lengthy, running upwards of 20 pages. They can take businesses 100+ hours to complete, sometimes to only fail as a result of small mistakes or a misunderstanding of the overall goal of the program. These types of failures often result in a disinterest in further pursuing government funding, meaning businesses leverage their activities with debt or through general cashflows, or do not undertake these improvements at all. Other businesses may not even be able to identify their much needed strategic initiatives that will help them address the key issues that are preventing them from enhancing productivity, growing revenue and increasing employment…. and that’s a whole other article.
Businesses are too busy doing business to get this information and successfully leverage funding. A good EDO might have the same excuse. A number of tools and government funding experts exist to assist communities and companies in better leveraging government support for their hiring, training, expansion, export growth, and research and development initiatives. Right now, there are a number of funds targeting these key business activities. How will you help businesses in your community leverage them better?