Technology and the Competitive Challenge

Mr. Seymour

Distinguished guests, members and friends of The Empire Club of Canada: It is my pleasure to welcome as our guest speaker today Dr. Douglas Wright, President and ViceChancellor of the University of Waterloo.

The university was established in 1957. Its founders faced the future with a total commitment to fostering university/ industry co-operation, as well as organizing the first cooperative educational programme in Canada.

Such a demonstration of courage was even more memorable when you consider that we were on the threshold of the turbulent Sixties, when the concepts of business and profits were considered sinful and any university/ industry co-operation unacceptable.

The word "courage" comes from the same stem as the French word coeur meaning "heart." Rollo May, in his book The Courage to Create, writes:

"Without courage, other values wither away into mere facsimiles of virtue... In human beings, courage is necessary to make being and becoming possible."

In the case of the University of Waterloo, it meant implementing new, creative directions in the university community. What has the courage of the founders and their successors produced in 28 years? A world-class university!

It has produced a university with more than 50,000 graduates; a current enrollment exceeding 25,000 students; Canada's first year-round university featuring 99 programmes in six faculties; the world's second-largest co-operative enrollment of 8,655 students; and computer-software licensing fees totalling $3 million in 1984. This exceeds the combined fees of the Massachusetts Institute of Technology and Stanford University. Its 800 faculty and almost 2,000 graduate students lead the nation in industry-sponsored research.

Moreover, the University of Waterloo has the largest engineering enrollment in Canada and the largest mathematics enrollment in the world.

Our guest today has the awesome responsibility of following his very successful predecessors, Drs. Gerry Hagey and Burt Matthews. But Doug Wright's scholastic qualifications, government, business and academic experiences, have prepared him well for his major position of responsibility.

Born in Toronto some 58 years ago, Doug Wright earned a Bachelor of Applied Science degree from the University of Toronto in 1949, a Master of Science degree from the University of Illinois in 1952 and, in 1954, while on an Athlone Fellowship in England, he received a Ph.D. from Cambridge University in structural engineering.

In 1958, he was persuaded to leave Queen's University, where he had been teaching civil engineering, to become the first professor and chairman of the Department of Civil Engineering at Waterloo. A few months later, he became the first Dean of Engineering at the university and, as such, was the major architect in the rapid growth of the faculty over the next nine years.

Motivated by a strong desire to broaden his knowledge, not that that was necessary, Doug Wright left the campus in 1967 to assume the position of Chairman of the Ontario Commission on Post-Secondary Education in 1969; a Deputy Minister at Queen's Park in 1972 in the social-development policy field and later in the Ministry of Culture and Recreation.

In 1981, he returned to Waterloo to become its third President. Although his accomplishments as President have been many, one of the most richly rewarding successes to date for Doug Wright has been the development of the corporate commitment to the university's Institute for Computer Research. We welcome those member firms able to join us at the head table today.

Dr. Wright is married and has five children. In addition to his academic responsibilities, he is a director of several corporations well as the Kitchener-Waterloo Symphony Orchestra and the Stratford Shakespearian Festival.

Ladies and gentlemen, it gives me great pleasure to introduce Dr. Douglas Wright, President and Vice-Chancellor of the University of Waterloo, who will address us on the topic "Technology and the Competitive Challenge."

Douglas Wright

These are extremely critical times for Canada. We are being challenged to develop new ways of doing things, to develop and adopt new technologies, to be far more innovative than we have ever been before.

In fact, we are being challenged to develop a whole new economic framework to meet the threat of much more intensive competition than we've ever seen before, competition coming not just from the United States or Western Europe, but from every corner of the globe. (Little wonder that we in Ontario have concerns about the free trade question!) We don't know what the impact of the new world economy may be, but we can be sure it will affect all phases of endeavour whether we look at our resource industries, manufacturing, or even the service sector.

As Walter Light of Northern Telecom noted recently, Canada's industrial position is "much less assured" than it has been for years. Alluding as well to our need for vastly improved productivity, he added:

"While we debate, contemplate, procrastinate and deteriorate, other nations are moving into, and securing, international markets we need as a nation if we are to survive, let alone thrive."

The crossroads at which we find ourselves may even deter- , mine our very survival as an independent nation. We either find ways of keeping up to date technologically or we fade' away as a viable industrial country.

Whatever happens, the evidence is clear that thus far we have failed to be sufficiently innovative. We have allowed some of our best minds to go unchallenged and unrewarded; our industrial sector is not sufficiently competitive; our balance of trade in manufactured products has been negative throughout most of the 1973-83 period and, as Ministry of State for Science and Technology publications have shown, the "largest components of this deficit are trade in high and medium technology." A recent Toronto Star article put the deficit at $12 billion a year, in the high-technology area alone.

