trefor.com

'Four meals from anarchy' beckons

Kelly Egan

The Ottawa Citizen

Wednesday, April 30, 2008

We live in an invincible age, save for those days when, as a modern society, we totally fall apart.

Amazing. One wonky old culvert on Highway 417 has managed to disrupt the lives of roughly 30,000 motorists for a couple of days, with untold inconvenience and delay.

On the same day, there is panic buying of gasoline in Scotland due to a strike at a refinery and the closing of a North Sea pipeline. So-called rice fever has led to hoarding, lineups and panic in countries around the world, with even Wal-Mart taken to rationing in some locales. The basics -- flour, corn, grains -- are spiking.

And every time you fill up at the pumps, well, there is fresh fuel for the fire, isn't there?

How can you not be a little edgy? Gas, food, essential transportation. Is it all hanging by a rusty thread?

We await the triple whammy: Being detoured from the highway because it's falling apart, running out of gas on the way to the store, which has no food.

Trefor Munn-Venn is the associate director of national security and safety for the Conference Board of Canada.

He recalls a maxim that was making the rounds at MI-5, the British intelligence agency, a few years ago: "Four meals away from anarchy."

It is a reference to the time it would take -- a little more than a day -- before the effects of food shortages would be felt, possibly leading to widespread looting, disorder and panic.

It is not make-believe.

In September 2005, there was a trucker protest in New Brunswick that lasted several days. As the rigs sat parked, the impact was immediate. Stores began to run out of fresh produce, liquor stores out of liquor.

Mr. Munn-Venn points to the "just-in-time" supply system that is used in many industrialized countries around the world. Large retail outlets do not stockpile massive quantities of food on the premises. Instead, they rely on a steady flow of goods, via trucks, to keep products fresh and storage at a minimum. In the New Brunswick example, he said it was difficult to quickly switch the delivery method to rail, or onto secondary roads not built for large trucks.

"It highlighted the vulnerability that comes with a highly efficient, just-in-time delivery system. They started to feel the impact of that in a matter of hours in the grocery stores."

There are 320 culverts on 417 between Ottawa and the Quebec border. What happens if five or 10 culverts need replacing at once?

What if culverts on 417 west, or 416, need replacing at the same time? It isn't difficult to imagine our entire freeway system crippled.

Mr. Munn-Venn underlined the important linkage between security and commerce in our highway systems. The full name of the American interstate system, he reminds us, is the Dwight D. Eisenhower National System of Interstate and Defense Highways.

"It's not just a road system. It was designed in response to a security threat, a Cold War security threat. The notion was, if the Russians land on one coast, how do we move our armies really fast?"

The culvert is merely a symptom. It is well established that, nationally, our infrastructure is in some difficulty.

In Ottawa alone, officials estimate infrastructure, mainly roads and sewers, needs $1 billion in upgrades.

Across the country, meanwhile, the Federation of Canadian Municipalities is estimating that our towns and cities are looking at a $123-billion repair job on our water-treatment plants, roads and public infrastructure.

Much of it, says a commissioned report, has not been upgraded in 30 or 40 years. Mr. Munn-Venn says the conference board found, after consulting public and private-sector leaders, that the greatest threat to security and safety in Canada is a clear idea of governance.

In other words, who is leading the response, who does it partner with and how does it communicate its plans?

The response should reach across the usual players -- police, firefighters, paramedics -- to include industry, non-profit groups, the general public, he said.

"You can't always stop the bad thing from happening,'' Mr. Munn-Venn says. ''You won't always stop a bridge from collapsing, or a hurricane from coming. The issue, then, is how quickly can you bounce back?"

The contrast there, he said, is New Orleans and London. While the American city may never fully recover from Hurricane Katrina, the British capital has bounced back from the terror strike on its transit system. "People were riding the tube the next day."

Mr. Munn-Venn credits the City of Ottawa for doing excellent work in terms of emergency preparedness, which it had to deal with in spades after the Ice Storm of 1998.

