The Canadian government is starving management education, consigning Canada to the ranks of economic also-rans. That’s the argument of Roger Martin, dean of the Rotman School of Management at University of Toronto. Recently appointed to his third term at Rotman, Mr. Martin, a former management consultant, has been no slouch at putting himself and his school on the map. But in Mr. Martin’s view, these micro-victories mask a fundamental crisis in funding business education on a national scale.
I see Rotman is putting up a new building that doubles its size. Aren’t you rolling in dough already?
We’re not rolling in dough. We’re rolling in a quarter to a third as much dough per student as our global competitors. Canadian business schools have to do so much with so little, which is the story in the Canadian university system, in part.
How did things get this way?
When Canada hit its mid-1990s economic meltdown, it was worse than in the United States, particularly in central Canada. For Ottawa, it was a matter of balancing the budget by chopping provincial grants. And the provincial governments balanced their budgets by chopping education, primarily higher education.
Then the economy recovered in the mid- to late-1990s and the feds decided: ‘Since we love education so much, we need to reinvest in it.’ They have reinvested in education in the only way they can directly, which is through chairs in research and the like.
What’s it meant for business education?
They totally bypassed business education. For example, of federal research money from the three major funding councils, business gets 1.7 per cent of the funding but it gets 17 per cent of the students. Health Sciences have 36 per cent of funding and 11.2 per cent of students – and that’s understandable with all that expensive R&D. Natural sciences and engineering have 39 per cent of funding and 28 per cent of students.
In all the social sciences and humanities, except business, there are 44 per cent of students and 24 per cent of research funding. So the social sciences get hit, but their hit is less than 2 to 1. In business – which is all about making our country competitive – it’s a 10 to one cut.
In terms of competitiveness, shouldn’t business be far down the priority list from science?
Add up all the jobs in the Canadian economy contributed by these six sectors – information technology, communications technology, pharmaceuticals and biopharma, medical devices, aerospace vehicles and aerospace engines. Those are the jobs you would think of as heavily influenced and involved with hard sciences. What percentage of full-time jobs are in those six sectors? Just 1.6 per cent.
But isn’t the value added disproportionately higher in those industries?
Slightly. The salaries of those people, which is a proxy for their value added, are somewhat above that level. If you scale up those jobs proportionate to the wage bills, it would be about 2.5 per cent of the total economy. So all the things on which you are spending all that money amount to 2 per cent or maybe 3 per cent of the total economy.
What makes a country prosperous is not investment in science and technology. It is businesses producing high paying jobs by having unique products and processes that a customer needs. Yet we have an economic development policy that focuses incredibly tightly on a very narrow part of the economy with no demonstration or proof that it is particularly helpful. Meanwhile, we complain about our companies not being innovative enough or globally competitive enough, and we send them off to battle with much less education than their competitors.
