Industry Committee on June 16th, 2015

[The Chair, Conservative, David Sweet]

Good morning, ladies and gentlemen.

Good morning, everyone.

Welcome to the 52nd meeting of the Standing Committee on Industry, Science and Technology where we're continuing our study on disruptive technologies.

We're grateful to have some very high-calibre witnesses with us. From the Canadian Nuclear Laboratories, we have Robert Walker, president and chief executive officer. From Information Technology Association of Canada, we have Karna Gupta, president and chief executive officer, as well as Kelly Hutchinson, vice-president, government relations and policy. From Mitacs, Jean-Marie De Koninck, special adviser for the scientific director, and Robert Annan, chief research officer, research and policy; and from Pratt & Whitney Canada, we have Walter Di Bartolomeo, vice-president, engineering.

We'll begin with Mr. Walker and we'll go in the order in which I introduced everyone. Please try to keep it to six minutes. We'll go to rounds of questions after that, and anything you weren't able to say within six minutes, I'm certain you'll be able to squeeze into some answer somewhere along the way.

Please go ahead, Mr. Walker.

[Dr. Robert Walker, President and Chief Executive Officer, Canadian Nuclear Laboratories]

Thank you, Mr. Chair.

I want to thank the committee for this opportunity to share my perspectives on disruptive technologies.

These are rooted in my 38-year career, first as a scientist, and then as an executive of science and technology organizations and programs that, in one way or another, have been intimately connected to matters of defence, national security and public safety.

Ladies and gentlemen, the early indicators of disruptive potential of technologies often appear long before the disruption occurs, though history shows we often miss these indicators for many reasons. I'll use some anecdotes to make this point.

As a young researcher at one of Canada's defence labs in the early 1980s, I was introduced to a somewhat clunky but fascinating new communications tool called “electronic mail”, or what we had started to call “email”, when our defence labs gained access to an emerging concept being pioneered by the U.S. military, called ARPANET. We immediately had a new, real-time method of collaborating with our Canadian and U.S. defence researchers. Our mindset towards collaboration changed quickly.

In the early 1990s, under a defence program I was managing at the time, we were approached by a group of engineers looking to spin out of Nortel. They had what appeared to be an effective and affordable way of encrypting email. This seemed like a great idea with a potential future market if email were to gain wide use. We agreed to help. The company was formed. Its name is Entrust, now recognized as a world leader in information security technologies.

In the late 1990s, as the ARPANET had moved into civilian mainstream, now known as the Internet, we began to be concerned that as the military became more dependent on information and communication technologies, it would be vulnerable to potential adversaries' disruption of these systems. We formed a group to begin researching information security, including the potential of information warfare and how to defend against it.

In 2008 the world witnessed the first use of cyberwarfare during the Russia-Georgia war. The world had been disrupted.

Here's a second example. In the mid-1990s our defence scientists were examining the potential to bring together two space-based technologies. First, what were the military and civil implications of the U.S. military agreeing to make available for civil use the signals from its newly operational space-based global positioning system? What if low-cost GPS receivers were available commercially? The second was the potential military and civil applications for high-resolution imaging obtained from space-based systems, such as Canada's then recently launched RADARSAT. What if these massive digital images of any location in the world could be made available to users in real time?

Now, couple this with the real-time accuracy of GPS location information and we have enormous potential. We thought these could be game-changers, but we were daunted by the challenges to commoditize them. A decade later, companies such as Apple and Google had made low-cost accessibility to these integrated technologies ubiquitous. The world had been disrupted.

On September 11, 2001, we all watched in horror as the terrorist attacks in New York and Washington unfolded before a global audience. Terrorists had used existing technology—civilian aircraft—in an unconventional way to a massively disruptive effect. Were the warning signals there in advance? Arguably, our cultural bias that suicide was unacceptable, no matter what the commitment to a cause may be, made it difficult to contemplate such a scenario. The month following, the world was introduced to the spectre of biological terrorism when laboratory-engineered anthrax spores were sent to individuals using the U.S. postal system as the delivery mechanism.

What's my point in reciting these incidents? Yes, both were cases of innovative application of existing technologies. However, the real disruptions have been in the way governments and societies have responded to these events through the implementation of new and more stringent security legislation and measures.

