UNIVERSITIES – STRATEGIC ASSETS VS. SACRED COWS – DO BOTH DESCRIPTIONS MISS THE MARK?

This post is prompted by a column in the February 24th, 2011 Chronicle-Herald by Peter Halpin, Executive Director of the Atlantic Association of Universities — www.thechronicleherald.ca/Letters/1229890.html — which challenges the perspective of the Halifax Chamber of Commerce on the role of universities in our local and regional economy.

While I share some of the AAU’s concerns, I will also respectfully submit that basing a criticism of the Chamber’s Outlook 2011 document on the key findings of an economic impact study is not an argument that leads from strength. More about that below, but for those interested in knowing more about just how important universities are to our economy, the full study, as well as summary versions and other related policy papers can be found at this link — www.atlanticuniversities.ca/AbsPage.aspx?siteid=1&lang=1&id=6

I also share some of the concerns the Chamber articulates in its description of education as an ‘Issue’, but suggest as well that as an argument for change, this position too does not lead from strength. More about that below as well, but for those interested, the full details of the Chamber’s Outlook report can be found at the following link — www.halifaxchamber.com/files/15/88/BVoutlook2011.pdf

The Sacred Cow Perspective

The Chamber’s Outlook 2011 Report addresses education in the ‘issues’ section, not in the industries section. Specifically with regard to universities, the Chamber seems to adopt the views of Dr. Tim O’Neill, (expressed in his report to the Premier), with regard to the market challenges of declining university-age population, [within the region], suggesting the “province may not be able to support as many institutions as it has and that smaller niche schools may have to look to their larger cousins for opportunities to cooperate or even merge”. The Chamber document goes on to state that the number, role and position of universities in Nova Scotia needs to be viewed within the context of the “ongoing discussion about the size and cost of government” and examined along with “other government expenditures”. The Chamber calls on the universities to do a better job of explaining the value they bring to our economy and our society and notes that if an acceptable [to whom?] argument can’t be made, “then we need to cast a critical eye on them”.

In its Outlook report, the Chamber seems to imply that universities are simply another government expenditure, like health care, roads or social assistance. This view does not reflect the sources of revenues and range of economic activity of our universities.

To illustrate, there are currently almost 17,000 students enrolled at Dalhousie — more than half these students come from outside Nova Scotia, representing significant incremental ‘export earnings’ for the province. And, it should be noted, proportionately Dal is neither the most internationally nor the most externally focussed institution in the province. Within the Halifax area, both St. Mary’s and Mount Saint Vincent attract significant numbers of international students.

On the research front, Dalhousie’s total funded research activity this year will approach $150 million — more than two-thirds of which originates from sources other than the Nova Scotia Government and the federal Tri-Council granting agencies. This too represents a form of ‘export earnings’ for Nova Scotia. And faculty at all post-secondary institutions in Nova Scotia — including the other universities and the Nova Scotia Community College and the Nova Scotia Agriculture College — actively pursue and engage in international research contracts and activities that generate incremental revenues to Nova Scotia. These international projects represent a valuable source of export earnings for both the institutions involved and the province and total, even with a relatively limited effort, roughly $10 – $15 million in export earnings annually.

Nonetheless, notwithstanding these acknowledged or unacknowledged strengths, Nova Scotia’s universities collectively and individually face significant strategic business and market challenges related to continuing declines in high school graduations within the region, as well as from declining public sector funding support that is also attributable to the demographic profile of our population.

The Strategic Assets Perspective

The AAU has cited a number of key points and facts about the economic impact of universities in Halifax. These need not be repeated here, except to note that the points raised and the full study from which these points are drawn clearly illustrate that universities constitute a signficant ‘industry’ in our local, provincial and regional economy.

The AAU’s argument relies on economic impact data that seems to say ‘we’re big and we’re important’, but the ‘Chamber is not showing us proper respect’. There may well be merit in that position but its weakness is that its founded on data that in effect says ‘here’s what you did for me yesterday’.

