$9.7 Billion per year foregone – By Ray Hudson

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SFU President, Andrew Petter, beside a concept drawing of the new Sustainable Energy and Environmental Engineering Building, now under construction in Surrey. Photo: Ray Hudson

“We don’t graduate enough post sec students”

SFU President, Andrew Petter, beside a concept drawing of the new Sustainable Energy and Environmental Engineering Building, now under construction in Surrey. Photo: Ray Hudson
SFU President, Andrew Petter, beside a concept drawing of the new Sustainable Energy and Environmental Engineering Building, now under construction in Surrey. Photo: Ray Hudson

Surrey: Andrew Petter, SFU President and Vice-Chancellor, in his annual report to the Surrey Board of Trade this past week, drew a rather stark picture of how much better our economy would be performing if the resources were made available to graduate more post-secondary students. The result of this skills deficit is costing BC’s economy some $9.7 billion annually, according to a study by the Conference Board of Canada.

The message is that, as a society we’re slipping further behind in the critical Tech Sector and it’s costing real money.

“The $90 million funding for SFU Surrey expansion, the Sustainable Energy Environmental Engineering Building, will allow expansion of the university’s capacity for education and innovation as well as to expand its partnerships with Surrey business and strengthen our engagement with this community,” said Petter.

Petter said the Sustainable Energy Engineering and Mechatronics Program, the principle occupier of this building, will be a key driver in the most dynamic part of BC’s economy, specifically the knowledge economy.

“That’s the part by which humans through their intelligence and creativity add economic and social value, which British Columbians have become good at,” said Petter, “and that’s in large measure to the strength of our post-secondary system. Metro Vancouver’s Innovative Ecosystem is ranked 18th among all high tech hotspots in the world.”

Petter said Hi-tech industries now employ more people in BC than all traditional resource industries combined, and their employees on average earn 75% more.

“That’s the good news,” the SFU President said, “but the bad news is, while BC’s tech sector is growing, we’re losing ground to our competitors who are growing faster than we are. In the last three years Metro Vancouver has slipped nine spaces in that innovative ecosystem ranking to eighteenth globally. A shortage of talent is the main reason that stands out.”

“BC’s post-secondary institutions are not graduating enough students to meet the economic demand,” said Petter.

The extensive Employer Survey conducted by the Conference Board of Canada in 2015 and updated just a few months ago, calculated that resulting unfilled jobs and unrealized business growth are costing the province $7.9 billion per year in foregone GDP, which is what would have been realized if we had had that talent. The government is also foregoing $1.8 billion in tax revenues, which could help build that capacity to realize that opportunity.

Petter said three-quarters of all new jobs require some form of post-secondary education. The Conference Board projects that while BC is on track to train more than 400,000 skilled workers over the next decade, it will leave a shortfall of more than 500,000 skilled workers.

“That’s opportunity lost for thousands of businesses that are denied the chance to grow and whose future is squandered for tens of thousands of young people denied their full potential,” said Petter.

“A portion of this educational shortfall is in trades and applied skills, and that gets a fair amount of attention as it should. But the Conference Board concludes that by far the largest educational deficit is in bachelor and graduate level education,” says Petter. “The survey shows 60% of current and anticipated job vacancies require people with a university degree because the skills employers say they need most include critical thinking, problem solving, writing, oral communication and an ability to work with others, the very skills students acquire through an excellent university education, yet that level of education is where we are experiencing our most pressing deficit.”

“In compiling its economic score card last year,” said Petter, “the Greater Vancouver Board of Trade found that compared to our competitors around the globe, Metro Vancouver gets a mediocre “C” grade for the percentage of people over twenty-four, who have a Bachelor’s degree or higher, just 31% of our population of Metro Vancouver, as a necessary credential compared to 46% in San Francisco or 40% for Seattle.  The BC Business Council’s latest report on Innovation for Jobs and Productivity, shows BC well below the Canadian average in the number of bachelor and graduate degrees granted per capita. Metro Vancouver suffers the third lowest labour productivity in North America.”

This educational deficit is not the result of a shortage of qualified university candidates.  Even if employers go begging for university graduates, BC’s world class universities are turning away prospective students. The Conference Board study found that over 120,000 British Columbians are currently unemployed because they lack access to relevant post-secondary education.

“Given our limited number of funded spaces, competition has grown so stiff in recent years that the average entrance GPA (Grade Point Average) at SFU has risen six percentage points over the past six years, from 81% to 87%,” said Petter. Some high demand programs entrance GPAs have risen by over 10%. We’re telling thousands of qualified high school graduates that we don’t have room for them in the programs that they want, and programs that would give them the skills that employers need.

This problem is particularly acute here in Surrey which has one of the highest youth populations in Canada, yet the municipality has the fewest number of post-secondary seats per capita of any jurisdiction in Metro Vancouver.”

“That’s the bad news, but in identifying the problem of insufficient university spaces to meet student demand we also see the solution to the talent gap. In addition to high-lighting the importance of soft skills, the Conference Board study I referred to still points to specific disciplines that are in highest demand; graduates in engineering in electronics, in computer information sciences, in communications, in business and management. I’m very happy to say these are the very areas that we’ve targeted for SFU’s Three-Phase Surrey Expansion.”

Petter suggested looking at the Conference Board bad numbers of $7.9 billion per year in foregone GDP and $1.8 billion in foregone taxes, in a positive way.

“Consider the dividends we stand to gain and human fulfilment if we pre-invest a portion of that foregone revenue in eliminating that skills deficit,” suggested Petter. Viewed in this light, the announcement of our new Sustainable Energy Engineering Building and its associated programs is not just great news for Surrey, it represents a greater step on the road to prosperity and social well-being for the whole province.”