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UofT president reflects on universities and innovation

May 25, 2009

David Naylor, President of the University of Toronto, addressed the Economic Club of Canada last week in Toronto, where he spoke about Canada’s research and innovation tradition and future. The speech represents a major addition to the ongoing discussion about Canadian science policy and priorities. It’s an interesting speech which provides some ideas about how to address the current challenges in Canada’s “innovation gap”. I encourage you to read it.

Naylor’s speech begins with the observation that Canada has been falling behind in the race to build a strong and innovative 21st century economy, and that the recession is likely to worsen our situation. He suggests that we do a poor job of developing talent, despite the estimate that 2/3 of all jobs in 2015 will require post-secondary education. Naylor condemns our achievements in post-secondary education, noting that our numbers are skewed overwhelmingly by community college attendance. He notes that we’re only 18th of 27 nations in university attendees, and that we’re at the bottom of the list in Master’s and PhD graduates. He suggests a big boost in graduate school attendance is necessary to generate a sufficiently talented work force to compete globally.

Naylor also condemns what he calls “a zombie” (presumably because no matter what you do, you just can’t kill it): the tendency to address innovation by focusing exclusively on the “STEM” disciplines (Science, Technology, Engineering, Mathematics). He argues, instead, that a comprehensive multi-disciplinary vision is required, for three reasons:

  1. “Successful societies are built around creative and well-balanced communities”;
  2. High-tech requires social scientists – Jim Balsillie is a commerce graduate who took the technology of the Blackberry and made it a world-leader;
  3. High-tech is always a small fraction of any nation’s economy – echoing Heather Munroe-Blum, he suggests the Cirque du Soleil has a higher international profile than Bombardier.

Naylor then highlights the underperformance of our research community in the highest levels of competition. He suggests that the poor showing of Canadians in competitions for major international prizes (Canada ranks 12th, tied with Israel, in number of such prizes won), suggests that Canada doesn’t do a good enough job of retaining and encouraging world leadership. He suggests that this is a major cultural issue that is relevant to why we don’t see world leadership in innovation, either. The Vanier Scholarships are to be applauded on this score, but we need more support for elite, high-level innovation.

Another zombie, according to Naylor, is the notion that basic research is irrelevant. Furthermore,

This zombie turns into Frankenstein when you add a related idea to it: Governments pay the research bills with taxpayers’ money and governments should tell researchers what to study.

Naylor suggests that “the last hundred years have shown us time and again that basic research, driven by curiosity and arbitrated by peer review, is absolutely essential to human progress – and its practical impacts are totally unpredictable”. As an example, he cites Tony Pawson’s work on protein domains, basic research if ever there was such a thing, linking this work directly to the development of the successful anti-cancer drug Gleevec. The marketplace drives R&D to address demand, but basic research drives demand with disruptive R&D, and the directions are impossible to predict.

Naylor then addresses research funding challenges, and provides a couple of straightforward suggestions for improving aspects of the current situation. He suggests increasing money for “unfunded mandates” of the universities – infrastructure, etc – and states the importance of putting the research granting agencies on a “modest growth trajectory”, pointing out that these aren’t extreme or expensive measures.

The biggest challenge, according to Naylor, and the one most difficult to fix, is the poor performance of overall R&D spending, particularly in the business sector. Even more unsettling than the very poor performance of business R&D overall is the fact that it is about to worsen: the top  two Canadian companies spend more on R&D than the next eight combined, and those two companies are BCE and Nortel – both of whom are in dire straits.

The underlying problems, Naylor suggests, relate to “the four C’s”: coordination, collaboration, capital, and culture. Naylor goes into much clearer detail, but generally we need better coordination between levels of government; more collaboration between academia, industry, and government; a greater pool of capital – especially for high-risk early-stage ventures; and a shift in the cultures of academia and government – academia needs to move from ivory tower to creative commons and government needs to move away from risk-averse political gamesmanship.

Unlike other commentators who have pointed out the challenges without making suggestions to address them, Naylor then proceeds to outline a solution. He suggests that the government needs to do a much better job of helping small early-stage companies finance their growth – it needs to augment the available pool of “risk capital”. He sums up his position here:

First, ultimately, it is the private sector that does commercialization, not universities or governments. Second, to kickstart an innovation economy, governments need to underwrite risks, incubation, and collaboration, but otherwise – with respect – stay out of the way.

Naylor urges Canadians to address these issues, and suggests that we need to move quickly to prevent ourselves from falling futher behind. Overall, his message is a positive one, though:

For one, I believe it is fully within our capabilities to move from mediocrity to excellence in innovation. Making the necessary changes to build an innovation economy is our shared and urgent responsibility if we are to secure the prosperity of future generations in this great country.

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