What do we mean by "technology"? It's know-how and know-why. That's all.

What is fascinating is that some of the countries doing) best in know-how and know-why are also resource-poor. Technology-rich Switzerland, Japan and Germany come tol mind, and Korea may not be far behind.

Yet Canada, abundantly rich in resources, is technology-_ poor. We act like a giant Kuwait! We have come to believe that we can dig it up, cut it down, or pump it out, endlessly. We have depended for years, for our economic well-being, on our abundant natural resources and whatever secondhand technology our branch plants and a protected domestic economy have brought with them. We've been the victims of good fortune and complacency.

During my undergraduate days at the University of Toronto, just after World War 11, there was lingering fear and apprehension that the "dirty thirties" with all their hardships might return. What followed instead, was a 35-year period of almost uninterrupted growth. There were a couple of minor downturns, but, in general, we've had it very good. This has led us to become a nation preoccupied with social benefits and equity, the division of wealth, rather than with its creation.

By way of contrast, it seems clear that the key to success is coming to rest entirely on our ability to be innovative. Too many Canadians (and, let us keep in mind, governments depend on majorities to get elected) still believe we can have it both ways. That is, we will simply continue to enjoy the riches we've had these past 35 years and also, somehow, be spared from having to compete.

The naïvete we have developed over the last 35 years has given too many Canadians blinkers so we don't seem able to see the problems that confront us. We have been so smug so long, countries we termed "Third World" have leaped years ahead.

Malcolm Gissing, president of Hewlett-Packard (Canada) Ltd., said recently:

"The way Canada is going to shine in the future is through the application of high technology."

That does not mean that we are going to be just hewers of silicon and drawers of software; the issue is to use the new technologies to make the processes and products of existing industry more competitive!

What is the best way to go about developing and employing the new technologies and products we will surely need if we are to compete?

Our prime need is to develop and use our human resources. That means education and training, and research and development.

I believe that our universities can make a vital, essential contribution by providing an environment in which our young people develop in a way that enables them to reach their full potential. I am reminded of the words of the psychologist, Jean Piaget:

"The principal goal of education is to create people who are capable of doing new things, not simply recreating what other generations have done-people who are creative, inventive and discoverers."

Such an environment must include the traditional freedom to explore all kinds of ideas and investigate all sorts of phenomena, of course. But it requires, as well, that the universities keep in touch with the larger society. And this is best done through a variety of relationships. Universities are not ivory towers today, if they ever were!

Our experience at Waterloo is that such relationships benefit both parties. And they do not impinge upon academic freedom. Indeed, we find the business community as sensitive as we are with respect to academic freedom, because they recognize that it functions in their long-range best interests. At least, that is certainly the way I read the comments of the many business leaders with whom we work.

One of the most encouraging things I've observed recently has been the report from the Corporate Higher Education Forum, "Spending Smarter," by a committee chaired by Raymond Cyr, who is also chairman of Bell Canada.

This report discusses co-operation in research among business, government and the universities. It identifies the ~, problems as well as some apparent problems and shows how these could be swept away so better working relationships would evolve. I think it could prove a very seminal document. f

Now I have a very real concern, as I speak to you today, to tell you that the capacity of our universities, especially in Ontario, to contribute to the development of our young people has been impaired. The undeniable cause of this is our financial difficulties. But they are only the superficial cause. The root cause is, I believe, public indifference.

This is understandable. As long as people felt that our economic problems were not critical and that our resource riches assured our long-range well-being, they simply didn't have to take our universities and their problems seriously. The idea was, simply, to provide for the greatest number of students at the least possible cost. Thus our universities have come, in a way, to be instruments of social-welfare policy,

rather than what they should be: investments for our future economic well-being.

We ought, instead, to look at our universities as vital ingredients in a new effort to maintain our position in a world of increasing international economic competition.

Granted we have the right to ask our universities that they operate responsibly, meet certain standards, strive for excellence, and that they also function in close co-operation with industry.

But we Canadians really have to pay more attention to, and take better care of, our universities. We also have to insist that our governments show them more concern.

The politicians can probably be excused for taking the stance they have with respect to the universities. That is, for trying to squeeze larger and larger numbers of students onto our campuses at the least possible cost, with little real regard for the quality of the programmes provided. They have been responding to public opinion as they perceived it.

This is why I want to try to persuade each of you today to give some of your attention to our universities' very real financial problems.

We ourselves, in the universities, are at an understandable disadvantage when we take our case to the government; our views are discounted. But I would hope people such as you, who are facing the problem of what's happening to the Canadian economy on a day-today basis, would have some impact, if I can persuade you to join our cause.

