Industry Committee on May 14th, 2015

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you very much to all the witnesses for being here today. There are three very different areas of expertise, all of which are very integral to the study we're doing.

Ms. Cukier, let me start with you.

You finished your comments by talking about the need to transform our education system, our university system, for the 21st century. You talked earlier about needing the structure to take research and the people who want to do research and combining that with the people and the ability to commercialize that research. Can you talk a bit more about what that would actually look like in the university system?

[Prof. Wendy Cukier]

Sure.

I want to give a short answer, and then I can provide some follow-up after the meeting because I know time is short.

Essentially, right now, faculty members are rewarded for doing traditional research. If you look at the funding the federal government provides to support university research, the focus for the most part is on publishing papers and performing in that domain. The places where there's funding to support the commercialization of technology doesn't fall in the traditional places universities look for funding. It's more organizations like FedDev and the Canada accelerator and incubator program that have indirectly provided funding to support universities who want to build incubators, commercialize technologies, and so on.

My first point is simply that our structures are not aligned to do what we say the objectives are.

The second point is that our president has said repeatedly he wants to graduate students who have the choice of a career—and Ryerson is very well positioned in that space—or create their own companies and hire other people. He talks about students graduating with a diploma in one hand and a corporation in the other. Providing opportunities for young people to increase their employability through co-ops, through paid internships, and so on, is absolutely fundamental and not disconnected with some of the things the other panellists have talked about.

If you look at the challenges many small and medium enterprises are facing in their use of advanced technology, part of it is buying the technology. Part of it frankly is that most CEOs of SMEs are worried about meeting payroll on Friday and don't have the time to change the wheels on the bus while they're driving 90 miles an hour down the highway.

There's a huge opportunity, but we don't have the structures to support young people going to small or medium enterprises and helping them harness the potential of some of these new technologies. That's the kind of thing we're working on with the Ontario Chamber of Commerce, but existing structures don't support that kind of experiential learning in the ways we would like to see it supported.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thanks very much.

We did hear in our last panel as well that professors are funded to do research, but they're not funded to do commercialization. We do need both obviously. I'm a big believer in funding basic research, but we've been missing that kind of driveshaft to take it to the commercialization.

I want to applaud your work. You've given me a tour of the digital media zone at Ryerson. It's very exciting and there are so many incredible, bright young minds there. It shows that when you bring people from different disciplines together there is an explosion of not just ideas but the commercialization takes place.

I have a lot of questions for you, but I want to ask some of the others.

Mr. McKay, I have been to Google in Canada, and thank you for that tour. That was very interesting. What would it take for Canada to be the home of the driverless car? How would we get Google to set up a greenfield site in Canada and produce their vehicles here?

[Colin McKay]

It's an ambitious goal and one I share.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I'm shooting for the moon, Mr. McKay.

[Colin McKay]

Exactly.

Unfortunately we're taking baby steps in making sure we perfect the technology, but it is exactly the sort of technology that Martin was referring to that you build from small-scale manufacturing, with very specific components and very sophisticated systems, and do it in a way that can be expanded quite quickly to meet market demands.

I would say Canada already has the components in place for a similar industry, whether it is in robotics, advanced manufacturing, or even automobile manufacturing. We do have early career, mid-career, and late-career specialists in computer sciences and applied systems that do the sort of work that we look for in that program. Once again the challenge is having firms identify the market and make the investments themselves as well.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. McKay, Ms. Nash.

Now on to Mr. Carmichael.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you, Chair.

Welcome to our witnesses. This is an absolutely fabulous topic. What a great opportunity to expand our horizons, and your input today is very important.

Dr. Rahnama spoke the other day to tearing down the walls at the DMZ and giving young innovators an opportunity, without putting any brakes on them, to come up with new ideas to innovate and to create new technologies, disruptive technologies.

My question to you, Ms. Cukier, is this. How do you take those technologies and create the entrepreneurial drive that's going to give that individual the opportunity to start a new company, and take it...? The last time we spoke with you, we talked about the gap between research, innovation, and commercialization. We have that valley of death that we referred to way back, two years ago, which seems like a long time ago. How do you take these young people and give them the chance to run their own companies, but give them the tools to do it in a way that they're going to get to a commercialized state, succeed, and then employ that in the marketplace?

[Prof. Wendy Cukier]

I think it's an excellent question, and I think the younger we start, the better. The first thing you need is someone who has that entrepreneurial intent, and the percentage of Canadians who think about starting their own businesses is smaller than we would like, so you have to start early.

Once they have an idea, getting them advice, mentors, exposure to potential customers, and a deep understanding of the end-user are critically important. Too often you end up with flying pigs that no one wants. You need that interaction between young people who have a great idea and the potential market.

Here's a good example. We were talking about drones. One of our DMZ companies just raised $2.5 million in crowd-sourced funding for their drone, DreamQii. The secret sauce in the DMZ is partly culture, but it's also location, location, location. We have 300 people coming through that place who are potential investors and customers. We have Heather Reisman walking down the hall and saying, “I'll take one of those and here's the cheque”. That's an oversimplification, but a kid working in their garage does not have the same opportunities for exposure to mentors, for exposure to customers, or for exposure to investors that they do in a place like the DMZ.

Of course, there's Communitech, and there are incubators all over. That's key, and so is providing the potential seed funds to get them started. We've worked really hard to have laddering so that you can get a little bit of money to start, and then the funnel narrows and you have to go through another competition. We pick the best out of those. You get more money and more money, and so on.

You may all know that we recently partnered with a number of private sector investors, the Ontario government, hopefully the federal government as well, for Scale Up Ventures to try to address exactly the problem with the valley of death, where you get to the $200,000 investment level and then you're stuck.