Let's look at some of the key issues that are before Parliament legislators and regulators today. In the late 1940s, the oil and gas industry had proven a new and innovative technology, called hydraulic fracturing, or fracking. Over the past 15 years it has been applied on large commercial scale to shale-oil and gas deposits.

What's the disruptive effect? Arguably the most significant is that within the coming decade, the U.S. is forecast to go from being a net energy importer to being a net energy exporter. The geopolitical implications are far-reaching. In Canada, we are presently dealing with the economic implications of a dramatic drop in the price of oil, tied in part to a global oversupply enabled by fracking. The world has been disrupted.

Now I suggest that the most disruptive technology that the world is experiencing today is social networking. This is profoundly changing the way that people interact. There are many upsides. There are also new ethical, security, and safety implications to which governments, legislators, regulators, and security organizations are scrambling to respond. Cyberbullying, identity theft, and ISIS recruitment of Canadians via social networks are examples of hot topics.

The world needs new technology to address many of the grand challenges facing humankind in the 21st century: climate change, population health, energy security, food supply, and urbanization. We can expect that technological solutions to these grand challenges will be disruptive to markets and to society, just as the consequences of humankind's inability to find technological solutions will most assuredly be disruptive to our current way of life.

However, I contend that the public's acceptance of new technology is taking on some troubling dynamics. The public's perception of the risk to society of new technology is being confounded by the inability to communicate in simple terms and build broad public trust in the answer to one question: what does the science say regarding risk? Regulators are frequently faced with public backlash, in effect that the risk is not acceptable, and in fact, that no risk is acceptable. Genetically modified foods, deep geological repositories for radiological materials, pipeline safety, windmill siting, and child vaccinations are each important case studies of how the public perceives and ultimately accepts or rejects risk, despite the significant benefits that these technologies will otherwise bring to society, the environment, and the planet.

The world will surprise us; of this, I'm sure. Many of these surprises will be rooted in the disruptive consequences of new technology or the innovative application of existing technology. Business will be on the front line, both in creating the conditions for disruption that leads to competitive advantage in the marketplace and in responding to others' competitive advantage. There is much that governments can do and must do to help the business sector in this regard.

On the other hand, governments will be on the front line when it comes to addressing the social, ethical, economic, safety, and security disruptions that occur from technological innovation. Efforts to forecast the potential disruptive effect of technologies on markets and society are important. There is much at stake.

Now I contend that to effectively address these challenges requires vigorous engagements of government and science and of the public and science. It's difficult to find a grand challenge facing Parliament that does not have a significant science component. Parliament needs to be a customer of science advice. New mechanisms have been put in place to address this gap—the Council of Canadian Academies, and the Science, Technology and Innovation Council, to name some—and more needs to be done.

One example of “more” is the government's initiative under way to transform Canada's largest science and technology complex located two hours up the Ottawa River at Chalk River into a multi-mission, national laboratory under private sector management. The government-owned, contractor-operated model has been proven to work very well in the U.S. and U.K.

What does this big idea offer by way of potential? It offers relevant and timely science advice and technology innovation for governments to help them understand future disruptive technologies and to address public safety, security, and health needs; the potential to be a key player in meeting the G-7 goal to decarbonize economies; commercialization support for small to large companies seeking to build competitive advantage through technology; and access by academic and industry researchers to large publicly funded science infrastructure. It's a big idea whose time has come.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Dr. Walker. It's comforting to know that there are still plenty of us around who remember a time before email.

Mr. Gupta, please go ahead.

[Karna Gupta, President and Chief Executive Officer, Information Technology Association of Canada]

Thank you, Mr. Chair, and honourable members. Thank you very much for having ITAC at this session.

Just to introduce ourselves, ITAC represents the technology sector of the country. With over 300 companies, we produce about $160 billion in revenue and one million jobs. Most importantly, we spend about $5 billion on R and D, so the disruptive technology discussion is very apropos.

There are several disruptive technologies that are unfolding at the same time. They range from robotics to the cloud to genomics to 3-D printing to renewable energy. However, we need to address them not only as discrete technologies but also look at how these innovations collide and create a new world, because they are and they will be always connected and intelligent.

