More research emerges in defense of D-Wave as a quantum machine

D-Wave is cleverly and effectively using expert testimonials as its primary marketing strategy = credibility.

Add another point to the D-Wave Systems scorecard. Researchers at the University of Southern California have been experimenting with the Lockheed Martin’s quantum computer, housed there and have concluded that it can in fact do work that’s in line with quantum mechanics.

From a news release USC issued Friday:

“Using a specific test problem involving eight qubits we have verified that the D-Wave processor performs optimization calculations (that is, finds lowest energy solutions) using a procedure that is consistent with quantum annealing and is inconsistent with the predictions of classical annealing,” said Daniel Lidar, scientific director of the Quantum Computing Center and one of the researchers on the team, who holds joint appointments with the USC Viterbi School of Engineering and the USC Dornsife College of Letters, Arts and Sciences.

The new research, published Friday in the journal Nature Communications, follows research presented earlier this year from Amherst College professor Catherine McGeoch showing that D-Wave’s gear can perform operations faster than classical computers in some experiments. And a couple of the USC researchers themselves previously came forth with work suggesting, but not proving, that D-Wave computer can perform quantum annealing. The latest round of research brings more credence to the idea that quantum annealing and not classical annealing is possible with D-Wave. Quantum annealing could potentially arrive at answers to problems more quickly, kind of like going through a big hill instead of going up and over it in order to arrive at the same destination.

Still, there has been plenty of pushback as to whether A D-Wave machine really is a quantum computer that’s capable of solving lots of problems much faster than classical computing systems. And the new paper from USC doesn’t actually come out and call it one. It shows consistency with quantum annealing.

Whether or not it is a full-on quantum computer, commercial adoption of it beyond Lockheed and Google and NASA is certainly inhibited at this point by the initial cost. Lockheed reportedly paid $10 million for its machine, and operating it requires some pretty cold conditions — 457 degrees below zero.

Meanwhile researchers the world over are trying to come up with different ways to enable quantum computing. Commercialization of those technologies are years off, but perhaps they will prove more acceptable to D-Wave skeptics if and when they materialize into actual products.

 

Gigaom

Add another point to the D-Wave Systems scorecard. Researchers at the University of Southern California have been experimenting with the Lockheed Martin’s quantum computer, (s lmt) housed there and have concluded that it can in fact do work that’s in line with quantum mechanics.

From a news release USC issued Friday:

“Using a specific test problem involving eight qubits we have verified that the D-Wave processor performs optimization calculations (that is, finds lowest energy solutions) using a procedure that is consistent with quantum annealing and is inconsistent with the predictions of classical annealing,” said Daniel Lidar, scientific director of the Quantum Computing Center and one of the researchers on the team, who holds joint appointments with the USC Viterbi School of Engineering and the USC Dornsife College of Letters, Arts and Sciences.

The new research, published Friday in the journal Nature Communications, follows research presented earlier this year from Amherst…

View original post 243 more words

The Other “Big Idea” Taking Root in Greater Vancouver: Nuclear Fusion

California venture capitalist, Steve Jurvetson, Riding the General Fusion Containment Vessel

Maybe three years ago, I recall hearing something about a “nuclear fusion” company starting up in Burnaby.  In my mind, the thought of a nuclear fusion company in Burnaby was outlandish and preposterous.  Growing up in southern California, and later northern California, I had been “up close and personal” with the Space Program, and nuclear physics at UC Berkeley Lawrence Nuclear Labs and the super secret Lawrence Livermore National Labs.  My next door neighbor in Moss Beach, California worked at Livermore Labs. I learned of this only because an FBI agent called on me to politely inquire about him (just a routine update of their files, apparently).   My notion was that something like nuclear fusion might “someday” be real, but would  require the scale of a Manhattan Project,  probably after I was long gone.  Nuclear fusion was pure Star Trek, so beyond current science as to be completely fantastical.

As it happens, there has already been an enormous amount of work on nuclear fusion, at enormous expense.  The United States has been working on a project at Livermore National Labs, known as The National Ignition Facility (https://lasers.llnl.gov/#), which even uses the Star Trek imagery on their website. The other major project is a United Nations sponsored project, involving many nations, at the largely secret French nuclear research facility in Haute Provence, Cadarache.  I happen to know the Cadarache nuclear research site extremely well, because it is situated on the main road to my wife’s home village, we know people who work there, and there are almost always Greenpeace demonstrators at the main gate. Known as the International Thermonuclear Experimental Reactor (ITER) project, it is expected to be operational in 2022, but only after the expenditure of multiple Billions of Euros, at a time when Euros are in short supply.

Unfortunately, as often happens in such visionary research and development, both the U.S. National Ignition Facility and the Cadarache ITER projects have run into major technical and financial problems that are threatening their futures.

But then we have General Fusion, a very small startup company in Burnaby, on an infinitesimally smaller budget than the United States or the United Nations. apparently competing with the U.S. Department of Energy and the United Nations ITER project at Cadarache. How can this be?  Why does this also sound like the other Big Idea startup in Burnaby, D-Wave, perfecting quantum computing, despite the enormous odds against it?