It is worth pondering, he agreed, what would happen if our usual supplies of food suddenly evaporated.

"We need to keep asking ourselves big questions like that because we don't know what we're going to face."

Indeed. Just one more big bump in the road.

Contact Kelly Egan at 613-726-5896 or by e-mail, [email protected]

© The Ottawa Citizen 2008

New Publication on Transforming Health & Safety Culture

Sure, national security, counter-terrorism and emergency management are hot topics, but if you want to save lives and reduce injuries, health and safety is where you can make a big difference.

Bjorn Rutten and I have just published a new report called Workforce Renewal: New Opportunities to Transform Health and Safety Culture. This report looks at what CEOs and presidents can do to make changes to their health and safety culture in the midst of a major transformation of their workforce.

Many organizations are finding that they have a staff comprised of four different generational groups -- Traditionalists, Baby Boomers, Generation X, and Generation Y -- and each group brings with them different perspectives, values and practices. As a result, building or strengthening a health and safety culture has become more complex. The following is a brief summary of the main suggestions made.

• Develop a clear and nuanced understanding of health and safety issues.
• Model the behaviour you want to see in others.
• Fully integrate health and safety into every aspect of work and make it non-negotiable.
• Create an environment of trust to motivate employees to take ownership of health and safety.
• Demonstrate and demand accountability.
• Engage your "silver liners" in knowledge transfer and training activities for new employees.
• Use succession planning and develop the next generation of health and safety champions.
• Tailor your health and safety message to the expectations of your (demographic) audience.

To get a copy of this report, search for it at www.e-Library.ca after filling in the profile. There is no charge to search this library at The Conference Board of Canada.

Speaking to the African Union

I was asked by the Department of Foreign Affairs if I would be willing to speak at the African Centre for the Research and Study of Terrorism in Algiers, Algeria on how to identify and effectively secure critical infrastructure. This African Union initiative brought together senior leaders from the intelligence, military, and law enforcement communities of 53 African nations. This was my first trip to Africa and it was great. There are some extremely dedicated inviduals working to fight terrorism there.

Speaking to the OSCE in Vienna

The Organization for Security and Co-operation in Europe (OSCE) invited me to speak on behalf of the Conference Board on the topic of building effective public-private partnerships to combat terrorism.

This meeting was held in Vienna, Austria in the spring of 2007 and included representation from most European nations. My presentation focused on providing perspectives and case studies that focused on the fundamental principles that underlie effective public-private partnerships.

Speaking at the G8 in Moscow

In December 2006, I was asked to speak at the G8 in Russia on establishing effective governance for public-private partnerships designed to counter terrorism.

This was a major event and Canada played a lead role in the development of the recommendations and declarations that emerged from this forum.

Based on the discussions in Russia, it's become clear that the work we are doing in Canada, and the issues that Canadian organizations are facing as it relates to governance in national security and public safety, are not unique. These are common issues that nations around the world are working to address.

Going broke for biotech

It's hailed as Canada's future, but companies say they aren't getting the cash they need

By Steve Arnold
The Hamilton Spectator

(Jan 16, 2006)

If money is the lifebloold of business, Canada's biotech industry desperately needs a transfustion.

That conclusion, reached last year by the Conference Board of Canada, came as no surprise for Hamilton businessmen Hugh Hoogendoorn and Dan Meyer. For them, the search for cash to finance growth is as unending as a squirrel's hunt for nuts.

"We have $2.5 million in sales now and we could easily grow that to $10 million," said Hoogendoorn, co-founder and president of Ancaster-based Affinity Biologicals. "If our growth is to continue, we need new money and the ways of getting that are getting fewer and less attractive."

Meyer, whose Adjuvant Informatics Corporation recently made the move from his basement to a shining new office in the city's technology incubator, shares that constant worry.

