UNIVERSITIES CRUCIAL TO MEETING CANADA'S PRODUCTIVITY CHALLENGE

No. 02-04

Canada faces a prosperity paradox: It is rich and successful, but it shouldn’t be according to one fundamental measurement – productivity. The Conference Board of Canada1 calls productivity – a measure of wealth produced per hour of work performed – “the single most important determinant of a country's per capita income over the longer term.” Yet Canada, as the Conference Board points out, has a poor track record among modern, industrialized economies for generating greater productivity through innovation, and from investments in machinery and equipment (M&E). Here are some highlights from Conference Board of Canada findings:

  • Canada ranks in the middle of the pack in terms of productivity growth, earning a C grade while its major trading partner and competitor, the U.S., earns an A.
  • Canada’s annual productivity growth has actually declined since the early 1970s.
  • Canada’s investment in M&E as a share of GDP remains among the lowest among peer nations – that is, among traditional advanced economies like the United States, Australia, France and Great Britain.

 

DR. EDDY CAMPBELL, the President of the University of New Brunswick (UNB), put the productivity challenge squarely to delegates at “Making the Connection: Universities and Community Economic Development”2. This event, held October 19 in Fredericton, was led and organized by the Association of Atlantic Universities (AAU) in collaboration with the Economic Developers Association of Canada (www.edac.ca). Citing Conference Board studies and other sources, Dr. Campbell suggested Canada must improve its productivity record. He also explained the reason for the nation’s prosperity paradox – Canada is successful not because we’re productive but due to the “curse of natural resources . . .  (that) allow us to coast on the wealth they provide.”
 
The purpose of the Fredericton event was to create greater awareness and understanding among the region’s leaders about the role universities are currently playing in promoting economic development. Dr. Campbell took that mission a step further. In essence, his remarks also challenged delegates and participants to outline the potential of our universities to further enhance community economic success.
 
Conference participants were eager to fly a flag on behalf of the universities, as incubators of innovation, growth and productivity. Representatives of universities from across the region outlined programs that result in the development of a more productive and innovative economy in Atlantic Canada. 
 
Two success stories, however, may have told the story best. 
 
At UNB, physics professor Bruce Balcom has worked with two former students who have managed – as a result of that collaboration – to build Green Imaging Technologies (GIT) of Fredericton into a global success story.  In essence, Balcom encouraged GIT founders Jill and Derrick Green into commercializing technologies developed at UNB’s MRI Research Centre. 
 
As a result, GIT was able to use MRI (magnetic resonance imaging) technology to analyze core samples for the upstream oil and gas industry. This innovative application of leading-edge technology has enabled GIT to become a supplier to major oil and gas companies on five continents. And all of this was accomplished by a company started a few years ago in the capital city of New Brunswick.
 
Transforming university research into commercial success – is a formula that has also been fundamental to the growth of the wine industry in Nova Scotia’s Annapolis Valley. Leigh Huestis, the Director of Industry and Community Engagement at Acadia University, manages more than 30 research projects linked to the burgeoning vineyard and winemaking industries in Nova Scotia’s Annapolis Valley. 
 
The outcome? A flourishing industry that is starting to produce wines with a signature flavour and growing international reputation for excellence. Stephen Kerr, the Executive Director of Kings Regional Economic Development Agency, says the collaboration between Acadia and the local vineyards could be transformative for the area economy.  “This trend of food and culture as a primary source of entertainment has swept the planet. It has transformed places like Tuscany and Niagara-on-the-Lake.”
 
Those who doubt that a similar transformation can take place in this region should consult one of the world’s most authoritative travel guides. Within a month of the Fredericton summit, Lonely Planet selected the Maritimes as a top travel destination for 2012. One of its reasons – Nova Scotia’s organic wines. 
 
Speaking of travel, both the GIT and the Nova Scotia vineyard stories tell us the journey from university research to economic success need not be a long one at all. Indeed, to get back to the theme of the conference, these stories “make the connection” between universities and regional economic development in a dramatic fashion.  
 
This is a particularly important link in Canada, which depends on its universities to be the drivers of research and development – and commercialization. Many commentators lament the poor R&D record of our corporations. At the AAU, however, we believe that Canada’s real opportunity is to leverage the brain power of university researchers to drive economic success and productivity. Let’s use university-private sector partnerships to take advantage of the comparative economic advantage we have, rather than imitate a foreign model. As Jill Green said of GIT’s success, it was all based – in the end – on the “power of partnership” between the private sector and the university.
 
 

Key Questions for Consideration

  • What additional steps should universities take to better promote the commercialization of academic research?
  • What new policies might governments introduce to encourage economic development based on university programs and research?
  • What steps should academic and business leaders take to further open up the dialogue aimed at building the knowledge-based economy in Atlantic Canada?
 
Have an opinion or question about this issue?
 
Contact us: policypaper@atlanticuniversities.ca
 
1 Economy: Labour Productivity Growth: The Conference Board of Canada, (April, 2011)  http://www.conferenceboard.ca/hcp/Details/Economy/measuring-productivity-canada.aspx
 
2 Presentations from Making the Connection: Universities and Community Economic Development, can be found at http://www.atlanticuniversities.ca/making-the-connection