This is not to say that General Fusion is going to necessarily change the World. What it does say is that enough informed people and brave investors believe that it is possible, that they are willing to risk their careers and that major institutional investors are prepared to risk their capital on it.  That is the Big Idea in action. That is what innovation in Canada needs more than anything. Money and bravery.

Ryan Holmes, CEO of Hootsuite in Vancouver, another of the shining new companies, has recently posted on LinkedIn that Canada is creating a “Maple Syrup Gang” of promising startups that are redefining entrepreneurship in Canada, his company being prominent among them. The “Maple Syrup Gang” is an amusing analogy to the real-life hijacking of millions of dollars of maple syrup by a criminal gang in Quebec. Holmes has also gone on to rhetorically ask the question, “Is Silicon Valley‘s Heyday Over?”  Regrettably, Holmes articles are embarrassing hyperbole.  Vancouver has had earlier promising high tech booms that have fizzled and died.  Unfortunately, the complex matrix of issues affecting Canadian innovation and the potential success of Canadian startups are still daunting.

I am very encouraged by the early successes of General Fusion and D-Wave in Vancouver, for many reasons.  But it is extremely premature to declare victory over Silicon Valley.  I came here in 1987 to join a promising startup, pioneering wireless data.. The company died from mismanagement, when it could have been a World power in wireless data. It is a case study in how Canada has historically shot itself in the foot, or is unable to capitalize,  every time it gets a good idea.

Let’s celebrate General Fusion and D-Wave and continue working to help Canadian Big Ideas succeed….here in Canada.

Industry Analysis: Norway Deals With It’s “Natural Resource Curse” While Canada Does Nothing

In my earlier post on March 11th , “Alberta Bitumen Bubble and the Canadian Economy: An Industry Analysis Case Study,” I reported the stark facts of Canada’s current economic crisis as announced by Canada’s Minister of Finance, Jim Flaherty, and Alberta Premier Allison Redford, directly resulting from pricing forecasts for “Western Canada Select” (WCS) from the oil sands. In that post I also explored the now well-established economic conundrum known as the “natural resource curse.”  This simply means that economies that rely heavily on natural resource exploitation, have historically underperformed more diverse economies. This is now most certainly the case in Canada.

Read more: http://mayo615.com/2013/03/11/alberta-bitumen-bubble-and-the-canadian-economy-industry-analysis-case-study/

In another excellent Globe & Mail article published May 16th, the author details how Norway dealt with its “natural resource curse,” and has diversified its economy with the government proceeds of its oil wealth.  By contrast, Canada’s current Conservative government prefers a laissez-faire approach to the future, taking no action.  In the opinion of most economists who monitor natural resource based economies, this is a recipe for disaster in Canada.  So again the discussion question is: in such a situation, what would you do to address this crisis for the Canadian economy?

Read more: http://www.theglobeandmail.com/report-on-business/economy/canada-competes/what-norway-did-with-its-oil-and-we-didnt/article11959362/

When oil was discovered in the Norwegian continental shelf in 1969, Norway was very aware of the finite nature of petroleum, and didn’t waste any time legislating policies to manage the new-found resource in a way that would give Norwegians long-term wealth, benefit their entire society and make them competitive beyond just a commodities exporter. “Norway got the basics right quite early on,” says John Calvert, a political science professor at Simon Fraser University. “They understood what this was about and they put in place public policy that they have benefited so much from.”

This is in contrast to Canada’s free-market approach, he contends, where our government is discouraged from long-term public planning, in favour of allowing the market to determine the pace and scope of development.

“I would argue quite strongly that the Norwegians have done a much better job of managing their [petroleum] resource,” Prof. Calvert says.

While No. 15 on the World Economic Forum’s global competitiveness rankings, Norway is ranked third out of all countries on its macroeconomic environment (up from fourth last year), “driven by windfall oil revenues combined with prudent fiscal management,” according to the Forum.

Before oil was discovered, the Act of 21 June 1963 was already in place for managing the Norwegian continental shelf. This legislation has since been updated several times, most recently in 1996, now considered Norway’s Petroleum Act, which includes protection for fisheries, communities and the environment.

In 1972, the government founded the precursor of Statoil ASA, an integrated petroleum company. (In 2012, Statoil dividends from government shares was $2.4-billion). In the same year, the Norwegian Petroleum Directorate was also established, a government administrative body that has the objective of “creating the greatest possible values for society from the oil and gas activities by means of prudent resource management.”

In 1990, the precursor of the Government Pension Fund – Global (GPFG), a sovereign wealth fund, was established for surplus oil revenues. Today the GPFG is worth more than $700-billion.

While there’s no question that Norway has done well from its oil and gas, unlike many resource-based nations, Norway has invested its petro dollars in such a way as to create and sustain other industries where it is also globally competitive.

The second largest export of Norway is supplies for the petroleum industry, points out Ole Anders Lindseth, the director general of the Ministry of Petroleum and Energy in Norway.