"I ate a lot of Kraft Dinner when we were starting out," he said. "I think this will be our train to wealth, but right now it's just pulling out of the station, it isn't really rolling yet."

Hoogendoorn and Meyer's companies are examples of what governments at all levels hope is the future of Canada's economy -- jobs based on brains rather than muscles and smokestacks.

The field has been marked since 2001 by Hamilton's economic development department as a key sector for future growth. Experts warn, however, that Canada's chances in the industry are being hampered by a continued lack of financial backers.

Studies earlier this year by the Conference Board of Canada and Statistics Canada pointed to the size of the problem.

"Canada is not well-positioned for the future," the Conference Board reported in a recent study. "Our commercialization record has been weak; we lack focus at the national level; we have a limited ability to harness risk capital; we have a shortage of critical, highly skilled talent; and our slow regulatory approvals process may be limiting the success of our biotechnology firms.

"While a number of Canadian companies have been able to raise cash successfully, earlier-stage and smaller public companies are in a precarious position even more so than during the market decline of 2002."

The Statistics Canada study noted that of 490 biotech companies surveyed in 2003, 254 had tried to raise capital and only 178 found it, with just over half of those firms hitting their targets. The firms raised $1.7 billion. That was down sharply from 1999 when 149 companies sought money and 119 raised it, gathering $2.1 billion.

Some of the problem, said Dorothy Redfearn of the city's economic development department, is simply the nature of the biotech business where, "It takes a long time for a product to get to market so funding is difficult to attract sometimes."

Darlene Homonko, executive director of the Golden Horseshoe Biosciences Network, added there's a reluctance today to back risky ventures -- a fallout from the bursting of the high-tech bubble.

"We haven't had a lot of success stories yet that give investors much confidence," she said. "Investors are coming to deals a lot later that they used to and that's making it difficult for early stage technology to spin out and make a go of it."

Trefor Munn-Venn, author of the Conference Board report, added another problem may be this country's failure to choose a specific area of development.

"It's a matter of us saying do we want to be everything to everybody?" he said. "At some point we have to decide if there are areas where Canada has scientific and market strengths."

For Affinity Biologicals, those factors may translate into some tough choices.

Founded more than a decade ago, the company employs 22 people and produces 225 products for blood research.

"We started in our basement and it was many years before we saw any personal money from this because everything we made was reinvested in equipment," Hoogendoorn said. "This was very much a hobby for the first six years."

By 1995, the fledgling company had moved to Hamilton where Hoogendoorn wrote his first business plan and took out a bank loan to buy equipment. Last year, with a bank mortgage, he bought a site in the city's Ancaster industrial park and took on more bank debt to buy more equipment, including a custom-made freezer needed to meet American import rules.

"Meeting those standards is very expensive and creates tremendous overhead," Hoogendoorn said. "We had to take on a lot of people who aren't revenue generators. We've taken on a lot of debt for the sake of building the infrastructure we need to take the next step."

Aside from banks, money can be found with angel investors and the public markets. Either of those choices, Hoogendoorn said, means giving up some control of the company.

"Angels usually have some pretty firm rules about their exit strategies and how much control they want, while the financial markets are too caught up in whatever's sexy today," he said. "We really need some way of assisting companies like ours without giving up equity in the business."

Dan Meyer, of Adjuvant, has a partial solution. He's financing the new firm with cash from an existing business called Med-Tel Software Ltd. Started in 1997, the company handles the critical billing function for doctors, collecting upfront and monthly fees. Meyer started that firm by cashing in stock options from his former employer, taking the business from his laundry room to a spare bedroom and finally to a basement office in Hamilton.

Med-Tel has 1,000 clients today, but by 2001 Meyer said it was clear the company's growth was going to be stunted by competition and a lack of motivation for doctors to switch providers. That started the search for a business with better long-term prospects.

Meyer's friend James Paul, a Hamilton anesthetist, suggested they look at the field of pain management.

