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To promote growth, Canada needs to fixate on data before credentials

The Globe and Mail Report on Business by Nobina Robinson 26 October 2016

At a recent conference in Ottawa, where speakers included Finance Minister Bill Morneau, Innovation Minister Navdeep Bains and Advisory Council on Economic Growth chair Dominic Barton, a challenge was laid on the table.

We live in a low-growth world and Canada is not immune – we’ve experienced sluggish growth for much of the past decade and our GDP growth rate is not predicted to breach the coveted 3-per-cent mark without bold action now.

So what do we do?

Big ideas were tossed around the room: an infrastructure bank, increasing the labour supply through immigration, increasing investments in research and design. These ideas all have merit, but if we really want to retool Canada’s economy and become the “innovation nation” this Liberal government wants us to be, so far, a key piece to this puzzle is elusive: data.

Weak growth necessitates that we use all of Canada’s assets to reignite our economy. Yet, data are assets that have yet to be effectively leveraged. While we fixate on the numbers of startups or unicorns, do we really have adequate data with which to build a resilient labour force or an innovative economy?

In an exchange with Business Council of Canada chief executive officer John Manley, Mr. Bains highlighted the leading role talent plays in the innovation process. If innovation is going to be the means through which we achieve growth and talent is the driving force behind innovation, let’s start by measuring this key input to growth correctly. Where do Canada’s current talent gaps exist and, more pressingly, where do these gaps exist for the firms performing the innovation that leads to economic growth?

On talent, the data challenge rests almost entirely in the lack of evidence on demand: We do not know in measurable terms what the market demand is for particular skill sets or credentials. For example, we do not know for certain if we are producing too many PhDs, engineers or lawyers, or enough mechatronic technologists, marketing specialists or project managers. The result is an overproduction of individuals in possession of credentials or skill sets the market cannot absorb, even as we clamour for international talent to spur innovation.

Using credentials as a signal for productivity has serious implications. It leaves individuals with high levels of academic achievement working jobs far below their skill sets. A recent Statistics Canada survey on overqualification states that 40 per cent of university graduates outside management occupations are considered to be overqualified for their positions.

Further, innovation is a people-driven activity, so shouldn’t we know what type of talent is in demand by the companies performing innovation? Our approach so far seems to indicate that PhDs in STEM (science, technology, engineering and mathematics) subjects hold a monopoly on R&D and innovation, but innovation is a team sport. We need the contributions of undergraduates and technologists as much as we need doctoral students and researchers. As the government sets about designing a new innovation agenda, the case for evidence-based decision-making in innovation policy is urgent.

In Canada, we decry our underproduction of PhDs relative to global counterparts. Implicit is the assumption that this inhibits our ability to innovate – but what do the data suggest? Data from the 2011 Review of Federal Support for R&D show that Canadian firms use individuals holding technologist designations, BAs, and Master’s degrees more than they use PhDs for R&D. This is the type of demand-side data we need to collect year over year.

Such evidence adds nuance to discussions around credentials. Depending on who you talk to, there is an alphabet soup of credentials in demand: STEM+B (business), or STEM+D (arts and design). Before we move ahead and say we need more of such talent, our first step should be to collect the data about demand for it. Productivity and growth do not occur when our workers cannot effectively put to use the full extent of their education or training. Responsive higher education systems need these indicators of demand to improve the quantity and quality in the supply of innovation talent.

As we seek to move Canada beyond 2-per-cent growth, let’s remember that public policy can’t be built on hunch or anecdote. To attack Canada’s growth challenge, more data are needed to unlock the barriers to commercialization of research and labour productivity. Building a talented, innovative work force is a gradual process and will not happen overnight. Therefore, we need to demand data before we demand innovation.

Nobina Robinson is CEO of Polytechnics Canada.