This is a good thing, on a number of levels. First there is considerable IT heft in Saint John and to have a provincial IT initiative led out of that city makes sense. Second, we need a provincial initiative.

Read the PropelICT strategic plan here.

It's pretty good stuff but it would go a long way in my books if this organization would at least recognize the importance of both IT company incubation and attracting a few key anchor IT firms from away. They do mention in this strategy "attracting and growing IT firms". Here are the three elements of the purpose strategy:

To develop the necessary community based infrastructure (Ideas, People, Capital) to expandentrepreneurship, innovation and economic activity in the sector.

To accelerate growth in the region’s ICT community by attracting and growing new ICT companies andfacilitating the growth and collaboration of the existing ICT companies, and

To influence government to adopt policy and practices that will foster growth of the sector,especially through business start-ups.


I think it is clear that the province has spent far more money and time trying to grow ICT firms than it has trying to attract ICT firms. How many national or multinational ICT firms has the province attracted here (not including a couple that came for government contracts)? Not many. Any? Probably a couple but I can't think right off the top. As for supporting startups I can name you 50 without even thinking from Learnstream, Provinent, ContentAlive, JOT, Ithinkinteractive, Romunlin, Ecom, EHub, BKM Training I'll stop here but you get the point. You will also notice they are all out of business.

I would like the ICT industry in New Brunswick to have a look at successful ICT ecosystems elsewhere and really understand the linkages between big and small ICT firms, education, association and government. It can be a highly complex ecosystem and the first step towards building a cluster is understanding this reality. For example, most successful small ICT firms never grow big alone - they are almost always bought by a larger firm or at least injected with equity from a large partner. The nature of ICT is that if companies want to expand beyond small local contracts, they need serious equity beyond short term cash flow.

But I have talked about this at great length before. For now, I wish PropelICT all the success in the world.

One of the oldest tricks in the advertising biz is to develop ads that are so interesting and innovative that you get a pile of media coverage thus doubling or more the impact of the advertising.

The other thing about Nova Scotia is that they are becoming quite creative in their advertising.

And that buys them a full story in the LA Times.

This is kind of my mantra. If you don't have anything, make something up.

I love it when the media talks about a new "Marshall Plan" or "Bretton Woods" plan to address the current global financial crisis. Not to be outmanoeuvered, some are calling for Green Marshall Plan.

It's funny but I actually like these efforts and this thinking but I would put it in the context of New Brunswick. Imagine if we did a Fed/Prov Bretton Woods type conference on the future of New Brunswick but we invited the Feds as a full partner, a few large industrial tycoons and even reps from other other provinces.

Develop a 30 year Marshall Plan - heck, let's call it the McKenna Plan - that involves serious investment (not just tweaks), serious regulatory/legislative changes (not just tweaks), serious ramping up of ED efforts (not just tweaks) and serious targets and milestones.

Then, in 30 years, when NB is a thriving, have province that is one of the leading regions in North America for economic growth and has a number of leading 21st Century clusters in place, we can refer to the "McKenna Plan" when discussing other provinces or states that want to rise up.

The TJ has an editorial quite critical of SJ leadership this a.m. and it uses the dreaded comparison to Moncton and Fredericton to make its point.

It's been a good year for Moncton and Fredericton. In March, these municipalities were ranked the No. 1 and No. 2 most cost-competitive cities in northeastern North America. This week, they were listed among the 21 smartest communities worldwide. Saint John did not place on either list - and the responsibility lies with local political leadership.


Now I am all for challenging local council to be more proactive in the area of economic development and fully funding and supporting Enterprise Saint John (as well as having an internal ED officer). But these two specific points are a bit misleading.

First, the KPMG report is paid advertising. You pay to have your city included. I have to admit that I don't know why SJ was not it but that study is not completely unbiased or neutral. You pay to get in and if you like your ranking you push it for all its worth.

Second, the Intelligent Communities Foundation program is similar in that the community has to submit its case for its intelligence. There were 400 submissions this year and Moncton and Fredericton should be congratulated for making the list of 21. But there are dozens of awards that a city can aspire to - even in the area of economic development - EDAC awards, IEDC awards, ICF awards and yes even Communities in Bloom. Cities need to be strategic and selected about which awards they target.

Saint John, for example, might be better off putting its energies into joining this group - The World Energy Cities Partnership.

Well, this will be fun. Fredericton and Moncton vying to be the world's most intelligent community.

Both communities made the short list of 21 Intelligent communities.

Congratulations.

I'll be curious to see how they get to the short list of seven but I will say this. They talk about a "culture of use". Moncton's use of telecommunications and IT to power economic development has been impressive over the past 20 years. In 1985, no one would have thought that Moncton would have 5,000 people working in the call centre biz and the largest IT workforce in New Brunswick.

That's not to take away from Freddy Beach. The Capital city is one of the smartest cities in Canada (as measured by percentage of the population with a unversity degree). But Freddy didn't have to transform the way Moncton did.

The reality is that Saint John has a similar story of transformation as well. Not that long ago I did a little review of the changing labour force structure in the big three cities and SJ had an almost 300% increase in its IT workforce over 10 years, Moncton had something like a 270% increase and Freddy only 70%. Now, of course, Freddy had far more IT workers in 1996 than either Moncton or SJ but now both SJ and Moncton have more - by a margin (although as a percentage of the labour force Freddy still has the highest percentage of the three).

So all three can make a case - I guess it's up to the respective City Hall's to make their case - now it's about marketing.

I think the first time I started to seriously think that data centres might be an interesting ED opportunity for NB was over three years ago. Now, it is now a mainstream economic development opportunity and I get multiple stories every week about a new data centre campus, a new way to power data centres, etc.