A McKinsey report recently talked about several disruptive technologies. Today, I will speak about one that falls in the top three, and it is often referred to as the Internet of things, or IoT. The Internet of things, or IoT, is the online interaction between different technologies. All of the disruptive technologies you have heard about and you will be hearing about over the next little while through this committee will essentially dovetail into IoT as they all become interconnected and in some part reside online.

As ITAC, we look at technology through the filter of public policy. We understand the benefits of innovation but also its implications. For our members this is a major issue in the technology sector: how to deal with the policy and the new business models that will emerge. Today I will comment on what it means, why it is important, and what the impacts are.

ITAC wants this committee and the government to recognize IoT and develop a national discourse, ignite a must-have dialogue amongst academia and private sector and public sector experts, and start a discussion to begin developing a policy framework to proactively deal with it.

IoT creates the ultimate connected world where intelligence is shared between machines, applications, and services, and therefore creates data models that will significantly improve the way we make decisions. In fact, sometimes the decision may not even require human intervention. Simply put, technologies will connect, work together, and communicate online. It provides us with capability rather than technology. The solution comprises technology and telecom hardware, software, services, sensors, applications, security, radio frequency, etc. Most of it will be cloud-based and mobile-enabled.

Just to give you two examples, recently a company in Alberta, called GrowSafe, used RFID tags for their livestock. What that means is that it allows them to measure many factors related to wellness of the farm animals. This gives farmers the visibility on health and development to proactively deal with the animals, and this makes our food supply safer. This is an example of the Internet of things, a capability that resulted from multiple things communicating one with the other through technology and the Internet without human intervention.

I'll give you a second example. Dr. Carolyn McGregor, Canada research chair in health informatics at the University of Ontario Institute of Technology, leads a project that significantly improves the survival of premature babies. The combination of cloud computing, wireless technology, and data analytics has provided their team with the ability to detect infections in preemies earlier than before, and this has saved a lot of lives. Again, it's an example of the Internet of things, whereby a multitude of hardware, software, services, and centres that come together without human interaction will truly usher in a new world we have not seen before.

Unfortunately, not all great things are devoid of consequences. There are several things we need to address. Privacy is one of the greatest concerns. Canada has been at the forefront of global leadership on safeguarding privacy and with the evolution of our digital age this could be compromised. Safety and security is a problem. While these new technologies have benefits, IoT will dramatically increase the attack surface available to bad actors. With the capacity issues, bandwidth and network capacities in rural areas, regardless of infrastructure investments made, will become a scarce resource and their governance even more complex.

Economic and commercial and public policy issues are very far-reaching. There are intellectual property and trade issues. Who owns the data that's being generated? Standards and legal frameworks issues: what regulations can be put in place for competing technologies to work together and what kind of governance is required to be ethical? There are workforce implications. A recent study done in the U.S. demonstrates that robotics may replace up to 40% of their workforce. The policy implications are very serious and we need to address them.

As the Information Technology Association of Canada, we strongly recommend that the standing committee continue this discussion into new sessions and beyond. IoT will be a truly disruptive force, moving faster than you can see it happening.

For our part, ITAC is starting to create a white paper with several top leaders and as soon as it's ready, we'll have it translated and sent to all of you. We have established an IoT round table of leading industry experts who have pledged to contribute and provide perspective, insight, and knowledge on this important factor.

We ask the standing committee and the government that a national discourse be created with a proper secretariat and facilities so we can do a deep dive, have further investigation done, and have the policy framework that prepares for the IoT that is coming. Much like the information highway in the 1990s, it needs that level of attention from the government of the day.

Thank you very much, Mr. Chair.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Gupta; we look forward to that white paper.

Now we'll move on to Dr. De Koninck.

[Dr. Jean-Marie De Koninck, Special Advisor of the scientific director, Mitacs]

Thank you, Mr. Chair, for this invitation to appear before the committee.

I would like to begin by introducing myself and the person accompanying me. As some may know, I am a mathematician and professor at the Université Laval. I am also the Special Advisor of the scientific director of Mitacs. I identify myself as a researcher, educator and communicator.

I will now introduce Dr. Robert Annan, Chief Research Officer at Mitacs.

Rob has provided leadership at Mitacs in various roles for the last five years and he's a passionate advocate for the role training and innovation must play in Canada's economic success.

I will provide an opening statement and Rob will be available to assist in answering questions, particularly those related to Mitacs' philosophy and activities.