“So the oil and gas activities have rendered more than just revenue for the benefit of the future generations, but has also rendered employment, workplaces and highly skilled industries,” Mr. Lindseth says.

Maximizing the resource is also very important.

Because the government is highly invested, (oil profits are taxed at 78 per cent, and in 2011 tax revenues were $36-billion), it is as interested as oil companies, which want to maximize their profits, in extracting the maximum amount of hydrocarbons from the reservoirs. This has inspired technological advances such as parallel drilling, Mr. Lindseth says.

“The extraction rate in Norway is around 50 per cent, which is extremely high in the world average,” he adds.

Norway has also managed to largely avoid so-called Dutch disease (a decline in other exports due to a strong currency) for two reasons, Mr. Lindseth says. The GPFG wealth fund is largely invested outside Norway by legislation, and the annual maximum withdrawal is 4 per cent. Through these two measures, Norway has avoided hyper-inflation, and has been able to sustain its traditional industries.

In Norway, there’s no industry more traditional than fishing.

“As far back as the 12th century they were already exporting stock fish to places in Europe,” explains Rashid Sumaila, director of the Fisheries Economics Research Unit at the University of British Columbia Fisheries Centre.

Prof. Sumaila spent seven years studying economics in Norway and uses game theory to study fish stocks and ecosystems. Fish don’t heed international borders and his research shows how co-operative behaviour is economically beneficial.

“Ninety per cent of the fish stocks that Norway depends on are shared with other countries. It’s a country that has more co-operation and collaboration with other countries than any other country I know,” Prof. Sumaila says.

“That’s [partly] why they still have their cod and we’ve lost ours,” he adds, pointing out that not only are quotas and illegal fishing heavily monitored, policy in Norway is based on scientific evidence and consideration for the sustainability of the ecosystem as a whole.

Prof. Sumaila cites the recent changes to Canada’s Fisheries Act, as a counter-example: “To protect the habitat, you have to show a direct link between the habitat, the fish and the economy,” he says, adding, “That’s the kind of weakening that the Norwegians don’t do.”

Svein Jentoft is a professor in the faculty of Bioscience, Fisheries and Economics at the University of Tromso. He adds that Norway’s co-operative management style, particularly domestically, has been key to the continued success of the fisheries.

“The management system [for fish stock] is an outcome of the positive, constructive and trustful relationship between the industry on the one hand and the government on the other hand,” Prof. Jentoft says. “They have been able to agree on issues that you and many other countries haven’t been able to, largely because the government has listened to the fishermen.”

However, Prof. Jentoft isn’t on board with all of his government’s policies. He’s concerned about how the quota and licensing system is concentrating wealth and the impact that this will have on fishing communities.

He predicts that Norway’s wild stocks will remain healthy in the foreseeable future and that the aquaculture industry (fish farms), where Norwegians are world leaders, will continue to grow.

In 2009, Norway’s total fish and seafood export was $7.1-billion, $3.8-billion was in aquaculture. By 2011, Norwegian aquaculture exports grew to $4.9-billion. In Canada, total fish and seafood exports in 2011 were $3.6-billion, with approximately one-third from aquaculture.

Norway’s forests are another important natural resource, and its pulp-and-paper industry has many parallels to Canada’s. Both nations are heavy exporters of newsprint. With much less demand since the wide adoption of the Internet and competition from modern mills from emerging markets, both nations have suffered through down-sizing and mill closures over the past decade. Both have been looking for ways to adapt.

The Borregaard pulp and paper mill in Sarpsborg has become one of the world’s most advanced biorefineries. From wood, it creates four main products: specialty cellulose, lignosuphonates, vanillin and ethanol, along with 200 GWh a year of bioenergy.

“You have a diversified portfolio of products,” explains Karin Oyaas, research manager at the Paper and Fibre Research Institute in Trondheim. “The Borregaard mill uses all parts of the wood and they have a variety of products, so if one of the products is priced low for a few years, then maybe some of the other products are priced high.”

She feels this is a key change in direction for the industry in Norway. She doesn’t want to see the industry putting all of its eggs in one basket, as it did with newsprint.

Dr. Oyaas also thinks that rebranding the industry is key to its survival and success in Norway. The forestry industry doesn’t get the same kind of attention as the oil industry, nor does it have the high-tech image. But it is just as high-tech, and it has the bonus of being a renewable resource.

“You can make anything from the forest. You can make the same products that you can make from oil,” explains Dr. Oyaas.

Google Buys a D-Wave Quantum Computer

D-Wave 512-Qubit Bonded Processor – Recent Generation

Earlier this week, I was advised by a VC friend in Vancouver to expect another blockbuster announcement from D-Wave. And so it has happened. As if to stem any further skepticism and debate about D-Wave’s quantum computing technology, Google today announced that it has bought a D-Wave quantum computing system, in a partnership with NASA and Lockheed Martin Aerospace. This is the second major sale of a D-Wave system, and further evidence that this is not simple tire kicking by a group of ivory tower scientists.