I don’t equate Nova Scotia’s universities with the auto sector, but for me the reliance on the economic impact data contains echoes of the ‘we’re too important to fail’ arguments put forward by General Motors and Chrysler as they faced the abyss of plummeting sales and crashing financial markets in late 2008 and early 2009. Over the years, those companies had invested in plants and facilities that they undoubtedly viewed as strategic assets at the time. But when assets are misaligned with market shifts, their strategic value diminishes markedly.

Economic impact data is inherently backward focused and provides no real linkage to future directions and opportunities. In particular, in the context of the substantive strategic business and market challenges faced by our universities, there is a need for articulation of how the institutions’ existing and developing asset base can serve to leverage new sources of revenue and growth.

Towards an Alternative, Strategic Perspective

Unfortunately, neither the sacred cow nor the strategic assets perspectives articulated by the Chamber and AAU respectively are particularly helpful in creating a strategic framework within which our universities can address identified business and market challenges and opportunities and chart new courses towards sustainable growth.

By most measures, the education and related research ‘product’ our institutions deliver is high quality and well regarded internationally. It also demonstrates strong market acceptance. Nova Scotia’s universities, indeed its entire post-secondary education sector is, in our view, a significant economic sector for Nova Scotia, with substantial potential for growth.

Some of that high potential future and growth 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 Nova Scotia has natural credibility and competitive strength;
  • The imminent opening of the Innovacorp Enterprise Centre and the adjoining Life Sciences Research Institute will combine office and lab space with enhanced incubation capability that will contribute to the growth and success of new life sciences companies, many of which will be based on technologies developed at our universities; and,
  • The Biomedical MRI Research Laboratory (BMRL) at Halifax’s IWK Health Centre, together with the Neuroimaging Research Laboratory (NRL) at the QE II Health Sciences Centre, represent effective collaborations between the universities, the hospitals, government and the private sector and enable life science companies in the Halifax region to pursue research and development, technology transfer and new product commercialization.

But significantly more is possible. Our universities and our P-12 education system are staffed by highly educated people with expertise that is in demand internationally. Nova Scotia’s academics and education professionals have significant, recognised expertise in areas related to curriculum development and delivery of education programming, coastal zone management, oceans, environmental management, community economic development, entrepreneurship and business management The annual global market for education-related services alone totals roughly $2 trillion; and opportunities in the other areas mentioned represent an annual market opportunity of another $500 million plus annually.

The AAU quotes Mike Harcourt, former Premier of British Columbia and former Mayor of Vancouver as recently telling 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 we are great, but rather that we could become great with effective leverage of the knowledge and expertise contained within our universities.

The knowledge and expertise contained within our education sector is one of Nova Scotia’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, Nova Scotia’s and Atlantic Canada’s education institutions could become our most significant, knowledge-based export earners. In short, they could become great and be recognised by all, including the Chamber, as a substantial industry, not just an issue.

1 reply
  1. Peter Halpin
    Peter Halpin says:

    Peter: thank you for posting a thoughtful and well-articulated piece about the role, value and contribution of Halifax’s universities to the economic and social vitality of the city – past, present and future.

    Many of Halifax’s universities; the Association of Atlantic Universities and Inter-University Services Inc., are long-time members of the Halifax Chamber. We believe the Chamber plays a vitally important role as a ‘Voice for Business’ and thats why it garners our active support.

    As members and strong supporters of the Chamber and its programs, it is disappointing to our universities and their representative associations, that the Chamber’s leadership has taken a somewhat cynical point of view concerning our sector. Quoting Oscar Wilde, “A cynic knows the price of everything but the value of nothing”.

    The Boston Chamber of Commerce celebrates its many universities and colleges as a ‘crown jewel’ and refers to those institutions as the ‘innovation engine’ that drives our economy’. The Board of Trade of Metropolitan Montreal is an extraordinarily strong, public advocate for that city’s universities in the areas of funding, economic impact, research and development and innovation (much of which you have quite ably noted in your post).

    Again, thank you for initiating what we believe should be an important public discussion. PH

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