Time to execute on value propositions

“Read a book a month” was my modest resolution in January 2014. And as 2014 wrapped up, as I was cramming four books into the last week of December, the Canadian defence industry received its much anticipated “gift” from the government, the Value Proposition Guide.

The guide, which serves as the playbook for how prime contractors should deliver their best economic benefits to Canada, emphasizes the following criteria in evaluating value proposition (VP) submissions: impact on defence sector; Canadian supplier development; research and technology development; and impact on exports.

The “value proposition” portion of the Industrial and Technological Benefits (ITB) policy is essentially “the ITB transactions the bidder proposes to Canada at the time of bid.” VPs will be weighted and rated by the government, amounting to approximately 10 percent of bid evaluations going forward. Like Industrial Regional Benefits, ITB obligations still remain 100 percent of the contract value. ITBs will be applied to more procurements and there will be a higher level of penalties imposed for non-fulfillment, such as hold backs, liquidated damages and performance guarantees.

In short, prime contractors will win extra points in evaluations based on “creating high value benefits” to Canada, notably through technology development, helping Canadian companies export and committing “up front.” I applaud the government for these changes.

But what does this all mean? And what impact will this new guide have on Canadian technology? If this column is about “watching technology,” then what can we expect to see in 2015 and beyond?

As I started to think through the implications of the guide, I was transported through time to some of the global technology innovations of the past. Walter Isaacson’s new book on innovators tells the stories of the initial “sparks” of each major innovation that have led to the digital revolution that has changed our lives so dramatically. Stories of the impact that the global defence industry and government stimulation had in the invention of the computer, microchip, semiconductors, software programming, the Internet, the World Wide Web domain, GPS, and virtual reality/gaming are all evident. I am resolved to learn from those whom innovated before us around the world.

What technological advancements do we dream of making in Canada? And how can the Canadian defence industry serve as a catalyst in technology development?

We started OMX over three years ago and created this Vanguard column six months ago. OMX is about connecting technologies and tracking impact; this column is about reporting on some of the unique Canadian technologies that we find along the way. We have seen interesting technologies, met the leaders driving innovation and can see opportunities all around us to make significant leaps on many fronts. Leaps that have positive implications in defence first, but also in duel uses, across sectors, making lives easier and better around the world.

It is not too crazy to imagine what could be done. Larry Page, founder of Google, once said that the key to technology innovation is to just have a “healthy disregard for the impossible” and to “be silly about the goals you are setting.” I would like to resolve today and for 2015 – with this Value Proposition Guide as the initial framework – to think bigger for Canada.

According to the 2013 report by Tom Jenkins, Canada First: Leveraging Military Procurement, another $240 billion is anticipated to be spent in Canadian defence procurement before the year 2028, with 100 percent ITB obligations. This Value Proposition Guide, as I see it, is the blueprint for incentivizing investments in Canadian technology. It is undeniable that we have a huge opportunity in front of us as a country if defence spending comes through as planned (or even close to it) and companies execute on this guide.

But my favourite words of wisdom, again to quote Larry Page, are that “visions without execution are hallucinations.” In this year ahead, instead of resolving to continue reading about innovations globally, let’s execute.

 
Nicole Verkindt is the founder and president of OMX, and founded the Southern Ontario Defence Association. She was recently appointed to the Board of the Peter Munk School of Global Affairs.

Technology Watch is produced by OMX and focuses on innovative Canadian ideas and new technologies. Join our blog: theomx.wordpress.com, Tweet your comments and questions (@offsetmarket) or use #OMXcolumn and follow the conversation.

Author: Nicole Verkindt (from Feb/Mar 2015)

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