Christopher Wilson & Assoc.

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Location: Ottawa, Ontario, Canada

Tuesday, February 16, 2010

Economic Development in Ottawa

In reading Randall Denley’s recent comments[i] about Ottawa's economic development strategy being no strategy at all, I was once again struck by the fact the City just doesn’t seem to get it. It just doesn’t seem to understand that economic development in today’s globalized marketplace is primarily about intra-regional cooperation. That cooperation is essential to create a base of regional competitive advantage that can not be easily imitated by firms elsewhere. To create that regional advantage the City, as economic developer, must act primarily as a facilitator and broker to bring about the cooperation of others. It is not about divining the perfect plan or imposing it on local businesses and institutions.

Ottawa has no major resources of consequence to offer -- no oil, no iron, no timber, etc.. Ottawa is not a major port or transportation hub. Ottawa’s population ranks as the 483rd largest in the world -- not a particularly compelling size for a stand-alone market. Yet for its small size it does have a comparative advantage from a lot of well educated people. These people have also had a history of producing some good ideas, interesting technology and on occasion some very profitable businesses. However, these days talent, ideas, technologies, even business models can be easily duplicated or reverse engineered in 6-12 months. What that means is that there is nothing in Ottawa (aside from the federal government) that can provide even a modicum of lasting comparative or competitive advantage.

Nothing that is except the complex system in which we choose to organize ourselves as a community to deliver value. That system, technically referred to as a regional innovation system, includes:

  • how we develop, attract and retain talent,
  • our culture of entrepreneurship, of risk taking and of sharing resources and knowledge,
  • the incentives and/or disincentives we apply to businesses that may be tax or non-tax related,
  • the formal and informal links between our postsecondary institutions and businesses,
  • the quality and affordability of our homes,
  • our access to recreational opportunities and the attractiveness of our natural environment,
  • the safety of our streets, and
  • the overall quality of our life.

Such a multi-faceted system requires the orchestration of many activities and many interests. The City, unfortunately, has become confused in its development role. It has relinquished its brokering and stewardship role to facilitate development, in favour of assuming a leadership mantle to try and direct development. But in so doing, it often presents itself not as a partner in local economic development but as a competitor or sometimes even as an obstacle.

That some “industry leaders haven't been asked to help” should be of no surprise given Denley’s observation that “councilors seem to fancy themselves experts” in economic development. The thing about experts is that they have tin ears. You can’t tell them anything because they feel they have nothing to learn. And to experts stakeholders are a big nuisance. They are complainers, advocates, whiners, obstructionists and time wasters -- people who should just get out of the way and let the experts get on with implementing solutions. The idea that both councilors and bureaucrats style themselves as experts is fanciful. But that they then forget that they are supposed to be agents working in the interest of these same “stakeholders” is inexcusable.

As a consequence, stakeholders are generally not considered as real partners or potential co-creators of Ottawa’s economic possibilities. In all fairness, however, it is an attitude encouraged by many business leaders themselves who are of the view that the payment of taxes absolves them of any responsibility for attending to the future of Ottawa’s economy or community. But regardless of the cause, this attitude constrains innovation and effectiveness by limiting the understanding and the resources that can be directed at any given problem or opportunity.

The City does have a history with economic development partnerships, although not always a good one. In that history it is easy to point to partner disagreements, lack of trust, unproductive committee meetings, and stalled action and say piously “no more inefficiency”. But rather than improving its collaborative process so that common ground can be found among legitimate claims in conflict, the City seems to prefer conflict free zones and pabulum solutions.

For instance, to avoid potential conflicts in economic development, the City has been “seeking the advice” from exactly five people! While five people represents a workable management team, they can hardly be expected to represent the economic development aspirations of half a million workers and businesses in Ottawa. Nor can they be expected to make commitments on behalf of those same workers and businesses. Thus I suspect Rob Jellett was being a bit sardonic in suggesting that the developers’ recent complaints can be resolved by consulting them as "stakeholders". What difference will that mean? My guess is not much.

As we saw play out in the consultations around the Lansdowne Park development, this typically means that the City pretends to listen and the public pretends that their input will have an impact. Where stakeholders are involved, they are encouraged to act as advocates rather than as contributors to a shared solution, the better for the City to be seen negotiating tradeoffs in a zero sum game rather than in promoting local ownership, stakeholder learning, and shared commitment to synergistic outcomes.

On the other hand, if the City was honest about engaging people they might determine why, how, and under what circumstances business leaders and community groups might be willing to be engaged. Otherwise, the City will be unable to deliver the fundamentals of good engagement practice, which are:

  • ensuring adequate access to relevant information;
  • providing multiple avenues for people to engage in;
  • ensuring dialogue and a two-way conversation; and
  • demonstrating to citizens that they are actually being listened to.