First, here's a short explanation of what Mitacs is and what it does. Mitacs is a national not-for-profit organization that delivers research and training programs in Canada. Representing over 60 universities, it works with thousands of companies and both federal and provincial governments to build partnerships that support industrial and social innovation in Canada. We do this through research internships and skills training programs. We do this because these internships and other forms of experiential learning can integrate academic strengths with public and private sector innovation needs. They also give graduate students and post-doctoral fellows the opportunity to gain essential professional skills and non-academic experience.

Disruptive technologies are having a huge and positive impact on our Canadian economy. I'd be surprised if anyone you speak to over the course of this study would disagree with that statement. However, I'd like to use my time today to focus on two specific ideas that I see as critical to this discussion. First, I believe the vast majority of disruptive technologies are driven by advances made in fundamental research. Second, in order to maximize the impact that disruptive technologies can have on our society and our quality of life, we must also focus on the concept of disruptive learning.

First, we are surrounded by countless examples of applied science in our lives. There's no doubt that applied research and development is essential to the creation of disruptive technologies. Unfortunately, we sometimes forget that many of these had their origins in fundamental research. One such example is the way we exchange confidential information and communicate data. For this we need modern cryptography techniques.

It turns out that one of the most powerful encryption methods, which ensures in particular that important financial transactions are totally secured, was created in 1977 by three young mathematicians from MIT. Their research was in the field of number theory, an area of mathematics with results that are, for the most part, of theoretical interest. Today, this most secure data encryption system, which has fundamentally changed our lives in the way business is done online, exists because mathematicians indulged in pure mathematics without being concerned about the applications it might have in our daily lives.

The second idea I would like to touch on is what I call disruptive learning. Some of you may have heard of Sir Ken Robinson. He is an English author who argues that education systems should foster curiosity through creative thinking. He sees education as an organic system, not a mechanical one. He even claims that our current education system is archaic and outdated.

While we don't necessarily endorse all of Ken Robinson's ideas, we are challenged by them. Given that we all live in a technology-driven world, one that would have been unfathomable even a generation ago, doesn't it make sense to reconsider or at least re-examine how people are being educated? I would suggest that it's at least worth asking the question: can we do more to provide broader and more relevant training experiences and opportunities for our children and students?

This idea of embracing a new disruptive education paradigm is likely beyond the scope of this committee, but it's an important concept nonetheless. What is relevant, however, given the ongoing changes in technology and how it is used, is the question of how we invest in talent and in Canada's greatest resource, its people, in order to take full advantage of the disruptive technologies that exist today and that will exist in the future. We need to reconsider how we train and teach our students to function optimally in a world full of disruptive technologies.

Mitacs gets this. By delivering programs that look at research and experiential learning in a different way, they are demonstrating that they get how innovation really works.

I understand that in previous meetings you discussed the importance of investing in disruptive technologies, and that is clearly important. The question of which ones are worthy of such investment is far harder to answer. However, we at Mitacs believe that even more important is investment in talent and the training of our next generation of innovation leaders. With support from the federal and provincial governments, Mitacs delivered more than 3,000 internships across the country last year, and with the commitment in the recent federal budget we are on track to double this number by 2020.

Let me take one minute to tell you about one recent Mitacs funding recipient, Andre Bezanson. While impressive, Andre is by no means a unique case as Canada is full of young, ambitious researchers like him. Andre is a Ph.D. student in the school of biomedical engineering at Dalhousie University. His research focuses on developing technology to miniaturize ultrasonic probes to about the size of a pencil eraser so that they can be used for endoscopic imaging applications.

During his undergraduate degree in mechanical engineering, Andre discovered a passion for the engineering design process and for being able to see a project evolve from an idea to a tangible product. As part of his Mitacs-funded internship, Andre worked with Daxsonics Ultrasound Incorporated to develop high-frequency ultrasonic transducers and electronics for use in medical imaging. This new technology was adopted by Daxsonics and Andre was offered a key position in the company as a result of the success of this work. Upon completion of his degree he hopes to turn his new technology into a commercial product, opening up benefits of ultrasonic imaging to new clinical applications.

Andre's story is an example of how internships can have a profound impact on students and their success by expanding the way they learn. By investing in new models of experiential learning, we indirectly promote the creation and development of disruptive technologies.

