Category Archives: Education

Start-ups Are the Key to Our Future

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Published in the Telegraph-Journal 19th April 2013

In a province where traditional industries have been in decline, substantial reliance has been placed on new business formation to support New Brunswick‘s economic growth. But entrepreneurship has always been a risky proposition. Whether launching a tech start-up, a small business, or an initiative within a large corporation, the odds are overwhelmingly against the entrepreneur. Harvard Business School researchers have recently estimated that more than 75 per cent of all start-ups fail.

For decades, business founders had been taught that success involves writing a business plan, pitching it to investors, assembling a team, introducing a product and selling it as aggressively as possible. This is the conventional approach and prevailing wisdom of business schools, government economic development agencies, financial institutions and investors.

But recently an new methodology has called into question the logic of business planning and discarded much of what we thought we knew about the process of starting a company. Called the “lean start-up“, this new methodology favours “experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development“.

One of the forces behind this new methodology is Steve Blank, a consulting associate professor at Stanford University, National Science Foundation principal investigator at the University of California at Berkeley and Columbia University and extremely successful founder of numerous high-tech start-ups.

Blank holds that business plans are one of the fundamental reasons why failure rates among start-ups are so high. The traditional business plan typically includes a five-year forecast for income, profits and cash flow. The assumption behind writing a business plan is that it is possible to figure out most of the unknowns of a business in advance, before funding is raised and the idea is actually executed.

According to Blank, “no one besides venture capitalists and the late Soviet Union requires five-year plans to forecast complete unknowns. These plans are generally fiction, and dreaming them up is almost always a waste of time.”

Conventional business plans contribute to the likelihood that entrepreneurs who can convince investors to fund them then begin to build the product in isolation from their markets, with little if any customer input. Too often, after months or even years of development, entrepreneurs learn the hard way that customers neither need nor want most of the product’s features. And in today’s fast-moving markets, even good ideas can be made obsolete very quickly.

Blank concedes that business success is predicated on too many factors for one methodology to virtually guarantee that any single start-up will be a winner. But on the basis of hundreds of start-ups, in university programs that teach lean principles, the more important claim can be made that using lean methods across a portfolio of start-ups will result in significantly fewer failures than using traditional methods. In the last five years alone, more than three dozen universities have begun to incorporate the lean start-up methodology in their program portfolios, with immediate and documented success.

A lower start-up failure rate would have profound economic consequences in New Brunswick. The province’s economy increasingly is being buffeted by the forces of globalization and disruption. Its traditional industries are rapidly losing jobs, many of which will never return. To ensure economic viability in the long term, the province must rely on successful entrepreneurship. The growth of jobs across the province will need to come from new ventures, and all New Brunswickers have a vested interest in fostering an environment that helps them succeed, grow and hire more workers. The rapid expansion of start-ups is critical to supporting the transformation to an innovation economy. Universities, government, financial institutions and investors each have a key role to play.

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Filed under Business strategy, Education, Innovation strategy, Job creation, New Brunswick, Universities

Research: Catalyst for Economic Growth

Published in the Telegraph-Journal 2nd October 2012

New Brunswick’s universities have been involved in much of the prosperity and growth in every industry in this province. There is a long history of university-industry partnerships that have supported the successful commercialization of university research as well as the creation of many competitive spin-off firms. The development of innovative products and services in existing companies and the generation of thousands of jobs in New Brunswick has been the hallmark of successful university collaboration with industry.

But in recent years, universities and scientific research centers have not been the catalysts for entrepreneurship and regional economic development in the way that similar and more successful institutions have in other regions. Even though there have been notable successes, New Brunswick’s university-industry collaboration is falling short. University and corporate business leaders need to more aggressively support start-up ventures and mid-size firms.

This represents a huge opportunity for New Brunswick.

There is a need to create new engines of job growth. As the demand for expertise and experience outpaces supply around the world, New Brunswick must take steps to increase its pool of talent. Other countries are already investing heavily in research and development. In Asia, R&D spending is forecast to overtake U.S. levels in the next five years, due primarily to remarkable growth in R&D investment in China.

In New Brunswick, the private sector may have limited capacity to create the jobs and prosperity needed to restore economic stability. The ability of the government to act as the generator of economic growth has become limited because of the province’s fiscal obligations. Essentially, the longer we wait, the more challenging the economic situation will become.

New Brunswick should follow the lead of New York City Mayor Michael Bloomberg to meet this challenge.

