SOSCIP & IBM Allen Lalonde,

Senior Executive, IBM Canada R&D Centrealalonde@ca.ibm.com

June 24, 2015OCE-SOSCIP Networking Forum

IBM Confidential

IBM Canada At-a-Glance

Established in 1917

$500M+ in R&D in 2014

Major Market S&D Country: Bromont & Markham volumes

– $1.8B in imports in 2014 / $1.4B in exports in 2014

Ranked #1 Best Corporate Citizen by Corporate Knights’ in 2010

Ranked Top-5 Most Attractive Employer in Canada by Randstad in 2011 / 2012 / 2013 / 2014

Certified PAR Gold for Progressive Aboriginal Relations by the Canadian Council for Aboriginal Relations for past 5-years

110,000+ hours pledged by IBM Canada Employees for Charity annually

$500M new investments since 2012, including R&D Cloud Computing Centre

Canada is home to IBM’s 2nd largest Software Development Organization

– Toronto / Ottawa (Cognos) SW Labs largest locations

– 10 additional Satellite Labs including Montreal and Victoria

World-class high-tech manufacturing, Bromont, Que.

National business and technology consulting expertise

– Pacific Development Centre, Burnaby– Customer Solution Centre, Markham

The Idea: Stimulate Innovation in Canada

“Productivity growth in Canada has ranged from disappointing to dismal. Since 2001, Canada’s productivity growth has slowed to historically low rates……

… with Canadian workers having only about half as much M&E and ICT capital stock to work with as their U.S. counterparts.

… and with a widening competitiveness gap, low interest rates, strong balance sheets and increasing labour scarcity on the horizon, the imperative for Canadian businesses to invest has rarely been more compelling.”

“Innovation is the ability to turn knowledge into new and improved goods and services….. Canada remains a below average performer on its capacity to innovate

...Canadian companies are rarely at the leading edge of new technology and too often find themselves a generation or more behind” Conference Board of Canada: How Canada Performs, Sept 2012

Speech by Senior Deputy Governor 10/04/12

1. Silos in skills development Canada is not producing enough graduates with the needed skills for its economy. Must improve links between education and employment.

2. Access to capitalOne of the most critical determinants of competiveness is access to capital particularly for companies moving from innovation to commercialization.

3. Insufficient innovation rate Investment in disruptive technologies and innovation policy framework not sufficient enough to overcome barriers in manufacturing sector.

4. Internal barriers to trade Lack of single domestic market in Canada is a serious and self-imposed weakness. Need to address tariff barriers between provinces and promote free internal trade.

5. Trade constrained by infrastructure deficiencies Public investment in infrastructure has not kept up with economic needs to support prosperity. An ongoing commitment by all levels of government required to create a more competitive, modern public infrastructure.

6. Tax complexity and infrastructureCanada’s tax code is also overly complex and over relies on income and profit tax rather than consumption tax.

7. Missing foreign trade opportunitiesCanadian businesses not globalizing as quickly as peers which requires renewed focus on high-quality trade agreements and strengthen Canada’s system of trade promotion and economic diplomacy.

8. Territorial businesses lack required tools To fully leverage economic potential of Canada’s territories and drive financial independence, need to decide whether or not to provide territorial businesses with tools needed to drive financial independence.

9. Uncompetitive in world tourism sector Considered a high-cost, high hassle destination with aging attractions infrastructure and inadequate marketing.

10. Lack of clarity regarding duty to consult Aboriginal peoplesProject developers have no clear direction on the extent of consultation and accommodation required.

Canadian Chamber of Commerce – Top 10 Barriers to Competitiveness

IBM Canada Innovation Ecosystem: Cycle of Innovation

Commercialization

Research

University Research

Government Funds & Programs

IBM & Industry Partners

Incubators/SMEs

Intellectual Property Mgmt.

GAP

IBM Canada Innovation Ecosystem: Collaborative Innovation Centres (CIC)

• 1990: First IBM Centre for Advanced Studies (CAS) in the IBM Toronto Lab

• 2000 - 2008 : Locations established across Canada:

CAS Alberta, CAS Atlantic & CAS Academic Partnerships in Ottawa

• 2012 to Present: Established Canadian Research and Development Centre and several CICs

• Supports Canadian innovation agenda

University

Students get world class analytics education/ job experience Gain access to world class research/ education platforms Improve Tech transfer and commercialization Gain /improve research reputation

Industry (IBM & Partners)

Influence and drive revenue Enhance brand recognition Access world class talent/research resources Apply technology to real world challenges Accelerate industry specific R&D Drive competitive advantage & IP

CIC

Government

Develop regional skills Invest in specific priority industries Improve desired capabilities Position Cdn companies to compete globally Gain external & global market recognition

1. Bolster skills and economic growth for IBM and Canada through ground-breaking collaborative research models focused on important aspects of Canadian society/economics

2. Provide researchers with support and access to unique IBM and other open Computing Infrastructure and Resources to expand and accelerate research scope and outcomes

3. Accelerate commercialization of “Made in Canada” new products and services, leveraging small-med sized businesses and industry partnerships

4. Incent Federal, Provincial and Partner funding aligned with IBM Research and Development priorities such as CAMSS, Healthcare and Natural Resources, effectively attracting more IBM Research to Canada