The problem was a thorny one -- balancing the effects of the cocktail of drugs patients get to control pain as they emerge from surgery. What was needed was a database, accessible from the bedside, to help make decisions and record the tools being used.

Adjuvant Informatics Corp. was born in 2001. Its product, the APS Manager (for acute pain service) not only captures and analyzes patient drug orders, doctor visits and critical incidents, it also allows information to be saved in a searchable database. It was installed in Hamilton Health Sciences hospitals in 2002 and has since been picked up by Toronto General and Sunnybrook as well as hospitals in Australia and Norway. Others in Israel, Central America, the United States and Germany are studying it.

"It's getting a lot of attention," Meyer said. "It seems like we're onto something here."

As well as the cash flow from Med-Tel, the federal research tax credits have also been important growth tools, along with space in the city's technology incubator, a loan from the Business Development Bank and a grant from the National Research Council.

So far, Meyer estimated, Adjuvant has chewed up $400,000 in capital "with no real revenue stream yet.

"Clients are just starting to trickle in. Our goal is to become the standard, like Windows, and we have a chance of doing that, but there's also a real potential of not making our goals," he said, adding the company is talking to angel investors, banks and other sources.

"With $1 million we could finance a very aggressive assault on the U.S. market," he said. "Until then, we have to be very tactical in how we market."

T.

Canada lacks focus in biotechnology: report

By Kristin Goff

Canada needs to develop a more focused biotechnology strategy, developing areas of excellence, to succeed in the competitive global market, according to the Conference Board of Canada.

"The past performance of Canada's biotechnology researchers and businesses is no guarantee of future success," Trefor Munn-Venn warns in a report Biotechnology in Canada.

"We lack focus at the national level; our commercialization record is weak; we have limited ability to harness cpaital; and we have a critical shortage of skilled talent," he said in the report released to coincide with the opening of the BioNorth 2005 conference in Ottawa yesterday.

In an interview later, Mr. Munn-Venn said Canada now stands at a key juncture, having developed a substantial pool of about 500 biotechnology companies, most of which are still not at the commercial stage. Just 10 of those companies represent about 70 per cent of the industry's market capitalization.

In a field where product development can take years, a study by Ernst & Young indicates that 38 per cent of publicly traded biotechnology companies have less than one year's worth of cash available, and that situation appears to be growing worse, said Mr. Munn-Venn.

For the industry to thrive, Canada will have to make its place in global markets as more companies move to the commercial phase.

"When we go to market in Canada the question is, 'Where are we going to dominate in the global supply chains?'" he said. "Our view is we should do it by design, rather than by accident."

Other countries have already adopted a strategic approach to biotechnology development, he said. For example, Britain has set a goal of becoming the best place in the world to conduct clinical trials. In India, two-thirds of all biotechnology investment is directed at the health sector. The U.S. is focusing the lion's share of its government funding on vaccines and other medical measures to counter bio-weapons.

The Conference Board looked at how Canada stacked up against several other countries in areas where its modest investments are now scattered. Those include biotechnology developments in agriculture, health, environment, food processing, aquaculture, bio-informatics and natural resources.

Canada appears to have some advantage or relative strength in food processing, environment and aquaculture-related research or commercial developments, according to teh report. But its authors didn't recommend any specific areas for Canada's biotechnology industry to emphasize.

"No single party should make the choices," said Mr. Munn-Venn. Strategy should be set, he says, through a detailed discussion and review by leaders in government, industry and academics and potential consumers. He warned they need to act quickly because the global market is evolving so fast.

"The fundamental issue is -- everyone recognizes that it is risky to make choices like that. But it is extremely risky not to make choices at all."

T.

(The Ottawa Citizen, Ottawa, Ontario, 29 Nov 2005, F3, Circulation 140,158)

Trefor sits on the Opening Panel of BioNorth 2005

BioNorth is one of the largest biotechnology industry events held in Canada (www.bionorth.ca). It is hosted by the Ottawa Life Sciences Council.