I believe that the integration of experiential learning in graduate studies can change the landscape of research and innovation in Canada in three main ways. First, it builds collaborative research projects to leverage academic strengths and boost the innovation activities of the partner organization. Second, it expands the scope of research and development opportunities on Canadian university campuses. Third, and perhaps most important, it supplements traditional scholarships and training with experiential opportunities designed to expand creativity and innovation.

At Mitacs we use experiential learning to address complex issues and research challenges. At the same time, we provide Canadian students in post-docs, just like Andre, with opportunities that will broaden their skills and research experience.

We applaud the efforts of this committee in tackling such a challenging and complex issue. It will only be through such collaborative and cross-sectoral efforts that we can take full advantage of disruptive technologies here in Canada.

Indeed, there is a role for all of us to play if we truly hope to harness the power of disruptive technologies, and properly prepare our young Canadians to use them to their full potential and to develop the disruptive technologies of tomorrow.

Thank you for your attention.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. De Koninck.

Now we move on to Mr. Di Bartolomeo, please, for six minutes.

[Walter Di Bartolomeo, Vice-President, Engineering, Pratt & Whitney Canada]

Thank you, Mr. Chair and committee, for this opportunity to speak today.

Disruptive technologies are an important element but not the only element of an innovation process. They can lead to true breakthroughs in the design, function, and costs of products, and contribute to significantly increasing our competitiveness. They must be recognized and even encouraged as part of a company's, an industry's, and a country's innovation strategy.

That being said, I'll take a few minutes to provide a brief overview of our strategy at Pratt & Whitney Canada, which has led to a number of game-changing products and technologies that we like to say spark the imagination and move the world. Over 87 years, we have demonstrated a deep commitment to research and development. This has enabled us to emerge not only as a world leader in our markets but as a key player in the development of Canada's aerospace industry. We've produced 85,000 engines to date, and more than 50,000 are still in service today. We have 12,000 operators around the world, in more than 200 countries and territories—probably more than recognized by the United Nations, at that.

Every second, a Pratt & Whitney Canada powered aircraft takes off or lands somewhere in the world. These flights have a real and positive impact on thousands of human lives each and every day: humanitarian missions, emergency medical services, search and rescue, reuniting families, and creating jobs, to name a few. To that end, it must be realized that the most critical characteristic of the product that we design, produce, and service is reliability. As part of the flying public, we, our families, all count on successful flights every day.

To that end as well, we operate in an industry framework that is highly regulated—appropriately so—and for which the time scale for demonstrated innovation is measured in many years. In the last 25 years, we have successfully certified and brought to market over 100 new engines, a record that is unmatched in the industry. We've also forged strong R and D collaborations with universities, research institutes, and other partners across Canada to develop these technologies and products. No fewer than 9 of the 13 research chairs supported by NSERC in aerospace are in association with Pratt & Whitney Canada.

On our innovation journey, we've also been able to count on the support of the Canadian government and Industry Canada, which have shared our vision to build a strong and prosperous aerospace industry. These investments in cutting-edge materials, high-efficiency technologies to enhance engine performance and reduce fuel consumption, and combustion systems to reduce noise and emissions are a big part of our development.

We're also creating world-class centres of excellence for advanced manufacturing. These will be dedicated to manufacturing highly complex components and to supporting small and medium enterprises. The unique high-strength properties of the very complex materials that are used require fully integrated and ultra-efficient production lines equipped with automation, closed-loop process control, and high-precision machining technologies.

If we look back, our very first engine, which was first delivered in 1963, was the iconic PT6 engine. It was developed after numerous false starts, and at one point we had well over the net worth of the company invested in the program. That engine was game changing, and it was a step up from the traditional piston engine powered aircraft. It essentially created a new brand and market. Since that first model, we've developed more than 50 variants, and within the same size of engine we have increased its power by more than 400%.

Disruptions in markets can also lead to opportunities for innovative technologies that are technology ready. This was the case in the mid-eighties, with our PW100 turboprop market. In the eighties, we shifted direction in response to opportunities opened by airline deregulation in the United States, a deep economic recession, and a big spike in aviation fuel prices. These factors suddenly made fuel-efficient turboprops more competitive vis-à-vis jets, and we were there to leverage that. Today, those engine families are by far the leaders in that market.

