Meeting the challenge: In a global society in crisis and rapid change,
at what do we excel; where do we fail?

Questions

At whose expense is this productivity occurring when we talk about human capital. A lot of young people are looking at a work world where work is contracted out, it’s freelance work, part-time work and, if they do get a full-time permanent job they’re often working a 50-hour week, rather than a 35 or 40-hour week.

Basically, where is globalization going to take us and what the work world will look like in 2020? Will young people have full-time jobs and be able to retire comfortably? Will they have any security at all?

Nicholson: I can start on the definitional side, where at whose expense is productivity growing.

Broadly speaking it’s not growing at anyone’s expense when you average but, of course, for an individual who happens to be put out of a job because of new labour-saving equipment, or some new labour-saving technique, it’s clearly at their expense in the short-run and sometimes even in the long-run. There’s no doubt about that.

But, if you look either historically or if you look across the world today those places where measured productivity is highest is where job creation is highest, where unemployment is lowest and where prosperity is greatest. And that’s true historically in Canada and it’s true across regions of this country and across countries.

A classic example, I think the most spectacular is what happened in agriculture where at the turn of the century roughly 50 per cent of the labour force was on the farms. It took one person to feed two basically. Now it’s only three per cent and we’re not only feeding ourselves and a lot more of us, but exporting.

And you might say, as people said at the turn of the century — what are these people going to do? And the truth was you couldn’t answer that question then and there. But what happened was that the daughters and sons of farmers migrated to the cities and created the beginnings of a service sector and the manufacturing economy. So these resources do get redeployed.

But there’s no question if you focus on one individual at a particular time in the trajectory of their working life they can pay the price. But overall there’s no question that the evidence is overwhelmingly that productivity improves job creation.

Zussman: One of the real complexities of the work issue is that 100 years ago when people moved of the farm to cities they largely went from low-skill jobs on the farm to low-skill jobs in the city, manufacturing particularly. What we are now witnessing is the real dislocation in the workplace. As jobs are being transformed [people] are requiring different skill sets.

At this point I’d say we really haven’t a good picture of the future at all.

In fact, most of my comments about the books I’ve read in this area is the analysis is excellent, the historical to the present is fine. The last few chapters are usually very disappointing. That is to say, what’s it going to look like and what are we going to do about it?

We don’t have a good picture of it. We’ve got to spend much more time worrying about this and try to ask some of the simple questions first — what are we really going to do?

What’s interesting is when you look at some of the survey data the nature is that younger people really have different expectations about work, in large part driven by a lot of the changes that Peter has already described.

But, I’m not sure whether these are sustainable, these are real changes or transitory changes simply responding to the marketplace that demands piecemeal work and contract work. There’s lots of work to be done and I don’t think we’re anywhere near answering some of these fundamental questions.

Jerome-Forget: I’ll talk about a new trend, that is people working from the home; small office-home office — SOHO.

People predict that by 2000 [some] 40 per cent of households will have one person working from the home.

Coming back to my women’s issues and the children dilemma and these various lifestyles that are changing, I think this is going to be a big impact on the lifestyle of our society.

Not only that, these young people who start these small office-home offices develop what I would call resistance, or inoculation, to dramatic events; that is, if something goes bad in society, if the economy goes down, they have developed the skills and they can adjust more rapidly.

What is the role of young men today?

Jerome-Forget: We have to worry about them.

That’s one topic I removed because I didn’t have the time. I do believe we are moving in an era where roles will be far more confused and, therefore, young men and young women will be sharing a very similar kind of environment.

I think young men are getting the kind of training that young women are getting now. I understand that men are not unhappy about that. There seems to be surveys [suggesting] we’re entering an era whereby men appreciate the fact they can express emotion, which was unacceptable up to fairly recently.

I don’t know if I answered your question about young men. I don’t think they are deprived.

Dr. Forget, you discussed the changing models of the family...and that these changes impact children in different family structures in very different ways.

How should government deal with these and should government deal with the breakdown of the nuclear family? Should government try and address it through policy changes or considerations, or should they leave it alone?

Jerome-Forget: In terms of childcare I think governments need to set regulations. They certainly need to subsidize childcare for those who are under a certain income level. Quebec has decided to give free childcare to all parents.

In terms of family policy, I’m not sure it was the right decision because I think have allocated all the support to families at that period and I think families need support at other times as well.