Of particular note to me personally, was the growing significance of Vancouver as a site for a exceedingly advanced startup like D-Wave. In my previous post on this subject, I questioned whether a company in such a rarified area could attract the necessary personnel here.  Twenty years ago, when Mobile Data International started, I was one of four Americans to cast our fates to the wind and move to Canada to join MDI. At that time, we were seen as completely out of our minds. Vancouver had no attraction or other high tech industry companies worthy of note.  Today, Vancouver is seen as an World Class City, and one of the most livable. This may be one of the most important issues in favour of a growing high tech industry in Vancouver.

By way of example, it was also announced in parallel today that two key people from Silicon Graphics, the precursor in some respects to D-Wave, Bo Ewald, former SGI CEO, and Steve Cakebread, former SGI financial officer, have joined D-Wave.  Apparently, Ewald will lead D-Wave’s U.S. subsidiary company, and Cakebread has relocated to Vancouver.  If you have ever seen a bottle of Cakebread Cellars Chardonnay in a BC Liquor store, it is the same Steve Cakebread that is responsible.  More importantly, Vancouver may now be able to attract the kind of talent needed for companies like D-Wave.

Google and NASA are forming a laboratory to study artificial intelligence by means of computers that use the unusual properties of quantum physics. Their quantum computer, which performs complex calculations thousands of times faster than existing supercomputers, is expected to be in active use in the third quarter of this year.

The Quantum Artificial Intelligence Lab, as the entity is called, will focus on machine learning, which is the way computers take note of patterns of information to improve their outputs. Personalized Internet search and predictions of traffic congestion based on GPS data are examples of machine learning. The field is particularly important for things like facial or voice recognition, biological behavior, or the management of very large and complex systems.

“If we want to create effective environmental policies, we need better models of what’s happening to our climate,” Google said in a blog postannouncing the partnership. “Classical computers aren’t well suited to these types of creative problems.”

Google said it had already devised machine-learning algorithms that work inside the quantum computer, which is made by D-Wave Systems of Burnaby, British Columbia. One could quickly recognize information, saving power on mobile devices, while another was successful at sorting out bad or mislabeled data. The most effective methods for using quantum computation, Google said, involved combining the advanced machines with its clouds of traditional computers.

Google and NASA bought in cooperation with the Universities Space Research Association, a nonprofit research corporation that works with NASA and others to advance space science and technology. Outside researchers will be invited to the lab as well.

This year D-Wave sold its first commercial quantum computer to Lockheed Martin. Lockheed officials said the computer would be used for the test and measurement of things like jet aircraft designs, or the reliability of satellite systems.

The D-Wave computer works by framing complex problems in terms of optimal outcomes. The classic example of this type of problem is figuring out the most efficient way a traveling salesman can visit 10 customers, but real-world problems now include hundreds of such variables and contingencies. D-Wave’s machine frames the problem in terms of energy states, and uses quantum physics to rapidly determine an outcome that satisfies the variables with the least use of energy.

In tests last September, an independent researcher found that for some types of problems the quantum computer was 3,600 times faster than traditional supercomputers. According to a D-Wave official, the machine performed even better in Google’s tests, which involved 500 variables with different constraints.

“The tougher, more complex ones had better performance,” said Colin Williams, D-Wave’s director of business development. “For most problems, it was 11,000 times faster, but in the more difficult 50 percent, it was 33,000 times faster. In the top 25 percent, it was 50,000 times faster.” Google declined to comment, aside from the blog post.

The machine Google and NASA will use makes use of the interactions of 512 quantum bits, or qubits, to determine optimization. They plan to upgrade the machine to 2,048 qubits when this becomes available, probably within the next year or two. That machine could be exponentially more powerful.

Google did not say how it might deploy a quantum computer into its existing global network of computer-intensive data centers, which are among the world’s largest. D-Wave, however, intends eventually for its quantum machine to hook into cloud computing systems, doing the exceptionally hard problems that can then be finished off by regular servers.

Potential applications include finance, health care, and national security, said Vern Brownell, D-Wave’s chief executive. “The long-term vision is the quantum cloud, with a few high-end systems in the back end,” he said. “You could use it to train an algorithm that goes into a phone, or do lots of simulations for a financial institution.”

Mr. Brownell, who founded a computer server company, was also the chief technical officer at Goldman Sachs. Goldman is an investor in D-Wave, with Jeff Bezos, the founder of Amazon.com. Amazon Web Services is another global cloud, which rents data storage, computing, and applications to thousands of companies.

This month D-Wave established an American company, considered necessary for certain types of sales of national security technology to the United States government.

Glut of Startup Accelerators Points Toward a Shakeout

Yesterday, I was an invited guest at an annual “entrepreneurship” event held in Vancouver. The event is an extraordinary opportunity to connect with most of the major figures, leaders, and investors in the entrepreneurship community.  It also prominently showcased presentations from a number of the most promising new startups.  But the undercurrents in conversations around the room were soul searching questions about the current glut of startup accelerators around North America, and the frothy euphoria and enthusiasm about “entrepreneurship.” Some experienced entrepreneurial investors complained about the air of unreality of it all, and the excess of mediocre companies being cranked out. A very prominent and experienced Vancouver venture capitalist pointed out to me that a glut of Canadian startups only compounds the long-standing issue that Canada could not produce the necessary risk capital even if more of these companies were investment ready, which they are not.  A related issues is the waste of government money in these companies. Clearly, the situation is a mess.

