ACQUIRING KNOWLEDGE AND EXPERIENCE
Innovation may be the key to business growth but human capital is an important part of an innovation strategy. Innovators are much more likely than non-innovators to emphasize a human-resource policy that develops skills with training programs. Innovators place greater emphasis on the contribution that their workers' skills make to the companies' growth and believe that they have a better labour relations climate. While training is an important complement to the innovation process, it is not the only area where innovative firms develop special capabilities to support their technology and new product strategies.
In the high-tech industry, skilled individuals are much like capital - there is never enough.
Over 79 per cent of the most innovative group provided training for their workers, compared to only some 36 per cent of the least innovative group. The emphasis on training differs across industry sectors. In manufacturing firms. . . human capital improvement is closely linked with the technological and R&D innovation strategy of the firm. In the service industries, knowledge itself is the product and human capital is the dominant form of capital. . . In the service sector, the human capital strategy is the innovation strategy.
A growing number of our firms. . . are telling us that the number one constraint they face in terms of growth is access to critical skills. . . That's not where the raiders are coming at us from. They're coming at our seed stocks, our young graduates coming out of universities who are not finding jobs in this country that are perhaps as well paying as they'd like and who are very attractive recruitment targets for offshore firms.
As well as hiring skilled workers, the Committee heard that high-tech firms have to provide a workplace that stimulates their creativity.
[T]o create these kinds of environments, we need to develop new kinds of managers, re-educate and retrain managers, who are comfortable in operating and understand how to operate these empowered creative processes without losing control of the whole place at the same time. Sometimes when they impose old command-and-control techniques, they kill the underlying process.
The Committee heard repeatedly about the shortage of highly skilled personnel in the high-technology areas as well as the extent of the brain drain. Some participants indicated a concern with the lack of general understanding and awareness of the national system of innovation and of the relevance of S&T for the future growth of the country.
The perception still exists that science is too difficult and therefore only the fittest or the smartest or the most hard-working need apply. Thanks for TV kids to educate themselves at the feet of professional athletes and pop entertainers with glamorous lifestyles and colossal earnings. . .
One year out of university, the highest average wages go to professionals in health, engineering, math, computers, and the physical sciences. Yet, despite prospects of superior earnings and employment, the percentage of bachelors' degree awarded in science and engineering is declining. This is a real problem for our technology-based companies because as we know, human resources represent the raw material upon which we can face international competition and build a stronger economy.
If you ask students why they go to university, some will talk about getting a broader understanding, some will talk about learning a broad amount of things, but most will say it's to get a job. We're not providing them with the fundamental input to show that if they go into the following areas their likelihood of getting a job is x; if they go into these other areas their likelihood of getting a job is y. Today in Ottawa alone there are 2,000 teachers on the waiting list to become teachers who have no hope of becoming teachers. It's wrong. We've deceived them. We've wasted our funds and we've hurt our future. We need to address that. . .
[T]he R&D personnel per thousand in the labour force has basically been flat. . . Brain drain is a real concern right now. . .
The problem with that is last year there were 30 Silicon Valley companies recruiting at that school. This year there will be 100 Silicon Valley companies recruiting at the University of Waterloo to take those graduates south of the border. We have a 20,000 shortfall in the type of people we require to grow the industry. The more of our best and brightest who are drained off to the United States, the more difficult it's going to become for us to succeed. . . In the short-term, allowing people with those kinds of degrees to immigrate to Canada from countries such as India, Russia and China has helped, but in the long-term the country has to address the fact that we're still producing 2,000 teachers a year who have no jobs and we have companies that can't find computer scientists and electrical engineers. There's a discrepancy in the system and it needs to be addressed. . .
[W]e spend huge amounts of money on very good research done by very competent people and that sits on shelves and never gets out, never gets to the market. This is a major problem..
[O]ne of our members in Vancouver was losing people he had trained for two years. These are graduate software engineers who spent two years in training and were being hired away to jobs in Washington and Oregon at a 25 per cent to 30 per cent higher salary and a $50,000 signing bonus.
As well as making use of co-op education, some large firms were attempting to better integrate industry and education, and make science more attractive to women. It was pointed out to the Committee that smaller companies do not have the resources or time to train their own personnel.
[University professors] can also bring people from the industry to give talks or even to lecture - creating that kind of incentive too is very important. The industry people come and give a couple of lectures to the students so they'll have a feel for what's available out there. It's very attractive for the students. It helps student retention in university because they understand what the industry is going to be all about and they can become more interested. . . Natural Sciences and Engineering Research Council of Canada (NSERC) has just created five new chairs for women in engineering in the country - original chairs - based on the work that NORTEL and NSERC have financed. . . [L]ooking at. . . the cultural issues in the schools and universities associated with influencing women to get into science and technology. We can do more of those; we can have the initiative expanded and put even more money into those chairs. . . You can expand that to have more people associated with the work those chairs are doing.
Those chairs are trying to understand two things. First, what are the cultural impediments in our society to women getting into those fields? The second aspect is what solutions can be provided in the environment we are facing right now? How can we work proactively in influencing, and how can we work on the existing base to change the way women are perceived, or the way they perceive difficulties?
A dynamic workforce will need to acquire knowledge and training throughout its working life.
The seamless educational system ties in to the whole concept of ongoing education, which our young people are going to need as they go forward in this changing world. The whole concept that once you get a diploma out of one institution that's it, you can't do anything with it, is really inappropriate and very wasteful in terms of the tax dollars that go into education.
How do you achieve the seamless connection between different institutions, as you put it, all of whom are fighting over a pot of money? Obviously their vested interest in this is in getting as much as they can for themselves, and unfortunately the victims of this battle are the students.
We have to do better than we're doing now. What I see around me at the higher institutions is the view that if we get more warm bodies sitting in our classrooms, we're going to get more of the pie.
We don't really care what we're teaching them, and we don't care if what we teach them is completely useless after four years, but we're getting a bigger piece of the pie. That's a fairly unkind way of putting it, but it's an example of the worst case of what can happen.
The Committee was informed that resolving the Year 2000 problem for computers will worsen the existing shortage of information technology personnel. Although the conversion of the software is not difficult, needing only people with older types of computer science skills, it will involve a great deal of work. Resolving this problem will require the equivalent of one year's programming output for the entire industry within the next 36 months. In addition, the skills needed are not those required for future work in information technology, and after the problems is fixed there will be no need for them. The Year 2000 creates a worsening of the shortage of qualified personnel. The cost to Canada of the conversion problems associated with the Year 2000 problems is estimated to be $30-50 billion.
Instead of doing work that will enable them to acquire these new skills that we'll need in the next millennium, programmers and software developers will be mired down in the reworking of existing technologies. Vital though it may be, the solution of the year 2k dilemma will only exacerbate our current skill shortages.