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Business Commentary Governments must invest in economic industries and training for the future

Vivek Goel is the vice-president of research and innovation at University of Toronto.

Back in 2008, MaRS faced a crisis. Construction had suddenly halted on its state-of-the-art innovation centre being built on a prominent downtown Toronto corner. The developer was unable to raise capital because of the global financial crisis. So, it turned to the Ontario government for a loan. As the head of Public Health Ontario at the time, I attended the MaRS meeting with Queen’s Park officials, but we kept getting interrupted by another urgent issue: bailout requests for General Motors.

At that time, Ontario turned down MaRS and bet on the auto sector, together with the federal government. The $13.7-billion loans and write-offs saved 20,000 jobs, but didn’t guarantee the industry’s long-term survival. As we’ve seen recently, GM announced the closing of its assembly plant in Oshawa, Ont., along with four U.S. facilities. Altogether, 14,800 people will be out of work, 2,500 of them in Canada. Despite millions of dollars in public support, the auto industry is still in transition.

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MaRS, on the other hand, did eventually receive a $224-million construction loan from the Ontario government in 2011. Today it is one of the world’s largest innovation hubs specializing in clean technology, fintech, enterprise and health. It has an exceptional roster of tenants and 140 research labs. MaRS repaid most of the government’s interest-bearing loans in early 2017 – three years earlier than scheduled – and startups connected to MaRS employ 12,800 people.

Investing in the assembly of traditional cars turned out to be short-sighted, as changing consumer taste, electric and autonomous vehicles, and global competition are upending the sector.

A recent report by RBC estimates that 25 per cent of Canadian jobs will be disrupted by technology in the next decade.

What should governments do to aid these workers? Try to save old jobs? Or invest in new and emerging opportunities and prepare for the work force and workplaces of the very near future? It makes more sense to do the latter, as the MaRS example shows.

The next generation of manufacturing jobs will require workers who are technically proficient and digitally sophisticated enough to work with the new technologies. This is where the government should direct its energy and dollars.

GM should be applauded for its announcement this month that it will set up training programs for out-of-work Oshawa employees, and spend initially between $5-million and $10-million, depending on what other employers provide. Durham College in Oshawa will establish a confidential internet portal in the New Year to help auto workers identify job openings and register for retraining courses.

At the University of Toronto’s School of Continuing Studies, among the most popular courses are certificates in software development, IT management and content marketing.

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Of the 21,000 students who took courses last year, four in five already had a postsecondary credential. Such continuing-education programs are an excellent model for “upskilling” existing workers.

Unfortunately, some of the workers who could most benefit from continuous learning are not accessing it. Workers over 55 and those without a postsecondary credential are less likely to enroll in continuing education. And a third of all workers report that multiple barriers – including lack of child care, cost and conflicting work schedules – keep them from pursuing work-related education.

How can these barriers be removed?

It is crucial that postsecondary institutions, business and governments commit to lifelong learning for all workers, regardless of their current job, education or age. We must track and reward programs that put learner success at the centre.

In Denmark, a program called Flexicurity helps laid-off workers by giving them up to two years of retraining. The program is a joint venture between the government and employers. In Singapore, the government launched SkillsFuture in 2016, a government-funded series of incentives to encourage people to upgrade their skills and acquire knowledge to stay competitive in emerging fields including advanced manufacturing, data analytics and cybersecurity.

Even though we may see doom and gloom in the job market with the rise of artificial intelligence and robotics, as the RBC report notes, in Canada, despite heavy job displacement in some sectors and occupations, the economy is expected to add 2.4 million jobs over the next four years. These new jobs will require skills such as digital literacy, cultural awareness and complex problem-solving.

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Postsecondary and training institutions, employers and governments must promote emerging sectors and retraining to ensure new skills meet new market needs. Trying to turn the tide by saving jobs that are being overtaken by technology is not a winning strategy.

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