But back to the central question: whether all this effort is producing real measurable results. Equally significant 1s the question, “Where are all the Big Ideas?”  Some startups are focused on extremely esoteric niche markets, which is fine, but should they be included in serious, and very expensive accelerator programs? Some have suggested that there should be lesser tiers of services for companies like this. Many suggest that there is not enough “tough love”:  up or out!

Ironically, when I returned home, I noticed that one of my friends, and a leader in the high tech accelerator community here, had forwarded to me an article from yesterday’s Financial Post, headlined, “Glut of Startup Accelerators Failing to Produce The Next Hootsuite or Shopify,” as if it were timed to underscore my conversations in Vancouver.

Read more: http://business.financialpost.com/2013/05/12/despite-their-numbers-accelerators-arent-producing-the-hootsuites-or-shopifys/

This is not a new problem.. For the last year a number of industry leaders, tech journalists and bloggers have been cranking out posts on this theme, and the rising evidence that it has become Problem One in the entrepreneurial world. Last December, PandoDaily published a post by Erin Griffith, titled, “We Know Accelerators are Headed for a Shakeout, But Do They?” Poignantly, the article highlighted the fact that Y Combinator in Silicon Valley, the paradigm for accelerators, announced that it was cutting its number of startups in it’s stable by almost half and reducing the size of their investments in response to all the over-enthusiasm.

Read more: http://pandodaily.com/2012/12/03/we-know-accelerators-are-headed-for-a-shakeout-but-do-they/

Another prominent high tech blogger, Francisco Dao, posted on his blog, “The Case for Fewer Entrepreneurs.”  A well known and respected blogger, Dao asks many of the tough questions and argues that “less is more.”

Read more: http://mayo615.com/2013/02/12/1530/

The last problem is the crucial need to encourage bigger thinking, Bigger Ideas. If we are to have a meaningful effort in entrepreneurial accelerators, shouldn’t it be more like a Manhattan Project, by prioritizing the kinds of new ideas that have real potential to advance and improve human existence?

The Washington Post published an article last year with the title, “Moral Decline and the End of Big Ideas.”   http://www.washingtonpost.com/national/on-innovations/moral-decline-and-the-end-of-big-ideas/2011/09/14/gIQAQntJwK_story.html  The author’s  point is that it is a sense of moral duty to make the world a better place that drives someone to change the World.  Or at least it should be..

Another opinion piece in the New York Times by Neal Gabler, also last year, asks where are the Big Ideas?  http://www.nytimes.com/2011/08/14/opinion/sunday/the-elusive-big-idea.html?pagewanted=all   The Atlantic magazine had published a list of the ” 14 biggest ideas of the year,”  the biggest of which, ironically was “The Rise of the Middle Class – Just Not Ours,” describing the rise of broad prosperity in the BRIC nations. The Atlantic list stimulated Gabler to predict a future of Big Data, but not Big Thought.. The implication I hear in Gabler’s editorial is that we are in a post Enlightenment time, a period of anti-intellectualism.  I hope not, but I fear it may be true.

Enactus UBC Faculty of Management Leadership Team Closes Out It’s First Year

The Enactus UBC Faculty of Management Leadership Team. Left to right front row: Stormy Johanson, Adam Prarie, Julia Moody (President)

Left to right back row: Jesse Shopa, Joey Gidda, David Mayes (faculty advisor), Chris Janiewicz

The formation of the University of British Columbia (UBC), Faculty of Management chapter of Enactus occurred only three months ago, under the guidance of Dean Roger Sugden, but the Enactus student leadership team has already attracted nearly two dozen members, all of whom, including the leadership will return next year, to build the organization for handoff to future Faculty of Management students. Meanwhile, many of our current Enactus members will be off to destinations around the World for the summer.

The Enactus Canadian national organization encouraged us to get out there and just start “doing something” rather than debating the chapter’s by-laws and getting bogged down in meetings.  The team did exactly that, and have already conducted a local food drive that collected over a quarter ton of grocery items prioritized by the Kelowna Food Bank, in only four hours.

The Enactus FOM team have also introduced themselves to the Enactus team at Okanagan College, and observed OC‘s dress rehearsal presentations for the Enactus national competition to get an idea of what we need to do next year.

The global impact and reach of Enactus was made evident to us this week when I was contacted by Doina Olaru, the Enactus faculty advisor from the University of Western Australia in Perth, who is currently on the UBC Okanagan campus conducting research. Doina had somehow found out about me, and asked to meet. I quickly arranged for her to also meet with our student leaders. We were all left in awe by Doina’s story of what she and her students had accomplished in five short years with limited funding. The UWA Enactus team are three time Australian national champions for their projects, and have also appeared at the Enactus global conference.  In addition to creating domestic Australian projects, the UWA team have created award winning projects in Kenya, India and Ghana, all in less than 5 years. Needless to say, our team hope that we can have a bit of their success rub off on us, and we have plans to build our relationship with Doina and to meet her team, as two of our UBC team will be Going Global in Australia very shortly.

