Peter Milley

Universities - Underutilized strategic assets?

By Peter Milley

In recent months, a number of articles and blogs have expressed concerns about the role of universities in our local, regional and national economies that seem to be based on perceptions of limited institutional concern for stimulating economic growth and activity. These arguments often suggest that university performance is weak with respect to commercializing new technologies; or that universities need to be viewed as simply another government expenditure — like health care, roads or social assistance — that needs to be reviewed for affordability.

These concerns do not reflect the reality of the current value of our university sector. But do they perhaps indicate a concern about unrealized potential?

Nationally, there are some 90,000 international students registered at Canadian universities. On average, these students each represent an incremental positive impact on GDP of more than $20,000 — an economic gain of about $2 billion. At a more local level, there are currently almost 17,000 students enrolled at Dalhousie University in Halifax. More than half these students come from outside Nova Scotia, representing significant incremental export earnings for the province. Across the country, other institutions also act as regional magnets.

On the research front, total funded research activity at Canadian universities exceeds $10 billion annually and generates an economic impact of more than $60 billion. And faculty at most post-secondary institutions across the country actively pursue and engage in international research contracts and activities. These international projects represent a valuable source of revenue and total roughly $150-$200 million in export earnings annually — a doubling over the past decade.

Notwithstanding their acknowledged and unacknowledged strengths, Canada's universities collectively and individually face significant strategic business and market challenges related to such factors as declines in high school graduations in some parts of the country and pressures on public sector funding support. As well, the global market for students and talent is becoming increasingly competitive, making it all the more important that our universities offer high quality, relevant and attractive learning experiences.

In the context of these substantive strategic business and market challenges, there is a need to articulate how the institutions' existing and developing asset base can serve to leverage new sources of revenue and growth.

By most measures, the education and related research ‘product' our institutions deliver is high quality and well regarded internationally. Their attractiveness to international students and, increasingly, to international research funders, also demonstrates strong market acceptance. Canada's universities, indeed its entire post-secondary education sector is, in our view, a significant economic sector for the country, with substantial potential for growth.

Some of that high potential future growth and collaboration is beginning to emerge:

* The impending launch of the Halifax Marine Research Institute and the related Canada Excellence Research Chair (CERC) in Ocean Science and Technology will represent a new benchmark for collaboration and engagement between multiple institutions, and the private and public sectors, focused on a wide range of issues related to oceans — an area in which the region has natural credibility and competitive strength;

* York University's Schulich School of Business is expanding directly into a growth market, developing a campus in Hyderabad, India that will be the first foreign degree granting institution in the country;

* The Canadian Light Source synchrotron at the University of Saskatchewan has recently received $12 million in funding to begin investigating the production of medical isotopes safely, economically and without using a nuclear reactor or weapons-grade uranium. It will soon be commissioning the Brockhouse X-ray Diffraction and Scattering Sector, a suite of three beamlines and ancillary facilities; and,

* Queen's University and St Lawrence College are establishing more working partnerships aimed at promoting and supporting innovation, commercialization and increased productivity through collaboration with the private sector, joint projects and business support. This includes a study on Solar Photovoltaic System performance involving 16 companies.

But significantly more is possible. Our universities and our K-12 education system are staffed by highly educated people with expertise that is in demand internationally. Canada's academics and education professionals have significant, recognized expertise in a diverse range of areas including curriculum development and delivery of education programming, coastal zone management, oceans, environmental management, resource management and extraction, community economic development, entrepreneurship and business management. The annual global market for education-related services alone totals roughly $2 trillion.

Mike Harcourt, former premier of British Columbia and former mayor of Vancouver, recently told Haligonians that "your universities provide the foundation and opportunity to move Halifax from good to great". Note, however, his emphasis was very much on "foundation and opportunity". He did not say that Halifax is great, but rather that it could become great with effective leverage of the knowledge and expertise contained within our universities. His statement is relevant in many university and college centres across the country.

The knowledge and expertise contained within our education sector is one of Canada's most effective strategic assets. But like all business assets, it needs to be leveraged and focused — on where markets are going tomorrow, not where they have been. Our universities, indeed all the institutions within our education sector, employ people with skills, expertise and knowledge that is in demand and that can be sold globally.

Through active and aggressive pursuit of global market opportunities combined with collaboration with each other and with private and other public sector partners, Canada' s education institutions have the potential to become our most significant, knowledge-based export earners. In short, they could become great and be recognized by all as a substantial industry, not just another government expenditure.

Peter Milley (Peter.Milley@halifaxglobal.com) is a partner in Halifax Global Inc, an independent management consulting firm based in Halifax.