Innovating a Brighter Future

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Thank you very much, Ian, for that introduction.

I can’t believe you made all that stuff up, but… It’s your Chamber…

I am genuinely delighted to be with you all today.

Thank you for inviting me.

Ian, your leadership of the Chamber, and the leadership of your chairman Brian Bennett, have been invaluable to this community.

The Chamber’s advocacy for local business is a very important voice in Waterloo Region. When you consider that small-and-medium-enterprises, or SMEs, employ nearly two-thirds of private sector workers in Canada… The importance of your collective contribution to Canada and Waterloo Region’s prosperity is crystal clear.

That’s why the University of Waterloo considers the Chamber to be an important partner.

Our work together so often overlaps; and so does our vision for an innovative and prosperous Waterloo Region, Ontario, Canada and world.

My colleagues and I at Waterloo were pleased when the Government of Ontario recently committed to rebuilding Highway 7, connecting KW with our friends in Guelph.

We know how hard you’ve worked to make this project happen, and the Highway 7 rebuild is just one more example of the Chamber’s effective advocacy.

Another area the Chamber has contributed to very significantly, is the effort to attract family physicians to Waterloo Region. Businesses can’t thrive without population growth and economic expansion. The availability of good family healthcare helps enable these things.

To assist you in this important effort, I’m pleased to announce that the University of Waterloo will be making a contribution the physician recruitment program. This is a modest gesture of our support for the program, and we hope it encourages others to contribute as well.

Just as the Chamber has been busy leveraging its strengths to build a strong Waterloo Region, the University of Waterloo has also been hard at work on our Innovation agenda.

Innovation means advancement and improvement in all its forms. In business terms, innovation is often thought of in terms of productivity. Of course, it carries other, more specific business meanings as well, such as process innovation, product innovation, market innovation and organizational innovation.

Every form of innovation is critical to business and community success. As US business leader Jack Welch says, “if change is happening faster on the outside than on the inside, the end is in sight”.

That’s what it’s all about – whether you’re innovating as a business, a university or a society as a whole. For an entity to thrive within the context of its environment, it must outpace the challenges inherent to that environment. This holds true in the context of a specific regional marketplace, and to global society.

Because arguably for the first time in recorded history, there are such things as global challenges. These include climate change, major demographic shifts, and economic turmoil.

Environmental Scan

Climate change – however caused – has intensified weather-related challenges, impacting our daily lives. Our friends in Waterloo’s insurance community can speak to this very intelligently.

Catastrophic, weather-related damages to communities from Goderich to Slave Lake and beyond are lifting the curtain on the real-life impact of climate change.

Just a week or so ago, tornadoes ripped through New York City. That, generally, is not supposed to happen.

More profoundly, climate change is impacting a diverse range of populations, from those living in the arctic to those living in the heart of Africa.

For example, Canada’s Mackenzie River Basin, a huge swath of territory straddling six provinces and territories, hosts many indigenous communities. A watershed three times the size of France, the Basin is warming at a rate approximately three times the global average.

Warming temperatures in the Mackenzie Basin have enabled forest fires, caused mudslides and as a result, wildlife populations, which maintained the ecological balance in this beautiful place, have suffered long-term displacement. That’s happening right here in Canada.

And we can look farther afield, to Africa. Researchers at the University of California (Berkeley) estimate that climate change will increase the risk of civil war in Africa by 54% by 2030. This is particularly distressing at a time when Africa appears otherwise primed for economic growth and democratic consolidation.

Only innovation in how we secure agricultural production, water supply and responsible uses of energy can protect global populations from the risks of climate change.

Climate change is one of the world’s truly common, modern challenges.

Another is demography.

Global demographic shifts will define – for the 21st century –where key business opportunities lie, and where public policy challenges will be most acute.

Here in Canada – and indeed in Waterloo Region – demography is asking serious questions such as: how do we care for seniors; how to we manage thickening regional traffic flows; and how do we maintain ecological balance amid rapid population growth.

Demography is also asking us: do we, as Canadians, want to work longer and harder, or do we want to work smarter?

If we want to maintain a strong retirement income supplement in this country, we need a thriving immigration system to shore up our employment base. But that’s not the whole solution. Our economic output per capita needs to grow, and fast. Innovation and productivity are key to managing the deterioration in the ratio of worker to retiree.