Our most important early development has been the emerging plan for a major “Tier Three” project. Tier Three Enactus Projects are those which provide ongoing benefit to the community over multiple years, engage and employ a significant number of local community people in need.  In discussion with our Enactus national field director in Toronto, we learned that of the 63 Enactus chapters at universities across Canada, there are only 2 chapters currently with Tier Three projects. The Enactus national organization is obviously very eager to increase this number. We have shared our early conceptual ideas with the national Enactus organization and they are very enthusiastic and supportive.  For now, our Tier Three project remains under wraps while we do our “due diligence” and seek the endorsement of our key stakeholders, and community organizations who will also need to support the project.  We are hopeful that we can begin early piloting of our Tier Three project over the summer.

Finally, we have reached out to the community for financial support and we are well on our way to obtaining those local community partnerships.

For further information and to join our local Enactus chapter, contact Julia Moody’s mobile 250-801-6402 or mine: 250-864-9552. Or email us at enactusubco@gmail.com.

ABOUT ENACTUS. 

www.enactus.org

A community of student, academic and business leaders committed to using the power of entrepreneurial action to transform lives and shape a better more sustainable world.

entrepreneurial—having the perspective to see an opportunity and the talent to create value from that opportunity;

action—the willingness to do something and the commitment to see it through even when the outcome is not guaranteed;

us—a group of people who see themselves connected in some important way; individuals that are part of a greater whole.

Industry Analysis: High Anxiety Harper Gov’t Now Openly Denies Climate Change Science

This is another post in my Industry Analysis series on the Alberta Bitumen Bubble and The Canadian Economy, and Canada‘s strategic options.

In a clear sign that the Harper government‘s anxiety over the tars sands is increasing exponentially, the rhetoric from the Conservative government has become ever more shrill and less rational in tone. Rumors have abounded for some time that Harper himself is in fervent denial of climate change, but his PR handlers have cautioned him not to personally come “out of the proverbial closet” on climate change because it would cost Conservatives votes, the thing they care most about.  But this stance appears to be changing, as Canada’s “natural resource curse“, consequent economic downturn, Canada’s failure to invest in innovation, and national productivity crisis converge on the Harper government.  An ominous parallel can be drawn with South African President Thabo Mbeki‘s official denial that HIV did not cause AIDS, which became an international embarrassment for South Africa.  The implications for all Canadians are immense.

Thabo Mbeki, former President of South Africa Denies HIV Causes AIDS

Joe Oliver, Canadian Environment Minister Denies Climate Change Science

Mel Brooks, Writer, Director and Producer of the 1977 comedy film “High Anxiety”

Over the last few years, the Conservative government has quietly made a number of domestic and international policy moves that give clear evidence of its denial of climate change science.  However, Harper himself  has remained largely silent on these issues, providing him with just enough political cover to avoid being personally tarred for denying science.  Now, over the last few weeks, Harper’s Environment Minister, Joe Oliver, has been making statements on climate change and the tar sands that have led the national Canadian media to react with disbelief, and sharp criticism in print.  By allowing his Cabinet Minister to speak out so brazenly suggests that Harper needs to turn up the volume on climate change denial, again without overtly risking making such statements himself, though it clearly underscores that denial of science is the official Canadian government policy.

“I think that people aren’t as worried as they were before about global warming of two degrees,” Oliver said in an editorial board interview with Montreal daily newspaper, La Presse. “Scientists have recently told us that our fears (on climate change) are exaggerated.” Meantime, a newly-published peer-reviewed study by Canadian and Chinese scientists has linked fossil fuels to rising temperatures in China. For his part, Oliver was not able to identify which scientists he was using as a source, the newspaper reported. Canada is the only country in the world to have pulled out of the legally-binding Kyoto Protocol on climate change.

Two weeks ago, Oliver was proclaiming that  the Alberta oil sands industry was the“environmentally responsible choice for the U.S. to meet its energy needs in oil for years to come.”  Globe & Mail Journalist Tzeporah Berman wrote in response, “At a time when climate change scientists are urgently telling us to significantly scale back the burning of fossil fuels, having a minister promote exactly the opposite really does feel like being told that two plus two equals five.”

The logical conclusion that can be drawn from all of this is that Harper’s national economic policy centered on the tar sands, is coming apart at the seams. The Conference Board of Canada (now led by former UBC Sauder Business School Dean, Daniel Muzyka), the Organization for Economic Cooperation and Development (OECD), a United Nations body, and leading Canadian media have all reported data that are extremely disconcerting for the Canadian economy.

Tragically, we are observing Canada increasingly losing its reputation as a World leader in humanitarian ideals and sensitivity for the Earth, not to mention Canada’s global competitiveness, as exhibited by Harper government policy that is nothing less than reactionary anti-intellectualism, which makes Canada a pariah to the community of nations. Canada’s strategic options to reverse its economic woes are dwindling.  