Denley suggests that “There is no excuse not to listen”, but there is also no excuse to pretend to listen either. Why would anyone voluntarily waste their time in such an effort?

To really engage its stakeholders and the public, the City needs to believe that its business and institutional leaders have something valuable to contribute and it must be willing to treat them as authentic partners. It has been a while now since that sort of thing has happened in Ottawa.

As Denley described, Ottawa’s existing "strategy" is “a bunch of useless generalities”. Why? Because a targeted strategy requires a sense of future possibility, of where the community wants to go. No such vision has been in evidence in Ottawa for quite some time. We create visions and then disregard them. We establish principles and then ignore them. The City’s policy seems to be, “never let visions get in the way of expediency”. And this happens again and again because the only one making a commitment is the City or at least that’s how it is perceived.

What is truly absent in Ottawa’s economic development strategy is a sense of the shared possibility that must of necessity animate an effective economic development strategy. Such a vision is grounded in mutual understanding and implemented by the mutual commitments made among those who choose to live into that shared future. Such understanding, commitments and vision, only emerge from culturing a sense of belonging not from exclusion; from fostering ongoing dialogue among stakeholders not from shutting it down.

From this perspective, the City’s core economic development focus has to be grounded in efforts towards building a community -- because in the end it’s the community that will create the future. But as Caroline Andrew recently pointed out,[ii] "the leadership that makes other cities work is bigger than the public sector. It is a coalition with the private sector and civil society, which Ottawa doesn't have." The sense of togetherness is sorely lacking.

Diversification away from the federal government and developing an economic base founded on clean energy and environmental friendly technologies is a development choice and probably a reasonable one. But it will be a choice made by the people and businesses of Ottawa (if it is made at all) not by City councilors or bureaucrats. What the City can and should do, however, is invest more in the conversations between people that bring them together. Yes it may messy and it may take time. But it’s a necessary investment if you’re going to build a community rather than an infrastructure.

[i] Randall Denley, “Ottawa's economic development strategy is no strategy at all”, The Ottawa Citizen, Feb. 14, 2010

[ii] Mohammed Adam, “What's wrong with this city and how it can be fixed”, The Ottawa Citizen, November 16, 2009

Thursday, February 11, 2010

Post Secondary Education in Canada

Put a frog in boiling water and it jumps out immediately. Put a frog in cold water and gradually turn up the heat, and eventually it gets cooked.

In comparison to the breath taking nature of the recent economic freefall or fearfulness of the predictions of a climate change catastrophe, questions regarding the effectiveness or sustainability our system of postsecondary education (PSE) may seem positively straightforward for clearly they have taken a back seat. However, the slow but relentless transition taking place seems destined to leave us in the same place as the frog -- cooked.

In Saskatchewan, for instance, the Province has pulled funding from the First Nations University over concerns about governance at the school, including allegations of political interference from the Federation of Saskatchewan Indian Nations. Repercussions from the provincial move have now resulted in a withdrawal of funding from the federal government due to their clear lack of mandate to pursue matters of education independently.

The federal government has also axed two prominent national education bodies, reflecting a similar attitude of strict adherence to constitutionally allocated powers and withdrawal from matters deemed provincial or local – regardless of whether or not a national interest exists. Together the moves lessen the possibility of achieving a national voice on education, just at a time when a national voice seems to be most needed.

The most recent of these was the termination of funding for the Canadian Council on Learning (CCL), which since 2004 had tried to present a pan-Canadian view of Canada’s patchwork of provincial education systems through national programs of data collection and analysis. Not surprisingly, in one of its final reports, the CCL suggested that Canada lacked a national standard by which to judge post-secondary education because Canadians don't understand what "quality post-secondary education'" should be.

Earlier the government terminated the Canada Millennium Scholarship Foundation (CMSF) established by the previous Liberal government. Long criticized by the provinces for its unilateral implementation, it provided grants to low-income students and researchers. It will be replaced with a new (read non-Liberal) Conservative programme for low-income Canadians only.

Last fall many of Canada’s universities and colleges were upset by a proposal from five of the country's largest universities to concentrate funding for research and graduate studies with the biggest of Canada’s universities in order to make better use of public resources. Given that faculty at Canadian universities are expected be both researchers and teachers, it was felt that such a diversion of public monies to the already large institutions would weaken the quality of education for the majority of students who attend Canada’s many smaller universities and colleges. Some universities, like those in Atlantic Canada, felt that their entire region could be shut out of graduate studies if research dollars were not more evenly spent.

All of this of course is taking place on the background of a precarious economic recovery that is having important effects on both revenues and expenditures in the postsecondary sector, according to a recent report by the Educational Policy Institute[i].

