Summary of Regional Economic Growth through Innovation - National Evaluation

The evaluation examined the relevance, performance and efficiency of the Regional Economic Growth through Innovation (REGI) program, delivered by the 7 regional development agencies (RDAs) during the 5-year period from April 1, 2018 to March 31, 2023. The scope of the evaluation includes 2 program streams under REGI: the Business Scale-up and Productivity (BSP) stream and the Regional Innovation Ecosystems (RIE) stream.

The evaluation used a mixed-methods approach, where data were collected from a range of sources to ensure multiple lines of evidence when analyzing data and formulating findings. The study sought to answer the following 3 questions:

1. To what extent has REGI met the needs of Canadian businesses and communities?
2. To what extent has REGI benefited Canadian businesses and communities?
3. To what extent is the REGI delivery model efficient?

Results

Overall, the REGI program continues to be relevant and meets the needs of Canadian businesses and communities. It contributes to business growth, ecosystem advancement and economic development in all regions. It is also mostly efficient. The evaluation of the program has demonstrated that REGI is:

Highly successful in its reach, investments, leveraging and job creation.

• Exceeding 5-year investment targets in 2 streams of programming by 200% and 300%, delivering $3.06 billion in approved funding to 3,681 unique clients across Canada.
• Achieving high leveraging ratios of $3.23 to $1.00 for BSP and $1.49 to $1.00 for RIE, which exceed 5-year targets.
• Reporting jobs created or maintained, with 46,000 jobs counted under BSP and over 75,000 jobs counted under RIE. However, some uncertainty exists regarding the reliability of the reported metric. There is an opportunity for the RDAs to revisit performance metrics for this outcome.

Highly successful in driving growth and scale-up, with BSP businesses outperforming non-client firms with similar characteristics.

• For BSP clients, REGI program participation is associated with better outcomes across all economic performance metrics studied by Statistics Canada. For example, revenue growth rates are 18.3% higher than non-clients, employment growth rates are 12.8% higher, and export growth rates are 13.5% higher.

A key component to expanding and developing regional innovation ecosystems.

• RIE recipients have engaged new partners, participated in partner collaborations and developed, expanded or maintained programs and services through increased networks and hiring. All RDAs target different priority sectors within their geographic area that hold significant economic interests.

Aligned to priorities of inclusiveness and green/clean technologies, contributing to advancing these key areas.

• Investing in Equity, Diversity and Inclusion (EDI) and green/clean growth priority areas, with approximately 18% of the overall G&C approved funding envelope delivered to organizations that were led, owned or majority-owned by a representative of an under-represented group and approximately 23% of approved funding supporting green/clean growth projects.
• RDAs assess environmental impact as part of the project selection.
• Both BSP and RIE clients (~40% of those participating in the survey) reported hiring staff from under-represented groups as a result of their REGI project, with youth under the age of 40, women and newcomers emerging as the most-often hired groups.
• There are opportunities to support diverse clients more effectively as well as capture disaggregated data.

Addressing the top barriers to growth for innovation-oriented companies.

• The evaluation found a strong need for REGI funding to help offset the major barriers of access to labour, access to financing and the high cost of conducting business faced by companies in Canada. REGI is meeting the needs of businesses and communities. The program’s flexibility has allowed RDAs to customize their approach in delivering the program to optimize delivery and maximize its benefits in the regions.

Operating in a niche space.

• The program does not overlap with other programs. REGI is complementary to the various federal and provincial/ territorial-level programs operating in this space. Other programs target different beneficiaries, varying sizes of projects, deliver different types of funding supports (e.g., not G&Cs), or have narrower definitions of innovation. Overall, there is a continued need for the REGI program in all regions as the program is strongly aligned to local business needs.
• REGI is a key source of funding for ecosystem organizations as there are not many other funders and many rely on REGI funding for the delivery of most of their programming. Without REGI, projects in the BSP or RIE stream are at risk of not proceeding in the same manner or at all.

Achieving high levels of satisfaction.

• The evaluation found the program design of a national program with regional adaptations to be efficient and appropriate. Clients are satisfied with most features of delivery but have identified opportunities for improvement in streamlining and clarifying the application process, increasing the timeliness of approvals, and increasing the length of funding agreements. RIE survey respondents identified required improvements to program guidelines (e.g., criteria), submission deadlines, and delays in decisions and receiving funding. A key area for clients was seeing improved referral support.

Meeting the needs of clients through regional tailoring.

• Place-based regional development has been highlighted by the Organisation for Economic Co-operation and Development (OECD) as critical and necessary to increase national economic performance.
• All stakeholders consulted for the evaluation agreed that REGI’s ability to tailor the program design and delivery to better meet the needs of clients in the regions is a critical program element.

Recommendations

Based on the findings described in this report, the following recommendations are made.

Recommendation 1: Improve inclusivity through the adoption of best practices, proactive approaches and ongoing gender-based analysis Plus (GBA Plus) analysis.

It is recommended that all RDAs continue to increase capabilities to address inclusivity and:

• adopt best practices in improving inclusivity, including the sharing of tools, strategies and training materials across agencies to amplify this work;
• increase the uniformity by which RDAs track and report on EDI under REGI; and
  
• implement ongoing analysis of program performance using a GBA Plus lens.

Recommendation 2: Continue to improve quality and consistency of performance information.

It is recommended that all RDAs work to review the performance measurement strategy, particularly to:

• increase the consistency and comparability of national performance information through clarification of indicators and related definitions; and
• revisit performance indicators to ensure they continue to be relevant and appropriate, and that the best methodology is used for the measurement of progress against outcomes.

Recommendation 3: Improve efficiency of application, approval and referral processes and ensure program design aligns with needs.

It is recommended that each RDA review design and delivery features to ensure best fit for their respective regions and portfolios of clients and projects. Importantly:

• review options for increasing the efficiency of application and approval processes;
• review place-based design features to maximize responsiveness to client needs; and
• review the processes surrounding how referral services are being provided to facilitate seamless service to Canadian SMEs.

A Management Response and Action Plan is included in the full report.