If we want to maintain a strong healthcare system, the same logic applies. Innovation and productivity are essential to managing the declining ratio of healthcare funder to healthcare user.

These are demographic challenges, certainly, but they are also part of a broader economic challenge.

We are living in a “two-speed” global economy. Developing economies are now the strongest engine for global economic growth. According to the Carnegie Endowment for International Peace, these nations are leveraging strategic enablers like capital accumulation, technological catch-up, growing consumption and natural resource availability. And there is no obvious or necessary end in sight for their rapid economic expansion.

This, while G8 nations bail each other out of financial insolvency, absorb credit downgrades and play on the edges of fiscal cliffs. Canada may be the exception – thanks in part to the resiliency of businesses like yours – but our performance is excellent only in contrast to the tired group we traditionally associate with.

And even then, our advantage is qualified. Despite strong total government R&D expenditure, Canadian enterprises invest less in R&D than their US counterparts, and Canadian productivity growth is weak against the OECD average.

From climate change to demography to economic activity, innovation is the key to securing a bright future for generations to come.

As a university, whose interest is the advancement of knowledge and its application for innovation, the University of Waterloo’s perspective is this: we need to press down hard on the accelerator pedal of innovation. Innovation is the common-denominator solution to the chief challenges of the 21st century – environmentally, demographically and economically.

So what is Waterloo doing about it? How are we innovating and for what purposes?

I’d like to update you on how Waterloo is contributing to innovation within the context of our shared economy, society and natural environment.

Waterloo’s Innovation Agenda

As you know, Waterloo was founded on the idea of societal relevance. We trace our roots back to Waterloo Region’s and Canada’s need for engineers, to fuel rapid industrialization in the 1950s, 60s and 70s. Waterloo was conceived as an enabler and sustainer of industrial growth.

Applied Innovation

Where it all began, as you know, is Waterloo’s co-operative education program – itself a signature innovation. Our co-op education program has revolutionized experiential learning at the university level, and blazed an early trail into the field of applied science.

This term – Fall 2012 – Waterloo’s co-op students are learning in and contributing to 60 countries around the world. Our total of 16,500 co-op students earned $189 million dollars in the 2011/2012 academic year, drawing that pay from 4,500 employers. By taking their ideas into the workplace, and bringing industry experience back to the classroom, Waterloo co-op students are keeping innovation in circulation. This is one of Waterloo’s key contributions to innovation.

We’re catalyzing economic activity in other ways as well.

In 2006, with help from our federal and provincial governments, Waterloo established the Accelerator Centre, located on North Campus, just north of Columbia Street. Accelerator, as the name implies, is designed to help embryonic companies through the stages of development, so they’re ready to go to market with confidence and savvy.

As of the end of 2011, 19 companies have been fully formed through Accelerator. 84 companies have been incubated with the warmth of $72 million in external funding. These companies have in turn already generated $43 million in revenue and created over 600 jobs, mostly in Waterloo Region.

Building on that success, Waterloo has established a radical new system of student entrepreneurship, called “VeloCity”. VeloCity is a living and learning community that provides a unique, entrepreneurial environment right on our main campus. Students are given access to the latest technologies and the opportunity to learn from an expansive network of mentors and other entrepreneurs. Recently, a Waterloo graduate gifted $1 million to VeloCity, following the very successful IPO of his business.

This VeloCity project has been very productive. So we doubled down.

In 2010, the VeloCity Garage was created as an extension of the VeloCity program, to provide UW student-entrepreneurs with free space to kick-start their companies and make successful startups.

In less than four years, the VeloCity program has led to the creation of 34 companies, providing more than 200 jobs and attracting over $30 million in venture capital. In a country with comparatively weak venture capital systems, this is highly important.

Strong IP policies are also very important.

As business people, you know how critical intellectual property is to business success. It’s been recently estimated that intellectual property represents 45% to 75% of corporate value among the largest Fortune 500 companies.

A good IP license can be equally pivotal to the success of SMEs.

At Waterloo, we incent the development of IP through our “creator owns” IP policy.

Any IP developed by any Waterloo innovator belongs to that person alone. This is in contrast to most US institutions, and the vast majority of Canadian institutions.

