Yesterday I talked about ways universities can generate economic growth, and I promised to offer an example from Southwestern Ontario.

Southwestern Ontario has been in the news a lot recently due to its deteriorating economy, not least through the efforts of Western professor Mike Moffatt.  More recently, the Globe’s Adam Radwanski penned a feature article on what southwestern Ontario can learn from such economic revivals as has happened in the US rust belt.

Radwanski’s argument is a long one, but the bit relevant to post-secondary education just cites the examples of Pittsburgh and Akron, and says that universities should work more closely with industry to create new hi-tech centres of production.  Right off the bat, I think we can discard the Pittsburgh example.  For one thing, the city is in fact continuing to hemorrhage manufacturing jobs (3,000 last year alone), and for a second, the two institutions that have done the most to power the local economy are Carnegie Mellon (private) and Pittsburgh (semi-private), with a combined endowment of $5.6 billion.  Last I checked, the combined total for Western and Windsor was around $700 million.

Endowments matter because they allow institutions to take risks.  It’s probably not a coincidence that if you look at major US tech and innovation hubs where universities have served as a catalyst (e.g. Silicon Valley, Route 150 in Boston), the institutions at the heart are all private, and hence not worried about legislative scrutiny.  The only exception to this rule – UT Austin – just happens to be the world’s second-best endowed public university ($6 billion in assets, behind Michigan at $8 billion).

Ah, you say – but what about Akron?  That’s a public university, and it had a big role in helping the local rubber industry transition into a centre of excellence for polymers.  And yes, Akron is actually an excellent example, because it has a very close Ontario counterpart; namely, the University of Waterloo.

These days, people associate Waterloo with co-op, engineering, and integration with the local hi-tech economy.  But it’s worth remembering that when Waterloo started out in the late 1950s, the hi-tech economy didn’t exist.  Back then, Waterloo’s main industry – like Akron’s – was tires, and for the first decade or so of its existence, Waterloo was all about working with the tire industry.

Could Waterloo have worked harder to “save” the local tire industry, as UAkron did in Ohio?  Possibly.  But one big thing Akron had going for it was the fact that Goodyear had its corporate headquarters there.  Companies tend to do R&D close to home.  Even if Waterloo had tried some of the stuff Akron did, there’s no guarantee it would have had the same results because at the end of the day, Waterloo was a branch plant economy.  That matters.

Instead, of course, Waterloo did something better: it invented a new local industry essentially from scratch.  This did not occur by “working with industry” as we traditionally think about it.  It happened by giving a lot of people advanced training in a particular area, letting them create and spin-out companies, and then wait for the local economy to develop the deep pool of managerial skills and venture capital sources required to take products from concept to market.

(The importance of this last bit is insufficiently appreciated.  Take UBC, one of the country’s leaders in technology transfer: its life sciences spin-offs had a miserable time in the 80s and 90s because back then the only thing the local VCs and entrepreneurs understood was how to cut down trees and dig stuff out of the ground.  There’s a domestic life-sciences business ecology in Vancouver now, but it took 20 years to develop the required knowledge and skills.)

So, could Western University play a role like U Akron or U Waterloo?  Yes.  But it would have to bet on an industry or two (and it’s not clear which ones would make most sense).  And for the moment it is unclear that they have the desire, the cash, or the political backing to do so.  And even if they did, results would likely take a decade or more to show.  It’s a fix, but not a quick one.