What would you do in this situation?

Read more: http://mayo615.com/2013/03/11/alberta-bitumen-bubble-and-the-canadian-economy-industry-analysis-case-study/

Read more: Stephen Harper’s energy minister denies climate change science | canada.com.

Article: Canada’s economic growth to remain weak: OECD

Canada’s economic growth to remain weak: OECD http://www.theglobeandmail.com/report-on-business/economy/canadas-economic-growth-to-remain-weak-oecd/article9587265/?_rob_utm_medium=twitter

Alberta Bitumen Bubble And The Canadian Economy: Industry Analysis Case Study

Alberta Tar Sands In Their Indigenous State 

The Canadian media (CBC, Globe & Mail, Canadian Business) have been buzzing with analyses of Alberta Premier Alison Redford’s  pronouncement last month that the “Bitumen Bubble,” is now crashing down on the Alberta economy, and potentially the entire Canadian economy. The Alberta budget released last Thursday, March 7, acknowledged a multi-Billion dollar deficit from this year, and “even larger declines in the next several years,” due to forecasts for significant price decreases for “Western Canada Select“ (WCS), the market term for the Alberta oil sands. This is contrasted with “West Texas Intermediate“ (WTI) which is also known as the standard for “light sweet crude,” which is much cheaper to refine.   Canadian Finance Minister Jim Flaherty echoed the impact of reduced oil sands revenue on the federal budget, by warning of significant cutbacks in federal spending as well.  The impact of this sudden change in the prospects for the Canadian petroleum industry and for government oil tax revenues, will likely also have serious implications for the BC economy, jobs growth, business investment, consumer spending: essentially the Canadian economy as a whole will suffer.

As an Industry Analysis case study for Management students, how did this happen, why was it not foreseen?  Why weren’t foresighted  policies put in place, and what are Alberta and Canada‘s strategic options now?

The June 25th, 2006, CBS News 60 Minutes report by senior CBS News Correspondent Bob Simon, can be taken as a convenient departure point for this analysis.

Video (1min 52 sec.) CBS 60 Minutes: 6/25/2006: The Oil Sands

The so-called “proven reserves” of oil in the Alberta oil sands are estimated to be 175 Billion barrels, second only to Saudi Arabia’s estimated 260 Billion barrel reserve. In the CBS video, Shell Canada CEO, Clive Mather estimates that the total may be as large as 2 Trillion barrels, or eight times that of Saudi Arabia. The CBS 60 Minutes report at the time in 2006, was considered so positive, that it was eventually shown in an endless loop in the foyer of Canada’s Embassy in Washington D.C., at Canada House in London, and elsewhere around the World.   The Alberta oil sands were seen as the harbinger of a great new era of Canadian economic progress and wealth.

Since that time a variety of external market factors, and long-standing failures of Canadian government policy have converged like Shakespeare’s stars, to turn this Pollyanna scenario into the national disaster it has become for Canadians.

Perhaps the single most important point in this discussion is that Canada has historically been a natural resource based economy, which has led to complacency and neglect of investment in innovation.  Innovation is the most important determinant of business competitiveness and economic prosperity in a world of global markets and rapid technological change.  Canada’s overall investment in R&D in science and technology has been below the OECD average for decades, and continues to decline year to year.  As a consequence, Canada has also fallen sharply behind the United States in productivity.  Essentially, there has been a “robbing Peter to pay Paul” mentality in Canada with regard to investment in the future of the Canadian economy. So long as we can simply dig a hole and ship the rocks or oil overseas we are doing just fine, thank you very much!

In a serendipitous coincidence, the current events in Venezuela have provided a parallel to the petroleum industry issues in Canada. Yesterday, the HBR Blog Network published a post by Sarah Green. Ms. Green interviewed Francisco Monaldi, Visiting Professor of Latin American Studies at the Harvard Kennedy School. Professor Monaldi is a leading authority on the politics and economics of the oil industry in Latin America.

During the HBR Blog interview, Professor Monaldi referred to the “resource curse” of Venezuela, also citing Canada and Saudi Arabia as suffering from the same malaise. Venezuela has done all the wrong things under Chavez, and consequently the Venezuelan economy is in shambles. Monaldi cited Chile, who also had a natural resource boom, but are creating a national stabilization fund by not putting all of the money back in the economy at once, a counter cyclical policy almost unheard of in Latin America. A similar scenario of reinvestment in innovation has occurred in New Zealand, whose government has sought to reduce its vulnerability to over-reliance on natural resource exploitation.

A Canadian Broadcasting Corporation interview March 7th on The Current with oil industry expert Robert Johnston, and CBC business columnist Deborah Yedlin, revealed that the Venezuelan Orinoco crude is actually very similar to Alberta WCS, but it does not require massive destruction of the land. Transportation routes to U.S. refineries designed to deal with extra heavy crude have been up and running for years.  The U.S., despite the political tensions with Venezuela, is currently the single largest customer for Venezuelan extra heavy crude.  In The Current interview yesterday, both Johnston and Yedlin admitted that the Alberta oil industry was ” very uneasy”  about their competitive situation vis-a-vis Venezuela.  Yedlin also underscored Canada’s “resource curse” and the failure to diversify Canada’s investment in innovation and technology.

