Education: British Columbia’s Best Resource Driver

June 14, 2016

Presentations to the Vancouver and Burnaby Boards of Trade

Andrew Petter
President and Vice-Chancellor
Simon Fraser University

It's wonderful to be here.  As President of Simon Fraser University, I have been honoured to address the Board of Trade every year. Indeed, it's a significant event on the SFU calendar.

As I hope you know, SFU has made it our mission to be Canada's most community-engaged research university. That’s a mission that requires us to partner with others, which is why occasions like this are so welcome. They provide us a chance to engage with you in a discussion about our shared commitments to the economic and social well-being of our province. So thank you for coming.

I am here today in a dual role and with a broader perspective than I have brought to my previous Board of Trade presentations. For the past two years, I have had the privilege of serving as Chair of the Research University Council of British Columbia. For those who may not know, RUCBC represents British Columbia's six post-secondary research institutions: SFU, UBC, UVic, UNBC, Thompson Rivers University and Royal Roads University.

As chair of RUCBC, I am obliged to consider SFU’s role in a wider context, and to reflect more of the whole of BC’s post-secondary system. From that vantage point, I am going to speak today about the timely opportunity British Columbia has to establish itself as Canada's "Education Province,"  and as a leader in research and innovation, positioned to compete and win in the global knowledge economy.

This opportunity arises, happily, because British Columbia over the years has built one of the world's best post-secondary education systems ‒ a system that gives our province the potential to take full advantage of our most important economic resource: the skills, talents and ambitions of our people, particularly our young people. But to get there, we need to change fundamentally how we view post-secondary education in this province.

To truly become a world-leader in knowledge and innovation, we must understand that tomorrow's leaders will need to do more than simply react to economic change ‒ they will need to shape the nature of that change. Our competitors recognize this. And it's time that we did the same.

Let me start with some good news. As I said earlier, British Columbians can be very proud of their post-secondary education system. Every year, our universities rank at or near the top of the pack in Canada. Looking at the Maclean’s rankings, UBC consistently places among the top three Medical-Doctoral schools in the country. SFU and UVic have, for many years, been at or near the top of the Comprehensive category (with SFU placing first for seven of the last eight years). And this year, the University of Northern British Columbia ‒ which has been a consistent high performer ‒ was named best Primarily Undergraduate university in the country.

We achieve these high marks with less per capita funding than many other provinces. At the same time, our research universities are top performers when it comes to securing federal research funding. BC now ranks second in the country, and first in growth in per capita research dollars flowing into the province. Indeed, BC’s 148 per cent growth in research funding over the past 15 years is almost twice the Canadian average. And that pays dividends on multiple levels.

Most obviously, our universities bring this province more than $700 million a year from federal and other sources, based on a direct provincial investment of less than $100 million. Not a bad rate of return. And it gets even better when you measure its total impact ‒ the combined value of direct research spending, new knowledge and knowledge transfer, and the training of researchers who go on to energize the province’s innovation sector. RUCBC calculates that impact at more than $8 billion annually. The bottom line ‒ BC's research universities are punching well above their weight.

But it's not only BC's research universities that are leading the way. So are our colleges, institutes and teaching universities. They too do an extraordinary job preparing our young people for the challenges of the future. One of the great strengths of BC’s system is its differentiation and diversity. We don’t just have globally significant universities such as UBC, or national champions like SFU, UVic and UNBC. We also boast excellent teaching universities in the mould of Kwantlen and Capilano. And we have best-in-class colleges like Langara, Douglas and VCC and applied schools such as BCIT and the Emily Carr. There’s extraordinary interconnectivity amongst all of these, which means that students can seek out the education they want and the training they need.

Because one size does not fit all. My son Dylan, for example, began his post-secondary journey at Camosun College in Victoria. It was a timely and excellent educational opportunity and the University of Lethbridge, recognizing the quality of his Camosun studies, gave him full credit when he moved into that school’s Bachelor of Management program. Dylan then worked for a couple of years as a business analyst and planner for BC Ferries, before completing his MBA at Cass Business School in London. And now he’s back here, working as general manager for Burnaby-based Traction on Demand, a consulting and cloud software company founded by Greg Malpass, who happens to be a graduate of SFU’s Beedie School of Business.

Dylan’s story is the story of thousands of young people who benefit from BC’s differentiated system of post-secondary education. And it also serves to illustrate how well-regarded our system is beyond our borders. And not just within Canada. International education has become BC’s fifth largest export sector at $2.6 billion, with great capacity for growth and innovation.

So that’s the good news:  BC has one of the world's best post-secondary education systems. It is diverse, integrated and makes an enormous contribution to this province's economic well-being.

