Jordan B. Peterson is a University of Toronto psychology professor. He has created online tests to evaluate entrepreneurial ability, used currently in more than 90 cities around the world.
On May 9, The Globe and Mail published Canadians Can Innovate, But We're Not Equipped To Win, by Research in Motion co-founder Jim Balsillie. This is part of a series responding to and expanding on that essay.
Canadian universities have been charged with the responsibility of contributing directly to economic growth, and criticized for their failure to do so. However, they are already required to perform competently in teaching and research – which they do very well, it's worth noting. Although Canada does not have powerhouses on the level of Harvard, Stanford or MIT, our average university is far better than the average university in the United States or most other countries.
Nonetheless, it is possible that our schools should also be playing a direct economic role. But we haven't yet had a serious conversation about what that might require, or what might be risked in the process.
In my experience, calls for the commercialization of research are generally put forth by people who have never done research or started a business. This means that they radically underestimate the difficulty of both. Running a startup is far more than a full-time job, and academic work is very competitive. Original and productive researchers – those most likely to discover or create something of direct economic value – already work far more than 40 hours a week. Where do they find the time to get a new business off the ground?
Furthermore, professors are actually punished for taking time away from their core responsibilities. We are assessed yearly for research (40 per cent), teaching (40 per cent) and administrative work (20 per cent), and the very small pool of merit pay available to reward stellar work is distributed accordingly. Time spent on commercialization interferes with those three key responsibilities.
There is little doubt that people's behaviour is regulated by rewards and punishment. If Canadian society believes that the commercialization of university intellectual property is necessary, then the evaluation process for professors simply has to change. Perhaps 30 per cent on research, 30 per cent on teaching, 30 per cent commercialization and 10 per cent on administration might prove effective. But this also means that evaluation committees have to be on board and armed with the necessary knowledge. This is far from a certainty.
It's also the case that the generation of intellectual property is less important in the commercialization process than people generally believe. Here's a lie: "Build a better mousetrap and the world will beat a path to your door." If you set out to build a better mousetrap business, a brilliantly designed gadget is just the beginning. Marketing, sales and distribution constitute 90 per cent of the business problem, regardless of product, and university departments don't have marketing arms, salespeople or distribution networks– they don't even have the vitally important business contacts that would make the creation of such things possible.
Perhaps the professor should turn to the venture-capitalist system, or seek help among the many incubators that have recently sprung across Canada? I don't think so. Venture capitalists don't want to produce functional businesses. They want to purchase intellectual property (often squeezing the inventor out in the process), hype it brilliantly and gain a quick, high return on their capital through a buyout or an initial public offering.
Incubators, such as MaRS and Communitech, run on the same model. They don't help new entrepreneurs gain customers. Instead, they teach entrepreneurs how to be attractive to venture capitalists, by working on two-minute elevator pitches and glitzy presentations for potential inventors, and by generating spreadsheets that show $300-million valuations within five years courtesy of exponential growth (which is very easy to show on a spreadsheet).
What the incubators don't know how to do is solve the real problems faced by people who want to build a real business. The largest of these problems is finding paying customers. They are exceedingly hard to come by and, without them, there is no business – even if the product is good.
What this all means is that Canadian society is not really serious about university involvement in commercial development, partly as a consequence of ignorance about how research works, and partly as a consequence of ignorance about how business works.
It's fashionable to insist that we have valuable IP lying around that could be transformed into viable businesses, if only the will were there. But it's simply not true. The commercialization process has real structural problems, and unless they are addressed, we won't get any better at business development.