In terms of government involvement, I believe subsidies to low-income families, plus certain regulation is probably the maximum that government should do.

I was wondering if you could comment on the question of allowing income splitting and tax credits for stay-at-home mothers? If not, why not?

Jerome-Forget: Frankly, I’m not sure you are rewarding the right person. At one point women were demanding that they receive benefits if they stay at home.

If you have a women that has to get up early by necessity and by choice to support the family, should that person be forced to subsidize somebody who doesn’t go through that. I’m not sure that ethically it’s the acceptable way to go about it.

When women stop for a period of time to have their children there are policies that you can set in place so they’re not penalized in terms of their pension, which is important because if you are out of work for a period of time you lose on your pension benefits.

Sometimes what governments can do is include those years in terms of your pension. So there are policies you can do to help out women who want to stop [work] for a period of time to have children.

Mr. Nicholson, how would you measure the success of a corporation in the 21st century and, most importantly, how will it be different than 1998.

Nicholson: I don’t know. You can’t really predict the interaction between the evolution of values in a society and performance of a particular unit like a corporation. So, anything I’d try to speculate on would be just an extrapolation of what we see today.

What I see today and what I think is a definitive consequence of highly-competitive markets, both domestically and internationally, is that corporations have really focussed their allegiance on their suppliers of discretionary capital, if I could put it that way; the common equity holders.

Obviously it’s important to look to employees and customers and this is part of everybody’s mission statement.

But, when you sit inside corporate offices where decisions are made it’s very heavily oriented towards maximizing shareholder wealth.

That undeniably is the single objective that dominates today.

Now any sophisticated analysis of what shareholder wealth maximization means does take into account the marketplace you’re serving, the corporate reputation you build up in the larger community, which will always be a function of guessing how far you can push in this direction or that, and certainly how you treat your employees.

I think certainly in the years I’ve been in business I’ve seen a dramatic increase in the focus on shareholder returns. You really can’t avoid it because in a world of highly-mobile capital, which is controlled by large institutional pools — you don’t have long-term investors, it’s very mobile — gauged on at best quarterly returns [so] your feet are held to the fire constantly.

I think as long as this model dominates that’s going to continue to be the case. I think it has real limitations....[maybe] two decades from now, or maybe even a decade from now, that single focus on shareholder value maximization may be watered a little bit with a broader view of stakeholders.

*     *     *

Dr. Jerome, you spoke of the changes in the traditional family...a family can be made up of biological parents, non-biological parents, etc. Given that we know through research the importance of cognitive and emotional development in children during the first three to five years, what are some of the implications of this changing family environment for a child when there may not be that secure attachment that is so essential in those first three years?

Jerome-Forget: I don’t know whether it’s damaging or not, or how damaging it is.

When I was a clinical psychologist and a child psychologist well before I moved into the public domain, it was always tricky to determine what created a good environment. I saw people being together having a very difficult time with their children and having a difficult outcome, problematic outcome.

I’ve seen environments that were terrible and having children that had [a] terrific outcome. So, basically it’s not a matter whether people should feel guilty about that.

We will have to develop mechanisms so that cost to the children is the smallest cost possible. And if people separate and divorce, which is a reality, whether we like it or not, I don’t think it’s going to decrease. We have to face up to that so we ensure a process that’s the least damaging to the children.

At what level, within what sector, would you see those mechanisms being put into place?

Jerome-Forget: I think it exists. Right now couples who want to separate and have young children hire someone to mediate the conflict between the two of them. The idea of bringing a third may be helpful.

I suspect you can have agencies, you can call upon external people. One of things suggested at one point was that when you marry you sign some contractual arrangements as to how you are going to deal with the children if there is a divorce. You do it beforehand, not when there’s a conflict.

In the U.S. they say one of the hallmarks of the democratic process is the influence of lobby groups. What do you think is the role of the lobbying in the triad of the voluntary, public and private sectors in Canada? Will there be more lobbyists in five years?

Zussman: I’m not sure there’ll be many more. In Ottawa, there at least 10,000 people who earn a living on a full-time basis as lobbyists, so it is a very big enterprise on the Canadian scene.

Having said that, I think it plays a very legitimate role because what it is typically doing is trying to bring forward arguments from one sector to the other. It’s trying to bridge the gap.