You really have to take an ecosystem approach to it. I think Canada is doing well, but it certainly can do a lot better. Does that answer your question?

[John Carmichael, Conservative, Don Valley West, ON]

You're getting close.

[Prof. Wendy Cukier]

Okay.

[John Carmichael, Conservative, Don Valley West, ON]

I'll just carry on from there.

You've given that individual the opportunity to become an entrepreneur, to build their business, to build their dream. The follow-up question is going to be: how do we, as government, play a role that will benefit all this? I guess that's a loaded question that you can all jump into, but if you've taken the walls down and you've given them the free rein to develop, how do you manage that internally to ensure that they're going to get to a place of success, so no flying pigs?

[Prof. Wendy Cukier]

One of the things that results in success is failure. You have to be able to tolerate failure. You have to be able to allow them to say, “This isn't going to work”, to pivot, or to join a different company. I would say that we'd rather have three out of five than two out of two. Encouraging that kind of risk-taking behaviour, where failure is a badge of courage and not something to be ashamed about, is hugely important.

In addition to supporting some of the programs that reinforce these opportunities for young people, government is a huge potential customer. Right now there are a lot of restrictions on procurement and so on. We've heard strategy after strategy for the last 20 years. Government should be a model user. Government should be a place where there are opportunities to experiment, to innovate, and to give some of these young people a chance to sell and try their products. Governments should be the first customer. The City of Ottawa, OC Transpo, was one of Hossein's first customers.

[Colin McKay]

I completely agree that you both have to emphasize the ecosystem as well as the ability within the constraints of government support and government programs to actually have a couple of failures or two under your belt.

What we try to do is build that ecosystem from a young age all the way through to university and beyond, working in the community, as Wendy mentioned, with tech hubs like Communitech and Notman House in Montreal, but starting at an earlier age with programs, like Ladies Learning Code and Actua's Codemakers, to get them interested in the technology and working within a community of peers so they have those shared experiences.

The opportunities—

[The Chair, Conservative, David Sweet]

Mr. McKay, I'll get you to expand on that later. The time is up in this round.

Ms. Sgro, you have six minutes.

[Judy Sgro, Liberal, York West, ON]

Well, it's okay because quite often Mr. Carmichael and I have the same train of thought, so don't take all of my time, but perhaps you'd like to finish that up.

[Colin McKay]

Sure. We refer to these tech hubs frequently today, and they are success stories because they provide that space where you have the researchers and academics, who may hold tenure but are looking for an opportunity to explore business ventures, and they can cross paths with business people.

These are the sorts of exercises that help break down some of these roles for the more motivated among the academic world, and they're the sorts of exercises that need to be supported in a more flexible and consistent manner across the country.

[Judy Sgro, Liberal, York West, ON]

Mr. Lavoie, would you like to comment on that?

[Martin Lavoie]

No. I'll leave it up to your questions.

[Judy Sgro, Liberal, York West, ON]

Good.

Ms. Cukier, I can't help but sense some frustration within your comments when you are talking to us about these disruptive technologies and what we could have and could not have. Government gets in the way many times rather than helps sufficiently, I think.

Clearly, on this particular topic that we're talking about, we see that as a huge opportunity in the future. What government wants to know, I would suggest, no matter who's sitting at this table or another table, is how we help that happen. First, how do we get those students excited? By the time they end up at Ryerson, as an example, do they already have the bug? Rather than waiting until they're in university, how can we get our younger kids, the nine- and ten-year-olds who are playing around with these different ideas, excited and thinking about how they might work on the development of various things so that continues to build and feed that entrepreneurial skill as they go through their high school years and into university?

[Prof. Wendy Cukier]

They've already dropped math.

[Judy Sgro, Liberal, York West, ON]

Okay. I'll turn it over to you for your comments.

[Prof. Wendy Cukier]

I think the strongest predictor of entrepreneurship is if your parent was self-employed—a farmer, an entrepreneur. In Canada, because of the structure of our economy, we don't have as much as some other countries do.

I think there are groups like the Learning Partnership, for example, that try to get in even as early as grade 3 and let kids start their own businesses, even if they're just selling things back and forth to each other. There are all sorts of camps. Waterloo runs them. Ryerson runs them. Many universities run them, where kids can come to school in the summer and work on science projects or entrepreneurial ventures, and so on.

There are informal opportunities that are equally important as saying everyone must have a course in entrepreneurship, as they have in China, but I do think it goes to the fundamental culture. It goes to celebrating entrepreneurs as successful role models.

When I talk about my frustrations, to be perfectly honest, the federal government has been very good to Ryerson in terms of supporting some of our out-of-the-box approaches. What I would say is that the traditional models of funding university research and programming tend not to promote innovation, particularly at the federal level. But also at the federal level, it's important to look at what we say our objectives are and make sure we have the processes in place to realize them.

I think we're moving in the right direction, but we can be doing more.

[Judy Sgro, Liberal, York West, ON]

One other question.... Can you provide a description of the roles of applied research and basic research in the development of disruptive technologies?

[Prof. Wendy Cukier]

That's a super important question. People always want to say pick one or the other, and that's a mistake. John Polanyi points out a perfect example. Research in lobster ophthalmology—the study of lobster eyes—I think in Newfoundland, created breakthrough technology for the cutting of silicon chips.

Nobody anticipated that this would lead to this. No one is going to find a cure for cancer in the digital media zone, so we have to protect and reinforce fundamental research, but we also have to recognize that market-driven applied research, partnering with industry and community organizations, is also valuable and should also be rewarded. It's not either/or. It's both.