Now for the not-so-good news. Despite the strength and success of our post-secondary system, BC is suffering from an education deficit that is costing the province billions in lost economic opportunity, jobs and revenue. That is the conclusion of a major, but little-noticed, study released by the Conference Board of Canada last year. The findings were startling. Based on an extensive employer survey, the Conference Board found that BC's post-secondary institutions weren't graduating enough students to meet economic demand. The conclusion: unfilled jobs and unrealized business potential are costing this province $4.7 billion a year in foregone GDP while costing governments foregone tax revenues of $616 million provincially and $775 million federally.

Worst of all, this education deficit is costing tens of thousands of British Columbians foregone employment opportunities. As the Conference Board said: “Today, over 95,000 BC residents are not employed because they have not obtained a level of education adequate to meet current employers’ needs.” While some of this educational shortfall is in trades and applied skills, the largest gap is in bachelor and graduate level education. According to the study, 57 per cent of businesses are in need of graduates with university degrees. That’s hardly surprising when the skills employers say they most need are critical thinking, problem-solving, oral communication, literacy and an ability to work with others.

Given the dynamic nature of our economy, employers are looking less for workers to fill specific jobs, than for those with the attitudes and aptitudes to learn, to adapt to changing circumstances, and to respond to emerging opportunities and challenges. In terms of disciplines, the demand is highest for graduates in business and management, computer and information sciences, communications, engineering and electronics.

This comes as no surprise to students and educators. All of these areas have experienced significant program growth at BC universities over the past ten years. So, we are doing more of the right thing; we’re just not doing enough of it. And, in BC, we’re especially not doing enough at the graduate level where, in fields like engineering, our population seriously lags other provinces in educational attainment. As a result, employers are denied the employees they need to prosper, even as young people are denied the education they need to achieve their full potential.

At SFU, the average entrance GPA has risen from 80.6% to 87.4% over the past five years. In some high-demand programs, entrance GPAs have risen by over 10%.That means we’re turning away hundreds of students who have the academic ability to succeed in the kinds of programs that will most help employers to grow and thrive.

The Greater Vancouver Board of Trade also pointed to this education deficit in its recent Economic Scorecard. Comparing Metro Vancouver to our closest competitors around the globe, we received only a ‘C’ grade for the percentage of our people 25 or over who have a bachelor’s degree or higher. Just 31 per cent of our population has this increasingly necessary credential. San Francisco’s has 46 per cent. Seattle’s has 40 per cent. We were even edged out by Toronto with 33 per cent.

The Scorecard also disclosed that Metro Vancouver has the third-lowest labour productivity in North America. And, as people in this room well know, education is a key contributor to labour productivity. So what does all this tell us? It's fairly simple: We have an excellent post-secondary education system in B.C. It ranks among the best in world. At the same time, we have a serious education deficit ‒ a deficit that equals lost jobs and lost economic opportunity. I think you can see where I am going.

The evidence tells us that we could be doing a lot more with the post-secondary education system we have. As I suggested at the beginning, that will require a fundamental shift in our thinking, and a significant change in the way we view post-secondary education. It starts with a greater appreciation for the role of human capital in advancing our position in the world economy.

Instead of calling upon universities and colleges merely to respond to predetermined labour market demands, we need to empower our institutions to build the capacities of our citizens so as to drive our economic future.

While our competitors in Europe and Asia invest in education as a primary feature of their economic strategies, we look to our natural resources and appear to regard education ‒ pardon the pun ‒ as secondary.   

This, despite the fact that our greatest economic growth has occurred, and will continue to occur, in the knowledge economy. Employment in the high-tech sector already exceeds 60,000 in Metro Vancouver alone.  And province-wide, high tech employs more people than fishing, forestry, mining, and oil and gas combined. Not that we can afford to ignore our natural resources sector.  It would be a serious mistake to do so.

But, even there, our ability to develop our resources efficiently, transport and process them sustainably, and maximize their value in light of changing market conditions depends upon research, innovation and high-level skills. As important as these resources are, tying our future to their embedded worth puts our economy at the mercy of global forces that are beyond our control. With the natural resource sector, as with other sectors of our economy, it’s human capital that enables us to chart our own course and determine our own destiny.

So, good as it is, we can no longer afford to take our advanced education system for granted. We need to nurture it and harness it as a central feature of our economic strategy. Our vision should be to establish BC as Canada’s education province and a world leader in knowledge, research and innovation.

We should view our universities, colleges and institutes as the most important tools we have to build our intellectual capacity and to shape our economic future.

We must understand that, when we help a young British Columbian to achieve his or her full potential, we are also helping our province to chart a more competitive and prosperous future.

To sum up, British Columbia is blessed with a world-class post-secondary education system. Yet, at the same time, we suffer from a significant education deficit ‒ a deficit that is costing us jobs, revenue and opportunity. To overcome this deficit, we need to see education as a core component our economic strategy. And that requires a shift in thinking.

It requires us to recognize that, in today’s world, people are our greatest resource, and that investing in their educational capacities is the best way to build a strong province and to secure our place in the world economy. That is our challenge and our opportunity. Fortunately, it’s one that I am confident is well within our grasp.