In 2011, Bloomberg and the New York City Economic Development Corporation announced that the city was seeking responses from universities, research organizations and related institutions to develop and manage an applied sciences research facility. The city’s objective was to strengthen its practical sciences capabilities in order to maintain a diverse and competitive economy, particularly in fields which lend themselves to commercialization and capture the considerable growth occurring within science, technology and research. Bloomberg committed the city to making a significant capital contribution in addition to providing city-owned land.

“A new, state-of-the-art applied sciences research school would be a major asset for New York City as we develop a 21st century innovation economy,” said Mayor Bloomberg. “The City is committed to finding the right partner and providing the support needed to establish such a facility because research in the fields of engineering, science and technology is creating the next generation of global business innovations that will propel our economy forward.”

A substantial applied sciences research centre with similar objectives of creating global business innovations is needed in New Brunswick, even if the financial commitment would be substantially less than the US$3 billion of New York City’s total expenditure. Rather than re-purposing New Brunswick’s current universities’ budgets to serve corporate objectives, creating additional world-class capacity to New Brunswick’s existing science and technology communities would allow the province to stay globally competitive. As with Bloomberg’s model, a substantial percentage of the costs will be carried by a consortium of collaborating universities, international applied science and technology organizations, as well as private sector partners.

This capacity would not only substantially enrich the province’s research capabilities, but would lead to greater commercialization and expand the province’s economy. While some of the development would be for academic use and would include teaching space and laboratory facilities, much of the focus would be on providing the business acumen needed to drive commercialization in startup and early stage firms.

We know that investing in innovation is the key to creating a robust and expanding economy. This initiative would be a strong demonstration of the province’s commitment to making these critical investments.

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Filed under Business attraction, Business strategy, Education, Entrepreneurship, Innovation strategy, New Brunswick, Universities

The Future Of Education Is More Than Technology

Published in the Telegraph-Journal 16th April 2012

In 1968, the Ontario Provincial Committee of Aims and Objectives of Education in the Schools of Ontario submitted its report, Living and Learning, to the legislature. Better known as the Hall-Dennis Report, it denounced Ontario’s regimentation of schools and classroom practices and called for the wholesale reform of the education system.

The report advocated an individualized program of instruction for the development of the potential of the child, the removal of corporal punishment, and the curbing of competition in the classroom and rote learning. According to Hall-Dennis, schools should be “viewed as a place of personal growth and development based on a learning process of self-discovery.” They called for replacement of rigid expectations, segregated grades and subjects with a system of education revolving around the individual needs of the student, with a minimum of supervision and guidance.

The report also highlighted the need for schools to respond to the unique demands of a fast-changing urban-technological society and the initial excitement generated by the report resulted in experiments such as team teaching and the heavy use of audio-visual instruction. It was not long before complaints began to accumulate about functional illiteracy and lack of readiness for the discipline of the work place or post-secondary education.

Almost 45 years later, the impact of the Hall-Dennis Report still resonates, not only in Ontario but across Canada. And questions about the purpose of education are still on the minds of teachers, parents and students.

With persistently high rates of illiteracy, some parents feel that the school system has abandoned its responsibilities. Their frustration is made more understandable since for decades parents were told that, unlike professionals, they lacked the expertise required to educate their own children.

Teachers are also frustrated. They are told that the knowledge and understanding they have acquired from years of classroom experience is not equal to the task of preparing students for the work world or post-secondary education. Critics claim that the knowledge teachers received in their training is being dismissed as anachronistic in light of the ever-changing demands of the market.

The Hall-Dennis Report placed a spotlight on the need for schools to make greater efforts to impart social skills to help students deal with their problems. If necessary, social skills would take priority even over a basic education. But there can be no essential conflict between good education and good citizenship; one cannot exist in the absence of the other. Students who are not able to clarify their interests and to articulate their responses to the world in the light of reason, history and the expanse of human experience and thought are not likely to become informed, thoughtful citizens or innovative and productive workers.

Commerce was never at the core of the traditional liberal education. Instead, it was the duty of the teacher to cultivate those capacities and skills which would prepare a student to carry the obligation of citizenship and to begin the exploration of the intellectual and spiritual life.

We need in Canada today a fundamental debate over the intellectual and moral objectives of our children’s education. This debate cannot be distilled to conventional policy discussions over methodologies of teaching or the constraints of funding. Important as these are in context, when they are allowed to define the parameters of the debate, these policy options foster the impression that there is disagreement only over fairly narrow technical issues which could resolved by further empirical study. This is most emphatically not the case today.

On the face of it, a liberal education model harkens back to an earlier time. But it is instead fundamentally in harmony with the views of education emerging from Canada’s growing number of parents, teachers and students who are dissatisfied with the educational establishment.

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