If a Waterloo innovator wants professional support to maximize the potential of their IP and tap its value, they can use our home-grown resource, the Waterloo Commercialization Office, or WatCo.

WatCo exists to serve Waterloo’s innovators by shepherding them through the process of registering and licensing their IP. The innovator retains 75% of all revenue, WatCo retains a comparatively modest 25%.

Through WatCo, the University of Waterloo strives, every day, to facilitate the transmission of research and innovation into societal and economic benefit.

When we consider that Ontario outputs 55% fewer patents compared to peer jurisdictions in the US, it is vital that Waterloo sustain and extend our leadership role in IP patent-development and commercialization.

We’re proud of our contribution to economic activity and innovation.

We are equally proud of the other and equal main element of innovation at our institution. Innovation in our research agenda, which supports advancements in social and environmental progress.

Research Innovation

Let me illustrate how Waterloo is innovating through our pro-innovation research agenda.

The Schlegel-UW Research Institute for Ageing, or RIA, is designed to enhance the care of older adults in both community-based and Long-Term Care environments. The RIA is an outstanding example of collaboration and innovation in Waterloo Region. It draws on the vision and resources of industry leaders like Ron Schlegel, public funding through government partnership, academic research from the University of Waterloo and applied teaching and learning from Conestoga College. It is a model for other communities, and it showcases this Region’s collaborative spirit beautifully.

The Mike and Ophelia Lazaridis Quantum Nano centre is another example of philanthropy, vision, and research excellence coming together. QNC is a brand new facility that hosts the Institute for Quantum Computing and the Waterloo Institute for Nano-Technology. It is an award-winning architectural and technological marvel, and it will produce innovations that change the world.

I don’t know if you saw, but just recently Waterloo quantum research was in the news. Breakthrough research from Waterloo helped an international team teleport – you heard me right, teleport – tiny bits of information from one geographic location to another. This is the future of quantum computing, and Waterloo is making it happen.

Innovations in quantum computing have the potential to revolutionize cyber security and data processing power. We don’t even know what we don’t know about this technology’s potential. But we’re leading the world, thanks to the vision and generosity of Mike and Ophelia Lazaridis, and to Waterloo’s ability to attract the brightest minds from around the world.

A third and final example I’ll share with you is the area of water research. I mentioned earlier how rising temperatures threaten the peace and stability of parts of Africa. Water management, though, is truly a challenge for every jurisdiction, with community welfare and precious ecosystems hanging in the balance.

As US president John F. Kennedy said, “Anybody who can solve the problems of water will be worthy of two Nobel prizes – one for peace and one for science.”

As this graphic shows, water demand is set to drastically outstrip water supply by 2030. There is huge risk here to food security as well as international security. World-class institutions need to help address this looming crisis. That’s what Waterloo is doing.

We were very proud to develop the Water Institute. The Water Institute is a transdisciplinary hub for collaborative research, education and training about water issues and water resource management.

Building on that success, Waterloo is also the lead institution for the Southern Ontario Water Consortium, which has pulled $56 million in funding to the Region, from federal, provincial and private sector partners, IBM first among them.

And Waterloo is also the national headquarters facility for the Canadian Water Network. CWN is mandated to supply policymakers with research and analysis to support watershed and ecosystem management; public health; and the development of sustainable water infrastructure.

Moving forward, Waterloo intends to continue playing a leadership role on this important issue because it affects the well-being of the entire world.

Synthesis

Whether it’s in generating economic activity, helping to prepare society for major demographic shifts or combatting climate change, universities have a special role to play in innovation.

That’s because universities are the natural nexus for the key enablers of innovation.

Universities have the freedom of inquiry; the community partnerships; the access to public and private resources; the long-view and global-view perspective on time and place; the policy instruments like co-op education and liberal IP policies; and the global academic linkages to catalyze innovation, more robustly and more comprehensively, than any other pillar of society.

Which is why we’re reaching out – to you, to our government partners, to our peer institutions around the world – and we’re building partnerships to benefit society.

The environmental, demographic and economic challenges facing global society – and western society perhaps most acutely – are large and they are powerful.

But they are no more large, no more powerful, than our imaginations – and our ability to innovate a brighter future, together.

Thank you.

*Citations excluded from text for ease-of-reading. Cited text available upon request.