The Human Factor
Building the Skills Base for Innovation

Knowledge Creation

Canada ranks 15th in R&D intensity in OECD

Canadian business enterprise sector ranks 14th (U.S. = 4th)

R&D
Canadian government ranks 13th (U.S. = 12th) - almost average

Canadian higher education sector ranks 11th - above average + above USA "...universities employed 31% of Canadian R and D personnel and produced two-thirds of the nation's scientific publications"

BC poor	>     0.87% of provincial GDP
R&D expenditures	1.6% for Canada as a whole
	2% for Ontario
	2% for Quebec
	2.6% for USA as whole
	4% for California
	5% for Washington and Michigan
	6.5% for New Mexico

BC particularly poor given importance of universities to R&D.
Federal Research Funding per capita ranks 8/10

But Federal Research Funding per faculty member ranks 4/10

So BC's universities = high quality but the scale of university system/relative investment in universities is low

Scale problem, size of academic complement particularly worrisome because of Canada-wide problems:

A	- undersupply of graduate degrees 400,000 MA's/PHD's employed in 2000; 300,000 produced in Canada
B	-- Demographic surge in demand from universities who need 40% of PHD's -- Canada needs 30,000 per year over next 10 year but will produce only 40,000 of which non-university employers need 28,000

Summary - What needs to be done for knowledge creation in BC?

• R&D investments 5X present % of GDP in BC
  
• Increased private sector investment in R&D
  
• Increased public and P3 investment in universities
  
• Expanded grad enrolments/funded graduate enrolment
  
• Balance applied and basic research funding/investment

Knowledge Application/Commercialization

Economic benefit of knowledge creation is a function of conversion to commercially valuable technologies, products, services and management improvements

• Canada leader in university-industry technology collaboration
  
• Growth in commercialization of university research patents/university agreements/spin-off companies/contract research with industry
  
• 800 firms spin-off from university research 1970-2000
    BC does well - UBC well over 100 spin-offs
    But SFU success in 1990s (Association of University Technology
    Managers ranked SFU #1 on list of 50 North American research
    universities in # spin-offs in proportion to dollars in research)
  
• Patent and licensing activity strong although lags U.S.A. and poor income performance

Knowledge Application/Commercialization

Economic benefit of knowledge creation is a function of conversion to commercially valuable technologies, products, services and management improvements

• Canada leader in university-industry technology collaboration
  
• Growth in commercialization of university research patents/university agreements/spin-off companies/contract research with industry
  
• 800 firms spin-off from university research 1970-2000
    BC does well - UBC well over 100 spin-offs
    But SFU success in 1990s (Association of University Technology
    Managers ranked SFU #1 on list of 50 North American research
    universities in # spin-offs in proportion to dollars in research)
  
• Patent and licensing activity strong although lags U.S.A. and poor income performance

• P3 - MITACS (e.g. Ballard/Biotech/
  NEWMIC (partners with Electronic Arts, IBM, Nortel, Xerox
  
• BC leader in Coop undergraduate programmes
  
• BC leader in incubator development through Discovery Parks

Summary - What needs to be done for knowledge application in BC

• Stimulate greater commitment to commercialization of university research [investment in UILO's/intellectual property initiatives]
  
• Stimulate greater P3 partnerships in leading edge research
  
• Expand incubator investment and interaction through Discovery Parks
  
• Develop marketing strategies to sell commercial potential of BC research to venture capital industry

Knowledge Transfer/Skills Development

Key	= Highly qualified personnel: Post-secondary education including trades and technical training in community colleges
Good news	= Canada has most highly educated labour force
Not so bad news	= Canada lags slightly in university degrees in labour force
Bad news	= Government investment in universities lagging USA
	Current university participation rate below average
Very bad news	= job-related continuing education very poor
Worst news	= BC university system lags Canada Worst Baccalaureate production
	Significant professional degree problems
	Significant skills problems = heavy equipment operators, project managers, industrial mechanics, industrial electricians, most building trades, automotive trades, welders, aerospace trades and technicians Demographic pressures - BC age cohort growth

Summary - What is to be done for skills development?

• Fundamental problem of investing in greater university capacity
  
• greater flexibility/differentiation good thing but privates not going to do much for quality access + university colleges degree granting = danger of inadequate attention to applied skills programme development
  
• New era initiatives -- health sciences/IT very good
  
• Still much more investment in quality assured access to university programmes required Need FTE enrolment increase of 35,000 FTE by 2010 to keep at Canadian average
  
• Greater investments in P3 programmes, e.g. SFU's Learning Strategies Group
  
• Greater incentives to highly qualified immigrants/investment in international recruitment