Finally, I'll talk about the example of one of our most powerful disruptive technologies, and it's in our newest engine family, which is called the PurePower PW800. The genesis of this engine is the revolutionary and disruptive geared turbofan or GTF engine that powers the C-series aircraft. It was developed in concert with our parent company, Pratt & Whitney. This disruptive technology suite was more than 15 years in the making, and it reflects the rigour of effort, development, and validation that is sometimes required for flight critical technologies.

In the aerospace industry, disruptive does not necessarily equate to fast. Nevertheless, the geared turbofan increases efficiency and delivers significantly lower fuel consumption, emissions, and noise. The advances in aerodynamics, in materials, in combustion, will set a standard for many generations to come.

I'll speak more generically about disruptive technologies. They have an important place in our value stream, whether it's engineering, manufacturing, or services. However, there are many barriers to adoption, particularly in engineering and manufacturing, due to the regulation I spoke of, or market and economic contexts.

While fuel burn performance will continue to be a key indicator in the future, speed indicators such as speed in design, speed in manufacturing, and speed in service are dramatically evolving. Key future focuses will include disruptive technologies that address speed in manufacturing, for example, and we hear a lot about 3-D printing as an example of a dramatic evolution in such technologies.

You just heard about innovation and the Internet of things. Speed in customer service is another example where customer feedback and problem-solving will turn a new leaf with social media, and customer data will be transformed with evolving intelligence and predictive analytics for revolutionary service, offering a more connected world.

With respect to the basic propulsion technology, we firmly believe that we're starting to be at the cusp of cheating physics, and as such disruptive technology at this end will be more a rethink of the aircraft's system and architectural optimization. Though still very theoretical, the future is bright.

To conclude, it should be clear that Pratt & Whitney Canada has no intention of resting on its laurels. We already are well into the design of a new turboprop engine to replace that engine we started in the mid-1980s. We have several disruptive ideas still on the drawing board, from more electric solutions to significant architectural design innovations targeting 35% fuel burn improvements over current architectures. To put the number 35% in perspective, the industry considers that a 1% per year improvement in fuel burn is a general measure of successful innovation.

The future holds plenty of opportunities for more disruptive innovations. If we remain flexible in our technology choices, encourage our academic institutions and industry to collaborate closely, and continue to promote our industry, we'll continue our legacy of innovations and successful products and services within the country.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Di Bartolomeo.

We're going to go to rounds of questions now. We are absent Liberal members, colleagues, so maybe I'll just warn you that I might shuffle it up a bit if no one still arrives so we make our meeting more streamlined. Maybe I'll give Ms. Papillon a warning that I may put you in a Liberal slot if nobody shows up. Right now it'll go Lake, Ashton, Gallant, a Liberal member if they show up, Carmichael, Papillon, Daniel, Masse, and Maguire. But like I said, that will shift if no Liberal member shows up.

Mr. Lake, please, you have nine minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Sounds good. Thank you, Mr. Chair.

Thank you to all the witnesses.

I'm going to zero in, if I can, on Mr. De Koninck. I was interested in all of your presentation, but there was specifically a small part of your presentation that caught my attention, that education should be organic, not mechanical. I thought that was an interesting statement. Given the nature of the panel that we have, I'm curious as to what the research actually shows on that statement or where we ought to go in terms of education.

[Dr. Jean-Marie De Koninck]

It's not me who says that, it's essentially Kenneth Robinson. He sees education as a more organic system instead of a mechanical one. We might say today that the education system is very rigid. It tells you at what age what you should learn and so forth, and it doesn't give much room to manoeuvre in innovation, for instance. There's not much room for innovation.

He gives a specific example of a study that was done in kindergarten. They examined the creativity potential of kindergarten students, and they realized that 98% of the kids were showing signs of creativity. They followed those kids along their school education evolution. In primary school they started with this potential for creativity. Then in high school it was down to 20% or something of the students instead of 98% who showed signs for creativity. That's why he says that education systems should be reconsidered, re-examined, to allow more room for the potential of creativity.

It's my interpretation that in the schools you're told, you have to learn this, you have to do that, but don't do that, and so forth. You have these kinds of balises. You have a path that guides you through the system and kills your creativity in a sense. Maybe we don't endorse that completely, but we should be challenged by that and saying, “Can we do better?” Can we allow some time in school for activities that exploit the creative potential of these kids? That's what we're saying.