Listen to the CBC interviews: http://www.cbc.ca/thecurrent/episode/2013/03/07/the-future-of-venezuelas-oil-industry-and-what-it-means-for-albertas-oil-patch/

Alberta oil sands, by contrast, are completely land locked, and the Alberta producers are in the midst of an unsavory political wrangle over two pipelines, which has brought undesired attention to the other problems with Canadian bitumen.  Without at least one pipeline, the Alberta oil sands industry is in a questionable state. Should the United States elect not to approve the Keystone XL pipeline to the Gulf of Mexico, Canada’s only viable remaining option would be to sell the oil to China.  Some Canadians are taking the position that Canada “should” sell the oil to China.  The Harper government is now hypersensitive to China’s interest in the oil sands. Others have suggested that we should refine the oil ourselves, but it is cheaper to send it to Texas than to build refineries in Canada. According to Yedlin, Canada is now locked into the urgent need for the pipelines, with no other options or strategy.

The argument can be made that Canada should have been implementing policies like those in Chile or New Zealand years ago, anticipating the boom and bust of the global petroleum market, and socking away money to deal with it.

The most recent 2012 OECD Economic Survey of Canada also serves to underscore the urgent need to change our national policies with regard to natural resource exploitation and investment in innovation to improve our performance in global productivity.

As the oil boom and high value of the loonie have pushed wealth westward, Canada’s productivity growth has been relatively flat in recent decades, and has actually dropped since 2002. Meanwhile, as the OECD observes, productivity growth south of the border has risen by about 30 per cent in the last 20 years — a gap that is causing Canada to lose competitive ground.

“Canada is blessed with abundant natural resources. But it needs to do more to develop other sectors of the economy if it is to maintain a high level of employment and an equitable distribution of the fruits of growth,” study author Peter Jarrett, head of the Canada division at the OECD Economics Department, said in a press release.

Meanwhile, yesterday, Friday, March 8th, the Globe & Mail published a scathing criticism of federal Natural Resources Minister Joe Oliver for characterizing the Alberta oil sands industry as the “environmentally responsible choice for the U.S. to meet its energy needs in oil for years to come.”  G&M Journalist Tzeporah Berman wrote, “At a time when climate change scientists are urgently telling us to significantly scale back the burning of fossil fuels, having a minister promote exactly the opposite really does feel like being told that two plus two equals five.”

Our most respected national journal simply reached the end of its patience with Canadian government “doublespeak.”  Every independent study, including one from the U.S. Department of Energy, has found that the oil sands are one of the World’s dirtiest forms of oil, producing three times more emissions per barrel produced and 22 per cent more greenhouse gas emissions than conventional oil (when their full life cycle of emissions, including burning them in a vehicle are included).  The problem is simple: the massive “energy in versus energy out” equation simply does not work for oil sands.  Large amounts of natural gas and water are required simply to prepare the bitumen for transport to refineries. Yet our government continues to wave its arms in a desperate attempt to divert attention from the facts, rather than to deal with the facts. One would think that our national government by now would have a reality-based strategy to deal with major economic and political issues of this scale.

This discussion has barely touched on the opposition to the two pipelines, Keystone XL and Enbridge Gateway, attempting to move the landlocked tar sands out of Alberta. This is a strategic market issue that should have been addressed years ago, but was not.  The thorny issues of both pipelines are now a rod for Alberta’s own back. Considering the market competitor Venezuela, with comparably unattractive “extra heavy crude,” but having existing transport, the prospects for Alberta are not favorable, and it has finally sunk in for Alberta oil executives.

The long awaited U.S. State Department Draft Environmental Impact Assessment (DEIA) on the Keystone XL pipeline, released early this month, was written by oil industry consultants which have raised significant concerns of a serious conflict of interest in their findings. The Executive Summary of the State Department DEIA took a decidedly neutral position, saying that the pipeline would have “no effect” on the development of the Alberta oil sands. But buried in the report were findings that argue against the need for the pipeline.  The recent developments in Venezuela and the increasing energy independence of the United States were not factored into their findings.

The DEIA specifically evaluated what would happen if President Obama said “no” and denied Keystone XL a permit. It concluded that not building the pipeline would have almost no impact on jobs; on US oil supply; on heavy oil supply for Gulf Coast refineries; or even on the amount of oil sands extracted in Alberta. If these findings are accurate, then one must ask why it is necessary to build the Keystone XL pipeline.

So in conclusion, how could the Canadian federal government not have foreseen this calamity, and prevented it?  Could it have been the giddy euphoria of the 2006 CBS 60 Minutes report?   The only best solution, investing government oil revenue into innovation and technology R&D, may no longer be a viable option.

In such a situation, what would you do to address this crisis for the Canadian economy?