The lobbying, in fact, is bidirectional. It’s not always one to the other. It’s quite an interactive type of process. To a large extent, the role the lobbyist plays is educational. It’s to explain a position of the other sector of society.

What I was arguing was that we’re going to begin to re-examine the role because we won’t need to organize our lobbying efforts the same way we have in the past because we’ll have easier to decision-makers and decision-makers to citizens.

Citizens may forego the traditional form of joining an interest group or lobby group, which by the way isn’t always a business lobby but could be a not-for-profit lobby group and may, in fact, take on some of these responsibilities on an individual basis.

So, were about to possibly see almost chaos in the air as ideas fly back and forth. That won’t be sufficient, of course, and then what we’re going to end up finding I suspect is other ways for individuals to coalesce around issues for a very short time and perhaps for longer periods of time.

We know, for instance, that a lot of the traditional associations that operate in Ottawa are losing members. There not specialized enough; they’re too general, they don’t satisfy our needs.

So, you’re getting organizations joining many such lobbying groups that are sometimes formed for short-term purposes and other times for longer term purposes. It’s quite a dynamic sector undergoing a tremendous amount of change and they’ve formed a professional organization of their own; they lobby on their own behalf [and] the have a new educational training program and I’m helping someone set up a degree granting program at the University of Ottawa and Carleton so they can establish expertise.

Jerome-Forget: As probably the only lobbyist on this panel, one of the things that is very interesting in the lobby movement today is that where it was drawn up in narrow lines it is extremely important that the lobby movement recognize when they’ve achieved a goal, or the goal for which they were brought together and not try to continue to perpetuate themselves as a lobby simply because they’re there and successful.

That’s happening quite generally, where battles have been won and now you sit around and redo your mission statement. Hopefully, there’ll be some attrition based on that.

Nicholson: I should also confess an interest. I’m also registered. I used to be tier two, now I’m tier one.

*     *     *

What do you think ought to be done to stimulate Canada’s knowledge base?

Zussman: This is something I don’t know a lot about in terms of research and development.

We do know, though, a lot of the work Industry Canada is doing recognizes that Canada certainly under invests in R & D, particularly in the science areas. According to their own analysis we’re paying a big price for that. If you don’t get in early on in the game, particularly these days, it’s almost too late. The games gone and you’ve missed out.

The question I think then, therefore, is what is the relative roles of government and the private sector in terms of investment.

And that I guess is where there’s a huge amount of debate. We know, for instance that a lot of Canadian-based scientific companies are not Canadian-owned and, therefore, a lot of the science is done elsewhere.

Interestingly enough, the more I read about this the more I realize that, in fact, there’s a huge competition within companies themselves for these so-called world-wide mandates and with it goes all the R & D and all the jobs associated with that. So just having a single science-based company in Canada may not be sufficient that we’re going to do any R & D at all. They may lose out to their Argentinian partners and, therefore, the world production of a certain product goes south with all those jobs.

This is a whole new game. It’s another one of those things we don’t know a lot about, except that we do know that not being in the game early on probably precludes us from ever joining in.

Nicholson: You’re right, we’re lagging behind. In the last five or six years the gap has widened a bit.

I think at the governmental support level we’re starting to close it. The real story in Canadian research was the tremendous increase at the business level. The corporations in Canada are growing R & D way faster than they are in the United States, although the dollars per employee are still not nearly at U.S. levels.

So there’s a lot of catchup being done at the corporate level and that’s the official policy to encourage that at both provincial and federal levels of government.

I think that’s fine. We needed more of this anyway, but I’m a little worried that’s it’s going to go too far and that the pure sort of research will be starved, because I can tell you from working in Canada’s most research-intensive large corporation that time horizons on research projects are just getting shorter and shorter. And competition drives that.

What’s happening is that no one is really looking after the huge long lead times that are required to bring an idea like Einstein’s theory of stimulated emission of radiation, which led to the laser in Bell labs 40 years later.

Who’s going to do all that work? Bell labs could do that work because they had a monopoly. They didn’t worry about competition.

I think we’re coming close to a point where there’s a danger of reliance on the corporate sector to do it all.

So I’m a big promoter of more research dollars being spent by the public sector because it is a general good for the society at large.

In fact, it’s part of the global common property. If we’re not producing it, we’re not going to be generating the kind of highly-skilled people — and that’s primarily the domestic return; it’s the production of highly-qualified people in research laboratories, etc. who are then able to scan the world for the 95 per cent of the new ideas that are going to be developed elsewhere anyway, no matter what we do.