Maybe you want to add to that, Rob.

[Robert Annan, Chief Research Officer, Research and Policy, Mitacs]

Yes, maybe I'll just layer on top of that the Mitacs' perspective.

I think traditionally our university system has been set up to produce professors, especially as one moves through the graduate system. That model has always existed. The reason you're doing Ph.D.s is to gain the scholarship and deep knowledge necessary to then ask a professor if could it be done on the research side and pass that information on to the next generation.

The reality is that the vast majority of Ph.D. holders, not just in Canada but worldwide, don't become university professors. They contribute in very meaningful ways to society through acting in management and industry, contributing to R and D in companies, and acting in government and the social and not-for-profit space. What they've learned doing that Ph.D. is very useful and contributes productively to society but we haven't yet reflected that reality in the training they receive.

What we've been trying to do at Mitacs, with some success, is to layer on top of what exists that works really well around scholarship and deep learning to open up alternatives and different sorts of pathways so that students can see that what they're learning has applications in the private sector, in the not-for-profit sector, and that they can take their research and apply it in a variety of ways and not simply in the traditional academic path.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I don't know if anyone else wants to weigh in on this, but I know some of you would be employers or companies who are employers. How does that thinking impact the type of person you're looking to hire or get involved in your industry moving forward? How would that change things for you?

Do you want to weigh in on that, Walter?

[Walter Di Bartolomeo]

Sure.

For one, perhaps a bit more generally, certainly the encouragement of STEM programs, early learning, high schools, and the like, and getting the industry to be involved in such things to encourage young individuals to like the sciences, I think is a way forward.

In terms of the implication of industry in school systems, FIRST Robotics is an excellent example of a program where universities, collectively with industry, get in and just encourage young individuals. To your point of being able to understand the type of individual you want to hire, I think what has worked well in the aerospace industry over the last 15 years is to forge and push curriculums to be more in line with what the industry would need.

The last thing is that if I look at the last 15 years, we have more Ph.D.s working on the shop floor than one would expect. That's because of the science of manufacturing and the materials we use. The advances in the technology around manufacturing means the level of science on the shop floor requires Ph.D.s, which is not something you necessarily would have thought of certainly when I started in this industry.

Those are three points.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you.

Robert.

[Dr. Robert Walker]

I've observed that companies that succeed today have two types of individuals. They have deep subject matter experts. They also have people with the skills to look in an integrated way at how ideas come together to make a difference. The space of entrepreneurship tends to be on the latter. The issues that I highlighted span the constructive side of disruptive technology, and the negative side of disruptive technology needs those spanners.

Our education system has been tuned to deliver the former. Can our education system also be tuned to deliver the latter or is that only a skill that can be developed through practice, through the actual conduct of the business?

I think that's a bit of an open question. My observation is that people tend to demonstrate with time in a career that they have the attribute for the second, and great companies identify that quickly and put those people into those roles quickly.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It's interesting because I think that's what Mitacs tries to do. That is, take people with that expertise in a specific subject matter but give them life experience working with a variety of different organizations that might broaden their horizon a little earlier in their progress.

Karna, you wanted to weigh in on this too.

[Karna Gupta]

Yes.

I think one of the things we're finding in our sector is that the industry is getting more involved with academia to design what's needed. We are involved in a process of developing a national occupational survey as to what type of skill set young people should have going into the workforce. There are certain programs, when you specialize in cybersecurity or anything else, where it's not only the technology but also the infusion of business understanding that is needed because at the end of the day you're trying to solve a problem and it requires both sides.

More and more we're finding out that by having these surveys we're creating programs and learning outcomes with universities and colleges where kids will learn not only the technology side but also how it's applied from a business point of view. That program is quite active with the government's help. We're now rolling it out to 50 additional universities and colleges. It's called business technology management. It brings together the technology and business issues through national occupational surveys with the help of the ICT sector.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It's interesting. Actually, I had a whole bunch of other questions, but we kind of get on that path sometimes.

I think as a parent of two kids.... I have a sixteen-year-old daughter who is just brilliant, and she could do anything she wants to do. I've taken her to see the WISEST program, the women in the STEM areas, because I want that world to be open to her. I want her to look at all of the options and understand everything that's available to her.