The report, entitled On the Brink, warns that post-secondary education in
Canada is about to lose significant ground in terms of universal access and affordability together with its pursuit of excellence. The report identifies four major concerns:

  • "The collapse in equities affects institutions' endowments and pension liabilities thus reducing income and increasing expenditure in the short-term.
  • Two or three years out, significant cuts in government operating grants to institutions can be expected as governments try to bring budgets out of deficit which, in turn, will result in a number of challenging financial years ahead for universities and colleges.
  • The worsening of labour market conditions will affect student income and cause student aid budgets [and student debt] to balloon.
  • The real-economy recession will create new patterns of post-secondary attendance (rising college and graduate school enrolment; falling apprenticeship registrations) which will both raise institutional costs."

Consequently, PSE institutions will be faced with rising costs and shrinking budgets. They will "need help in the short-term to reduce their cost-base and diversify their revenues", according to the EPI. Without it postsecondary institutions are likely to see:

  • Hiring freezes for full time staff;
  • An increased use of part time and sessional staff, which already dominates baccalaureate education;
  • Larger class sizes;
  • Reductions in graduate scholarships;
  • Cuts to library spending; and
  • Deferred maintenance on buildings and equipment.

That’s not all, however. The recent recession’s impact will only be the opening salvo in a longer term squeeze on PSE institutions, because of the broader socio-economic shifts that will accompany the retirement of a large cadre of baby boomers – a shift that will further tighten government budgets, budgets that are in hock for at least a decade as result of spending their way out of the recession.

Proportionally fewer fulltime workers will be paying taxes and more retired people will be claiming higher health care and pension benefits, a combination that is very likely constrain governments from re-investing in post-secondary education. Education may well become a second tier priority. In fact, the EPI suggests that we are now entering an “era of permanently declining per-student revenues”.

Postsecondary education has become what
Rittel and Webber referred to as a ‘wicked problem’[ii], as there is no clear understanding of the nature of the PSE problem, how its contributing factors all fit together, or even the end state that PSE should deliver to us. Nor is there a clear understanding of the means by which PSE can deliver what we might want. Both the problem and its potential solution are constantly evolving and consequently both means and ends must be learned simultaneously.

This is ultimately and ironically the challenge of Canada’s post secondary institutions – how to shift them and the network that they collectively comprise into a learning system.

How do you do that? How do you entice or compel organizations which by nature are competitive in their pursuit of public and private resources? How do you align their individual organizational interests with those of students, communities and Canadian society as a whole? How do you encourage their cooperation to achieve a greater collective benefit while discouraging the self-interested, rational action and the social traps that that type of behaviour may produce?

The recent Ontario report, Academic Transformation[iii] by Clark et al., is clear in its assessment that the combined PSE focus on accessibility, national productivity, limited resources and quality education is fundamentally “not sustainable”. Paquet, in his treatment of the Ontario situation as a governance failure[iv], suggests that to accommodate the diversity of expectations regarding post secondary education, governments must let go of their adherence to a formulaic delivery model – ie. all universities are the same, all colleges are the same – in favour of a more variegated and localized system that is capable of making best use of local advantages of resources, talent, needs, and knowledge. What both say must ultimately give way is the concept of autonomy for PSE institutions in favour of “government action to ensure appropriate capacity, structures and processes”.

While the governments of BC and Alberta seem to be making small steps towards fostering the requisite variety in PSE, Ontario and the other provinces remain securely in thrall of that bureaucratic mindset that mistakenly presumes universal access and equality of inputs are the same as the equity of outcomes – the latter being so much harder to regulate. Yet even granting the progress in BC and Alberta, is the solution of PSE reform simply a matter of finding the ‘right’ leadership to see the wisdom of additional intervention in PSE, and the willingness to impose a redesign of the system on recalcitrant institutions? In my mind, that puts a lot of faith in government to do the right thing, something the vast majority of Canadians seem to lack[v].

As it is there is no national public strategy around education and, as the CCL has reported, no clear definition of what quality education is or how it should serve the public interest. The voices and interests of students, citizens and communities remain peripheral to the focus of policy formation which itself remains dominated by budgetary concerns, ideology and the educational flavour of the month. Where stakeholders are involved, they are encouraged to act as advocates rather than as contributors to a shared solution, the better for governments to be seen negotiating tradeoffs in a zero sum game rather than in promoting stakeholder learning, local ownership and synergistic outcomes.