Some encouraging statements have been made of late. The Hon. Gregory Sorbara, the new Minister of Colleges and Universities in Ontario, recently announced a new $50-million "university excellence fund" at the time of National Universities Week, last month.

He said then that the $50 million was just a "first step" and affirmed his party's commitment to post-secondary education in Ontario, a commitment, he said, the government is not going to abandon. He said:

--"Universities are a vital resource to current and future generations, but have suffered deterioration as a result of a decade of chronic underfunding."

We in the universities were very pleased with those comments. I'd like to say something more about that in a moment but, first, may I add one further thought in connection with the $50 million of special funding? It is fine and we are very appreciative, but it is still a very modest amount com; pared with what some other provinces are doing (let alone compared with what some other countries are doing).

For example, Saskatchewan recently announced a similar arrangement, $25 million additional to its universities each year for five years. When you consider that the population of Saskatchewan is only one-eighth the population of Ontario, you can see how great a challenge we face.

In Ontario, statements from the Premier, the Treasurer, and the Minister of Colleges and Universities may be encouraging, but what we must realize is how far we have to go.

Ontario is at least 20 per cent behind the average of the other nine provinces in its support to its universities, and it is probably, effectively, even worse than that because we have a higher proportion of students in medicine, engineering and graduate work than would be found in the others.

Moreover, it is not just that we are behind the rest of Canada; Canada seems to have fallen well behind other countries.

A U.S. publication recently reported on American state appropriations for higher education. Some of the increases in funding for state universities make interesting reading. For example, over the past two years, funding for state universities in California went up 31 per cent; funding in Massachusetts increased 31 per cent; in Michigan, 26 per cent; in Tennessee, 35 per cent, and so on.

One of the reasons the State of Maine increased its funding substantially was because, and I quote:

"University education is seen as integral to the development of the state's economy"

At the national level, in the United States, George A. Keyworth, science adviser to the President, has already led a major shift of resources from government labs to university research. For the second Reagan term, he proposed, and action is proceeding on, further university research funding at the national level. His statement of U.S. national objectives is: to help universities attract and retain faculty of the highest quality; to help with the generation of basic knowledge, especially in areas of particular importance to the United States' industrial competitiveness; to support broadly based interdisciplinary university research; to find better ways to stimulate the flow of ideas, expertise and people among federal labs, universities and industry, and to provide for more responsiveness to opportunities to support emerging technologies.

Similar initiatives are to be seen in Germany, France, the United Kingdom and Japan.

The reason those countries are investing in universities is simply that they have a clear view as to what the universities can contribute to economic development in a technological age. They know that they are simply not going to have microtechnology, biotechnology, and so forth without excellence in both teaching and research in the universities, and without constructive continuing relationships between their universities and business and industry.

I can assure you that our Canadian universities are willing to work with our federal and provincial governments, with each other, and with the industrial and business community to enable Canada to acquire and develop the technology we so badly need.

I'd like to tell you about our students who work on obsolete equipment in our teaching labs; about lab sessions where we crowd too many students around too few pieces of equipment; about upper-year classes with 70, 80 and more students when for optimum teaching impact there ought to be no more than 20 or 25; about a student/teacher ratio of 23 to 1, whereas in good universities in other countries the ratio is only about 12 to 1, and sometimes as low as 8 or 9 to 1. 1 can tell you about library budgets that have lagged, in universities all across the land.

But one of the most worrisome things of all is that we may be on the verge of a brain drain the like of which hasn't been seen in this country since the early Fifties.

Do you remember, in the late Forties and early Fifties, when some people graduating from our universities didn't even bother to look for a job in this country? They simply headed for the United States and never returned, except for vacations.

What we're seeing now is that some of the very best and brightest of our teachers and researchers are being lured southwards.

Toronto media paid some attention recently to the fact that our dean of mathematics has resigned to take up a post at the University of Tennessee (where, as you just learned, funding increases have been averaging close to 15 per cent per year). Here is a young (42), Canadian-born computer scientist, a brilliant researcher. He is, moreover, an excellent administrator, contributing significantly to the success of our Institute for Computer Research as well as to the success of our Faculty of Mathematics, which happens to be the largest in the world.

And now we've lost him. Since his resignation, two weeks ago, we have learned that we are losing two more computer science faculty members, two microelectronics experts from electrical engineering and an accounting professor for a total of six in just over two weeks! We're not unique; losses are being experienced elsewhere.

There is a massive new wave of support for higher education south of the border and it is going to make our problems even more difficult. The Americans, from President Reagan on down, have come to recognize that their universities can serve as important engines for economic development.

They, of course, have seen this happen already. They have

Stanford University and Silicon Valley. They have Massachusetts Institute of Technology and the development around Boston. And there are other examples.