This year, I was asked to sit on the Opening Panel with luminaries including Arthur Carty (the National Science Advisor to the Prime Minister), David Fransen (Assistant Deputy Minister of Industry Canada) and Roman Szumski (Vice President of Life Sciences for the National Research Council).

My message was focused on taking a strategic view of biotechnology for Canada and having a constructive debate about where Canada can actually become "global best".

T.

Canada's Biotechnology Industry

TAPED - CBC Radio 1 (Toronto) - 29 September 2005 - 7:20 AM - 8:10 minutes

CBC Radio 1: Biotechnology, it’s a sector that recognizes no national borders. And Canada needs to realize that if we want a piece of the action and this still small but rapidly increasing industry. Trefor Munn-Venn is principal research associate with the Conference Board of Canada. He’s just released a report on Canada’s current record in fostering biotechnology. Good morning.*

TREFOR MUNN-VENN (principal associate-researcher, Conference Board of Canada): Good morning Robin.*

CBC Radio 1: How are you this morning?*

MUNN-VENN: Great, thanks.*

CBC Radio 1: Good. Ah, well world leaders seem to be pinning a lot of hopes on biotechnology. I’m trying to get a sense of exactly what we’re talking about. What difference would biotechnology make, in say, a given area?*

MUNN-VENN: Well this is, this is the hot question. I think people are really trying to wrap their arms around where biotech can really make a difference. And maybe the best analogy is actually the kind of difference we’ve seen from the Internet. Fifteen years ago, no one had heard of it, today we all have email and we’re all online all the time, using our mobile phones, and our BlackBerries. And what we called E-business a few years ago, is just business today. Biotech is poised to have the same kind of effect. So we can see the governments are betting heavily, as you mentioned, because they see biotechnology as a, as a new source of growth. They see it as a mechanism that’s going to create new companies, that’s going to create new employment, that’s going to attract new investment. Because they, they, they see it as a, as a way to for example, address health care costs that are rising in countries where, you know, you’re got a demographic that cued toward an aging population. And Canada’s included in that area. So there are some who say “Well, Canada we have a large trade deficit as it relates to health care costs today. Wouldn’t it be interested, and isn’t there a great opportunity to use biotechnology to see if we can reduce that trade, that trade deficit and turn it into a trade surplus?”*

CBC Radio 1: So how would biotechnology do that, say, if we stick with the health care sector, for example?*

MUNN-VENN: Sure. I mean in some ways there are whole theories of new diagnosis methods that are, that are emerging, as well as new treatments that are tackling major diseases. And so we can see it being applied to areas of uh, of uh... anaemia, diabetes, and you know, as well as treating HIV/AIDS. You know, in other areas we can see how biotechnology can hold promise in terms of addressing shortages of food and water that people are anticipating. You know, there’s an expectation that the global population is going to grow to about 9 billion by 2050, so with that comes real concerns about you know “Gee, do we have enough food to feed that kind of population? Do we have enough clean water to actually make sure that, you know, that we can sustain that, that level of population globally?”*

CBC Radio 1: Now in reading your report, you seem to be saying that the government business sector and academic sector have done a respectable enough job to day, but the stakes are going up globally, and we’re facing some real challenges if we want to stay competitive.*

MUNN-VENN: Absolutely. You know, Canada actually has done a, done a great job. And when we go back through time we can see lots of breakthroughs in biotechnology that have come from Canada, or from Canadian scientists. And we’ve seen investments in the past that have been quite respectable, but in many ways the game is changing now as this greater recognition occurs that this is that new, that new springboard for growth for, for countries. We see the investments, uh, we see the investments growing, and now we start to say “Well, how, how well positioned is Canada to compete in, in that kind of context?” And that’s where we start to get a little bit more concerned. So while we’re quite proud of heritage, we’re, we’re a little concerned about our, our future in this respect. So if we look at it from a, from a corporate perspective to start, you know Canada only has about 500 biotech companies, and the vast majority of them, you know maybe about half of them, are, are really quite small, usually just a few people with, with a promising idea. And these are important, and we need them. But they don’t have tangible revenues yet. They’re not making major contributions yet on the business side, and you know in many ways they have a, they have a bit of a tenuous future. You know, about ten companies, ten of those 500 companies account for 70 per cent of the market capitalization of all of our biotech activities.*