I would suggest that confidence among PSE leaders that governments can make the right choices in this regard is not high, to say the least. Political agendas are purely political and dominated by political positioning. They are not about solving problems, educational or otherwise. Political elites no longer speak out for public education but for the narrow interests that elect them. The public sector, obsessed as it is with top-down consultation and the manipulation of public opinion, demonstrates little capacity to authentically engage people and institutions across diverse and often competing interests. Even when governments are seen to act, it is generally for the short term. And unless you are one of the handful of Canadians that belief in government infallibility, the general perception is that governments are incapable of continuous learning or even to recognize honest mistakes, making the possibility of incremental progress on PSE almost unrealizable.

Our traditional system of Westminster democracy has proven to be inadequate for the type of complex challenge represented by reform in the PSE sector. Due to its adversarial nature, governments refuse to establish priorities or to make choices for fear of providing hard targets for the opposition. In addition, the stewardship role of public servants, long seen as the last bastion for the protection of the public’s interest, is increasingly being eroded and the provision of service to citizens is rarely a priority. Said one college executive recently, “I have never heard in any discussion among public servants the idea that citizen interests should be foremost”. Instead, careerism has become the predominant public sector ethos.

While many people in big governmental bureaucracies may claim to be in control, especially at election time, there is no one who is really in charge[vi]. And if no one is in charge, who is it then that can impose systemic change on PSE in a way that can make the best use of resources to pursue the shared goals of society? It would seem that even though Clark et al. have accurately identified the key problems in the PSE sector and even the necessary reforms, their reliance on governments to provide the vital leadership seems a bit of wishful thinking.

However, the corollary of the “no one is in charge “view is that everyone is. Let me say this again to let it sink in. If nobody is in charge of the PSE sector – that is, not politicians, ministry bureaucrats, college and university presidents, faculty, business nor community groups – then they all are. Since they are all contributing in some way or other to the status quo, they can all begin to contribute to a solution. To rephrase a popular slogan from the 60s, “if you’re not part of the problem, then how can you expect to be part of the solution”. This means a solution, if it is to be found, can begin with any of them. They don’t have to wait for someone else to fix things for them. All they have to do is start.

As simple as it sounds starting begins with a conversation. Given that a community fundamentally takes its shape from the conversations that take place within it among its citizens and residents[vii], if you want to change any aspect of a community you need to change the nature of those conversations. The critical question for PSE reform, therefore, lies in the ability to foster an authentic dialogue across many communities on the role, value and nature of quality education.

In this regard PSE institutions have a distinct, initial advantage over governments, businesses and even not-for-profits because they retain significantly higher levels of social trust. They are more readily accepted as neutral brokers and as social conveners. But most importantly, it is in their very nature. Just as water wets, PSE institutions are places where ideas may discussed, debated, challenged, and even turned on their head.

So while Clark et al may be right in assuming that post secondary institutions will not change of themselves, given the incentives of the system and the very intense competition for resources, they may very well be in a position to foster the necessary dialogue to shift conversations to a level where supportive governmental action can then become possible.

That process must of necessity be a collaborative one, one that inspires joint ownership and shared possibility. It must also be able to envision a future for PSE institutions that they, students, parents and communities would want to live into. And with that process governments would have no option but provide support for PSE reform for fear of losing their own legitimacy.

As one provincial Deputy Minister commented to me, “What holds us back as a society are the people at the margins – the poor, the uneducated or illiterate, the people with ill health. If we can develop local solutions that are more effective and cheaper at reaching those on the margins our society will benefit immensely.” But my sense is that responsibility for that challenge rests primarily with PSE institutions and their ability to catalyze the conversations that can reshape what we think is possible.

This week Canada is open to the world as host of the 2010 Winter Olympics. For the next few weeks we will be inundated with the experiences of those who have pursued excellence to its limits. It is an attitude we urgently need among all our post secondary institutions. Bronze is not good enough in today’s world. We need to go for the Gold!

[i] Alex Usher and Ryan Dunn, On the Brink: How the recession of 2009 will affect post-secondary education, Educational Policy Institute – Canada, February 2009

[ii] Rittel, Horst, and Melvin Webber; "Dilemmas in a General Theory of Planning," pp. 155-169, Policy Sciences, Vol. 4, Elsevier Scientific Publishing Company, Inc., Amsterdam, 1973.

[iii] Clark Ian D., Moran, Greg, Skolnik, MichaelL., Trick, David, “Academic Transformation: The Forces Reshaping Higher Education in Ontario” McGill-Queen’s University Press, Montreal/Kingston, 2009

[iv] Paquet, Gilles, “Ontario Higher Education as Governance Failures”, Optimum Online, March 2010

[v] EKOS Research, Trust in Government, 2008

[vi] Cleveland, Harlan, Nobody in Charge, Jossey-Bass, San Francisco, 2002

[vii] Block, Peter. Community: The Structure of Belonging, Berrett-Koehler, San Francisco, 2008