I think the current government has got a bit of religion on this. The Canada Foundation for

Innovation for instance is going to do a lot to bring the research infrastructure of this country back up to global levels and that’s going to create a tremendous induced demand for the scientists and the graduate students and the RAs to operate that equipment and it will feed through into more money for the councils.

In the context of the total fiscal picture in Canada, the amounts of money really are small. But the impact they can have in the production of highly-qualified people, allowing Canada to make its contribution in areas of its specialty will be tremendous.

Dr. Zussman, what role do you envisage for younger Canadians in the public service in the 21st century, especially given that the size of government will continue to shrink and what is it you’re asking young Canadians to get involved in doing?

Also, what changes do you see in the public service in terms of career planning and changing, training, etc. How do we attract and retain them?

Zussman: There are two elements. I always start off teaching one of my courses at university by asking how many students have ever been involved politically. And it’s almost no one in the class.

One of the things I try to challenge them to do — at one level at least — [is] if you want to change the world there’s one place at least you can start. There’s lots of opportunities for people to be involved to change those institutions themselves, because ultimately its the political system that makes the key decisions in society.

You’re young. There’s lots of openings, there always looking for people and ideas. Take advantage of those.

Conversely, if that doesn’t attract you I still think that work in the public sector is as important today as was 15 years ago in a more narrow sense, more focussed.

Again, you’re looking for people who are different than those who go into the private sector. You’re looking for people who are there to protect the public interest. And that’s going to remain, as far as I’m concerned, a consistent value for years to come regardless of size.

When I said the government is going to be a lot smaller, it doesn’t mean that a lot of the functions that governments undertake won’t be done elsewhere. I suggested there would be the creation of a lot of agencies or satellite organizations that deliver services.

So the policy and routine function of government will be the core, but delivery will be done elsewhere. And working for agencies that deliver will be just as interesting, or as significant, as working directly in the provincial government as has been the case.

So, I mean follow your heart if you like. If you want to help, you want to play, you want to make a difference there are lots of agencies out there and organizations. It just won’t be called, necessarily, the Government of Saskatchewan or the federal government of Canada.

In fact, there may be a day when some of the private sector companies will actually be fulfilling some of these similar functions, although I did warn that this will be for profit and as a consequence it will have a slightly different norm.

The attraction part. I think our government has been so preoccupied for the last 15 years on downsizing, rationalizing that they have failed to make any attempt to attract people into the system. The federal government two years or three years ago hired 500 people into a workforce of 180,000 at the time.

We’re now almost at a crisis situation at the federal level with so many people having both retired through downsizing and through attrition that almost one half of the executive cadre will be gone in the federal public service within the next four years.

There’s going to be a huge demand for jobs at the federal level by virtue of simply demographics. If you have the interest and the inclination, there’s going to be a job.

My question has to do with the electoral system and the distribution of ridings. It seems to me that this is an issue that never goes away and every government that gets elected just slams the door behind it because they got elected on that system.

It has to do with the disenfranchisement of large city voters and the fact we continue to have a riding system that’s based in the 19th century and here we’re heading into the 21st century. It seems to me it’s a problem that has to be addressed.

Zussman: The Public Policy Forum did some roundtables last year on notions of electronic democracy, testing ideas about elections through electronic means, but more direct democracy.

Of course, as you predicted, the closer we got to government the less and less attractive the idea was and surprisingly the MPs are the least interested in any change in the present system at all.

I think we have to have a healthy debate about this issue in large part because there’s a demand about the change in the political system. The Conservative Party with its leadership race underway now has a revamped system that they’re using to elect its new leader, in large part in response to its rank and file saying the past systems didn’t work.

Pressures will build. They’re building within political parties and we are seeing somewhat of a shift in emphasis.

I don’t see any major changes in the short term. But slowly there are changes. The NDP in B.C. has been working with some new legislation it introduced on recall. I’m not sure it’s as keen on it as it used to be because some of its own people have been targeted, but it’s led to more discussion. They clearly can’t retreat from the recall, they’re committed to that. It may not be a perfect system but they’re going to now examine some new things.

So, put some pressure on the system and see what happens. You’ll be surprised there’ll be more people like yourself and in time there will be some changes.