IBM Canada Innovation Ecosystem: CRDC exemplifies CIC Model at it’s best

The Canadian Research and Development Centre is addressing Canadian challenges and driving IBM Strategy and Results …

IBM Canada Innovation Ecosystem: Building Canada’s “Innovation Engine” one collaboration at a time

MiQro Innovation Collaboration Center• IBM & Sherbrooke U., Dalsa & Bromont Microelectronics R&D + commercialization• $218M investment (Fed & Quebec)EXISTING

2.0NEW

(Over $100M in

Gov’t Investment)

Ctr. for Health Informatics, Analytics (CHIA)• IBM & Memorial University• Health Solutions, Big Data Analytics (incl. SPOR)• $30M in IBM investment

Southern Ontario Smart Computing Innovation Platform 2.0 (SOSCIP 2.0)• Expanding to all Ontario Universities, Colleges, Partners• Mining, Digital Media, Cybersecurity & Adv. Manuf. • $20M Fed awarded to SOSCIP • Expand to over 80 projects (8 applications in queue)

CARET• IBM & Atlantic Post secondary schools • Analytics curriculum, training, research Includes IBM Global Delivery Center 500 jobs

$65M+ IBM additional investment Grow skills base and focused HQPGrow business incubation footprintDrive commercialization efforts

Ocean Networks Canada• IBM with Smart Oceans British Columbia • Marine sensors & safety, env’tal stewardship• $1M IBM investment

Atlantic Canada/ New Brunswick / McCain• IBM & U of New Brunswick (Q1 Labs - skills)• Agribusiness, employment, educ., risk

mitigation

Southlake Wellness Ecosystem• IBM & Southlake Health Center, Seneca, UOIT• Health R&D/commercialization in York Region

Southern Ontario Smart Computing Innovation Platform (SOSCIP)• IBM & 11 Ontario Universities• Health, Energy, Water, Cities, Agile • $218M Investment ($20M Fed, $15M Prov, $183M IBM)• 50 projects with 38 SME’s (opportunity to move to incubators )

IBM’s Role in the SOSCIP Innovation Ecosystem

Dedicated state of the art High Performance Computing and Big Data

True Collaboration with Focus on Research Outcomes

High value cross disciplinary analytics skills

Governance and Cross Team Support

AcademicLeaders IBM

Small-MedEnterprises

Research Frameworkon Economic Priorities

Board of DirectorsScientific Advisory CommitteeAgreements and FrameworksCross Team Collaboration

Analytics Curriculum

Assets

Research and Innovation Outcomes

Campus Ontario

Job Related Training Opps

IBM to Stage and Provide and Support Globally Leading and Unique HPC Platforms:

• Simulate Real World • Complex system modeling • Fast design and prototyping• Real time analysis/response

IBM Agile Computing Site

IBM Advanced Analytics Cloud

IBM BGQCanada’s #1 Supercomputer

IBM’s role: • Platform Specialists• Project Mgmt Expertise• Mentors• Collaborators/Funding • Research Assets and IP

IBM’s role: • Curriculum & Training• Internships• Job creation• Mentors• Academic Programs

Large MemorySystem

12

IBM Canada Innovation Ecosystem: Timing is right to take advantage of opportunity

IBM CRDC as true innovation collaboration partner: • Academia, Gov’t and Industry Partners with IBM as model collaboration partners• Researchers are indicating the infrastructure is speeding up research by years• Discussion moved from ‘procurement’ to ‘partnership’• Developing special collaborative relationships and leveraging to incubators and

other government sponsored initiatives • Initiates a strong platform for growth• Leverages our R&D investments for competitive advantage-

What’s Next? Continually Assess Approach

Commit and Engage Focus on Outcomes

SOSCIP & IBM Blair Adamache,

Project Executive and SAC Member IBM Canada R&D Centreadamache@ca.ibm.com

June 24, 2015OCE-SOSCIP Networking Forum

SOSCIP Confidential

Research Delivery Framework

14

Key Activity Target Outcomes

Project Selection Issue Call for Proposals and select projects that align to Consortium research themes and selection criteria

Project Start-up Prepare team and agreements

HPC Platform Onboard to Consortium hardware and software

Project Checkpoints Perform activities in statement of work with six month milestone checkpoints

Commercialization Package outcome and selectively prepare offering to take to market

Skills Build new skills and promote technology adoption in Big Data and High Performance Computing

Cross Team Collaboration Highlight and leverage best project practices and cross team assets

1. Select Projects that leverage HPC to drive social and economic benefit

2. Support projects towards delivering clear outcomes

3. Highlight and leverage best project practices and cross-team assets.

The Research Governance Framework has three key goals:

Smart Meters Analytics (Ryerson)A. Miranskyy, A. Miri, A. Bener, and M. Davison (Western)

Central Smart Meters

Data Repository,e.g., IESO

Secure model for prediction of energy

consumption at a household level

DB2

Analyst: sees prediction, but not the historical Smart

Meters data

Streams(real-time)

Big Insight(offline)

• The problem: predict electricity usage, but keep data secure

• The solution: near-real time analytics with smart meters data