CBC RADIO 1: And what’s happening in other countries? How are their businesses set up?*

MUNN-VENN: It really varies from country to country. I mean, we’re always quick to compare ourselves to the United-States, and you know, they’ve got about, about three times the number of companies that we have. But their, their sales are just through the roof. You know, where Canada has sales maybe around 3 or 4 billion dollars, uhm, the US (inaudible) over $60 billion in, in revenue. And maybe the most useful way is, is to think about it from a market-capitalization perspective. Again, so in Canada, the public value of our biotech companies is about $18 billion. It’s about the same in the UK, but in the US it’s about $400 billion, it’s just so much larger, the scale is enormous.*

CBC RADIO 1: What about access to skilled workers, who have to be, uh, key component to this equation, I would think?*

MUNN-VENN: Yeah, I would say this is perhaps one of the most important areas that, that Canada has to deal with, but it’s also one of the most important areas that all countries are, are trying to deal with. And there are really two areas: first is biotech requires very serious scientific capabilities. This is deep science, this is complicated science, this is world-leading breakthrough science. So we need the talent to do the R&D in Canada that’s going to develop those ideas, and then help take those to market to transform those ideas into new products and services. But we also need that talent in order to reach out into the world. We know the science is complex, so no individual, no company, no country will ever have a monopoly on the knowledge as it relates to biotechnology. So it’s absolutely essential that Canada have the people who can reach out into that global knowledge pool , that can tap into the best minds, the best labs, and the best companies in order to bring ideas home as well in order to transform those.*

CBC RADIO 1: And once you’ve got the people, you need state-of-the-art facilities in order to house them and let them work. Do we have that? And there, uh, globally are there any people on the cutting edge of this?*

MUNN-VENN: Uhm, we do, we do have some. I, I think our concern is maybe it’s a little bit sprinkled across the country. And perhaps a good comparison would be Singapore. Uhm, one of the things that’s very exciting to other countries about biotechnology is that it’s not... you don’t require extensive natural resources in order to be a major player. This is a, this is a talent game. For countries like Singapore, and Japan, and South Korea, this is a real opportunity for them. So in Singapore they’ve established something called Biopolis, which is a bit futuristic sounding, but it’s a, it’s an exciting idea where they have built an enormous state-of-the-art facility to attract the world’s best scientists and best companies to come and locate in Singapore in order to develop their, that industry in those capabilities. And when they launched Biopolis, they made it absolutely clear that biotechnology represents the future of the economy for Singapore. So they’re betting heavily, and you know, one of the challenges for the researchers, for the scientists is: because the science is so complex they do require state-of-the-art facilities and equipment, and if they’re not constantly being updated and upgraded, then they’re going to look for opportunities where they can pursue their science in a context where those things are in place.*

CBC RADIO 1: What reaction have you had to your report so far?*

MUNN-VENN: Our sense is we’ve, we’ve nailed it here in terms of capturing the picture of where Canada is today, which was really our goal because a lot of the discussion around biotechnology has been centred around the promises and the hyperbole and the hype, and it makes it very difficult to make investment decisions, to make, to make business decision, and to make policy decisions unless the facts are clear. So we think this has been quite successful from that perspective.*

CBC RADIO 1: Thanks a lot.*

MUNN-VENN: My pleasure Robin, thanks.*

CBC RADIO 1: Bye now.*

MUNN-VENN: Bye.*

CBC RADIO 1: Trefor Munn-Venn is principal associate-researcher with the Conference Board of Canada.*

T.