It is often noted that Canada has no M.I.T. The reason is very simple. Our policies do not allow one to arise. If M.I.T. were picked up and moved to Canada, it would shrivel up and die.

In a talk given in the United States two years ago, Roland W. Schmitt, head of General Electric's research-and-development division, stated:

"Government has a crucial role to play in creating favourable conditions for commercial innovation, but not in actually producing those innovations. The most important step that government can take is to insure and strengthen the health of our university system in both the performance of basic research and the training of research manpower"

This is perhaps a particularly timely occasion for me to be speaking to you, because the subject of transfer payments will be on the agenda for the First Ministers' meeting in Halifax, tomorrow.

About 10 years ago, the federal government modified its support for higher education, which had been on a 50-50 basis with the provinces. At that time, the feds agreed to transfer their money unconditionally.

Because of -public indifference, about which I have already spoken, the Conservative administration here in Ontario applied a lot of those moneys to other purposes, with the result that in Ontario today federal government transfer payments cover almost 90 per cent of the total transfer from the province to the universities.

It is understandable that the federal government should be concerned about this large expenditure for which it gets no political credit, and for which it can expect no real accountability.

On the other hand, it would be very damaging to the provincial governments and to the universities should the federal government reduce these transfers. The universities are

therefore very concerned. We fear we may be whipsawed in the dispute between Ottawa and the provinces.

I believe the public interest requires the federal and provincial governments to find a basis for co-operation that will strengthen and not further impair the capacity of our universities to fulfill their responsibilites.

Now, if all this has sounded a little gloom-and-doomy, it should be noted that, while we are in a crisis situation at this point in our history, we also have before us one of the most promising, most exciting challenges one could possibly imagine, if we play our cards right. The high-tech era we're now entering holds forth much hope for us as Canadians.

As you know, when we speak about high tech, some of the buzz words often used include the "knowledge economy" and the "knowledge society" and we also talk about "computer communications," "robotization," "computer-integrated manufacturing," and so forth.

But it is starting to look as though the knowledge society is going to be still more sophisticated. Some of us visualize an environment in which computers will come to process information content in language, just as they now process information content in numbers.

You've surely heard of the so-called "fifth generation" computer technology and the effort Japan is putting into that concept. The latest news is of a "sixth generation" of computer technology, to arise from subjects such as philosophy, psychology, linguistics, logic and so forth. In short, technology based on ideas and language.

This is startling, perhaps, but just look how we take for granted now the notion of 250,000 or a million transistors on a tiny piece of silicon.

Technology is know-how, and know-why. Technology helps us do things that may not otherwise be possible. In the past, technologies came from our knowledge of physics, chemistry and the traditional engineering disciplines. Today, we have the promise of biotechnology-technology arising from biology and chemical engineering.

Twenty-five years ago, mathematics was a subject for a few people who wanted to be teachers. Today, mathematics is the basis for much of our modern computer science and technology. Tomorrow, surely, we will find commercially important technologies arising similarly from disciplines that seem esoteric and not very useful today.

What Canadian universities can do, and should be doing, is to provide explorations into such areas. The reasons for this are to develop our own expertise, and to keep us informed as to what is being done elsewhere. For while we Canadians can never hope to generate all the technology we will need in the future, we ought to develop what we can, and we ought to understand the significance of what is being developed elsewhere so we can use it and adapt it to our problems and opportunities.

One final comment with respect to sixth-generation computing and the "knowledge society."

As you may be aware, the University of Waterloo has recently become involved in the computerization of the Oxford English Dictionary. On the surface, this may seem an esoteric activity, but we are starting to find it has many extraordinary implications.

In order to computerize the world's most complete record of the English language, we find ourselves learning things about that language that no one has ever before truly appreciated. We also find that we are moving a step closer to the day of the computer that can deal in language, instead of in numbers alone. And, of course, we are learning about managing very large data bases!

I can't urge you, or other fellow Canadians, strongly enough to make sure this kind of activity is permitted to continue, to expand and to develop. If we don't, we'll surely have to buy more and more of our advanced technology from Japan, Korea, Taiwan, Switzerland, and goodness knows how many other countries. We simply won't have it here if we fail to finance our universities adequately to permit this work to continue.

And if this interest and this research potential are permitted to wither on the vine, we'll face economic difficulty in Canada such as we've never dreamed of before. That will be, to say the least, very disruptive socially. Frankly, if I were some kind of subversive and wanted to absolutely ruin Canada, I couldn't think of a better way to go about it: just destroy our country's technological capability in a world of high technology. I think it's that serious.

The appreciation of the audience was expressed by Maj. Arthur J. Langley, C.D., a distinguished Past President of The Club.