On the flip side, I have a 19-year-old son with autism, who is in many ways like a three-year-old or four-year-old in a 19-year-old's body. When you take a look and give him an opportunity to contribute, he has skills and abilities that are hard to find sometimes but that we need to take advantage of.

You got me thinking along those lines in terms of what you had to say. Thank you for that.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Lake.

Now we'll move on to Ms. Ashton for nine minutes.

[Niki Ashton, NDP, Churchill, MB]

Thank you very much.

Thank you to all of our witnesses for coming forward and sharing your expertise with us today. I'd like to direct my questions for the most part to Mr. Gupta and Ms. Hutchinson with regard to the work that you do.

Given that we're not here to just conduct this report but to formulate recommendations, and hopefully take these recommendations to the implementation stage, I'm wondering if you can speak to the situation today in terms of government support for start-ups in IT. Is there more that can be done? What can be done with respect to attracting investors and inventors to our country?

[Karna Gupta]

Thank you for the question.

I think if you look at the Canadian ecosystem from an information technology lens, if you use that lens to look at it, there is no shortage of innovators or entrepreneurs starting in business. Where we get into some issues as a Canadian sector is that we are unable to build companies of scale and size, partly because we're still a growing nation. We don't have the necessary infrastructure support and everything in place to help companies grow in scale.

Our market is very small. For any technology company to be of capacity and survive, it must have a global footprint. There is no such thing as “just a Canadian market” once you start to do that. We have always been tied to the north-south trade, which is the U.S., and it's a big market. But as the winds of trade change and east-west becomes more important, and the rate of growth is much more sharp in some of the emerging economies, it is necessary that we provide our companies with the tools and infrastructure to grow and enter those emerging markets.

On what is needed, we need to have the skill set, the talent, that can build the companies and grow companies of scale. It needs the funding, so it needs the capital market available to them as and when they need to grow, from working capital and everything else. Finally, it needs the access to the right market.

We need to use all of the tools that the government and others can marshal to help this company to the actual market. At the end of the day, the question you posed really comes under the three, what I call blood vessels that make a company successful: access to capital, access to market, and access to talent. For the first part, I think we need to address them from those perspectives.

I think more could be done. We have appeared at multiple committees in terms of IP regime in Canada, innovation culture in Canada. I think a lot needs to be done.

[Niki Ashton, NDP, Churchill, MB]

You mentioned infrastructure, and I know in your presentation you referred in part to broadband access, which of course is an immense challenge in large swaths of our country. I'm wondering if perhaps you could elaborate a bit. When you speak of infrastructure, where do you think the government could play a greater role?

[Karna Gupta]

I think the rural and remote broadband would be important to drive the innovation culture. In a technology sector, people don't go to jobs; jobs go to people. We need to get to the people where they are.

In a Canadian context, where most of our population is urban, around the cities and down the 49th parallel, I think the core population does have the broadband structure. But we are leaving out big parts and swaths of the country that we can't touch on. Particularly given the skill shortage, we need to find a way to touch on the aboriginal and northern population youth. To get to them effectively, we need to have a proper rural and remote broadband infrastructure and the plan that goes with it in terms of deployment and investment.

[Niki Ashton, NDP, Churchill, MB]

On that note I represent a northern constituency and a number of the communities I represent do not have access to broadband. It's truly a daily struggle for something as basic as kids accessing the kinds of opportunities online that any other child in another Canadian community would have. Unfortunately while initial commitments were made in terms of the physical towers, that hasn't materialized in broadband connections the way it should have.

I do want to note, however, speaking of Pratt & Whitney, there is a highly technologically intensive operation in our region, a cold weather testing site, just minutes from my home. I think that's an example of a positive investment, and all levels of government were part of that in connecting IT opportunities in northern communities in a much greater way.

Mitacs, thank you for your presentation but also your insight into what we could be doing with respect to education. Obviously the federal government is more involved on the research intensive front and we see the need for greater involvement in post-secondary education and restoring dedicated funding on that front.

I wonder if you could perhaps speak to how to create a culture of innovation that encourages both basic research and commercialization. Is Canada able to strike a balance? How can we do that without giving preferential treatment to commercialization, for example, over anything else?