This notion of a data centre park is a good one providing you have competitive electricity rates. Basically, you go out and recruit a data centre company (the ones that host other people's data) and build a little cluster around them and their recruitment efforts.

It's a bit strange but I have five emails in my inbox suggesting that Keith Ashfield getting the ACOA portfolio would be great news for New Brunswick. The kind of legacy that McGuire left in PEI, one said.

Maybe. But I would be more concerned that Ashfield will be presiding over the slow unwinding of ACOA.

Tony Clement gets the Industry Canada portfolio and all the pundits I heard today say it is so that he can come up with the bailout packages for Ontario's manufacturing sector. That will be the ED focus out of Ottawa for the forseeable future.

Dont' get me wrong. I would love to see a rejuvinated ACOA with a strong mandate to support the attraction of industry and foster serious business investment in the region.

I saw on Tuesday as Frank McKenna was announcing he wouldn't run to lead the Libs, the other less known Premier, Bernard Lord, was announced as the new president of the Canadian wireless industry association.


I was more confused about Bernie's move than Frank's. McKenna is living the life right now - jetting around, making good dough, executive homes in Rosedale and New Brunswick and a brand image larger than life. Why subject yourself to that rough and tumble world of politics? I had hoped he would, but I understand why not.


Now, Bernie's move - that I don't understand. Running an industry association is a job - maybe a well paid job - but just a job. He will get neither rich (i.e. Frank's way) no will he advance his political ambition. He will become just another lobbyist writing reports and workin' 9-5. It seemed to me the whole lawyer, power broker, deal maker, etc. was a far more impressive way to proceed if politics is in the future. And it seemed from his public persona, bilingual commission, national co-chair of the Conservative campaign, etc. that he was angling for either more time in politics or some senior government appointment (ambassador, etc.).

Why take a 'job'? And if he wanted a job, why not running ACOA or some other plum federal job from his buddy Steve?

Strange.

I just heard Finance Minister Jim Flaherty say that the Equalization program as currently structured is unsustainable. The New Brunswick government has relied on tens of millions more each year in Equalization and it is now the single largest source of revenue the province takes in.

The interesting thing is that the program was enriched by Harper when he first got in to appease Quebec. I would be curious to see if this is Harper firing a shot over the bow of Quebeckers so to speak. The Harper giveth. The Harper taketh away. Because any major changes to equalization will be most acutely felt in Quebec because it gets the most (on a dollar basis).

The reality is the Graham, McGuire et. al. were right back in 2006 when they framed the debate about self-sufficiency.

However, they have yet to show a pathway to less equalization. The last forecast I saw predicted additional increases every year until at least 2010/2011.

It's one thing to know what needs to be done. It's quite another thing to actually do it.

There's an X factor in politics. Something that cuts across policies, dogma and ideology. There was something about Frank McKenna that made a few of us (maybe a lot of us) think that New Brunswick could be a leader instead of a laggard. Could be a place that was a magnet for people and investment not a repellant. Could be a place to be proud of not always in defensive mode (sorry if that last one sounds like Michelle Obama but I do spend a fair share of time arguing the case for NB with folks outside the province).

When you deconstruct it was Frank's time in office transformational? Are we, now 11 years out reaping the benefits of the outstanding policies and legislation that were put in place?

I won't cover that again except to say that I think a realistic assessment of Frank's time in office would be mixed. Certainly, his focus on economic development was needed and should have been sustained after his retirement.

But his personal charisma and much of his language (I am not talking about French and English) pointed us in a positive direction. That has, in my opinion, slipped somewhat in recent years.

There are a lot more shrugged shoulders these days. Resignation that we are unlikely to really see much change in the way things are done.

A quick anecdote - maybe illustrative maybe not. For a project I am working on I had to review the industrial park profiles put out for the parks in Nova Scotia. These are provincial documents - professionally done but with some interesting text.

Under the heading "Rail Access" instead of just putting "no", the profiles (remember these are marketing documents meant to extol the virtues of the industrial parks) state things like "CN stopped offering rail service in 1990s" or "there are no plans to offer rail to this park" and "CN is not planning to put a spur from the main line" and other strangely out of place comments in a marketing brochure. It's almost like mischievous bureaucrat trying to rub it in that CN tore up the tracks - but sent through the wrong medium. CN is never going to read these industrial park profiles.

It's a little thing but it points to a broader attitude in this part of the world that stuff can't really get done here. I hear it all that time. "That can't happen here." "'Why would they want to invest here?" "If I were Microsoft, I wouldn't put a development studio here." And these are economic developers and bureaucrats and politicans.

You know what I would say if I was writing these profiles? I would say (particularly about the industrial parks where the CN line passes relatively close to the park) "if you need rail access and you've got a good project in mind [like a Michelin plant], we'll make it happen." "If I have to go out there and hammer in the spikes myself, we'll get you a spur line if it is a deal breaker for a $200 million investment."

That, it seems to me was the essence of Frank McKenna. And that's what's missing. And he would have brought that to the national stage.

Freddy Beach and Moncton made the list of 21 Smart Communities for 2009. Hoo hah.

The Smart21 of 2009
Albany, New York, USA; population 94,000
Ashland, Oregon, USA; population 22,000
Bristol, Virginia, USA; population 17,500
Dublin, Ohio, USA; population 40,000
Edmonton, Alberta, Canada; population 1,035,000
Eindhoven, Netherlands; population 297,000
Fredericton, New Brunswick, Canada; population 50,535
Gold Coast City, Queensland, Australia; population 509,000
Issy-les-Moulineaux, France; population 61,000
Kenora, Ontario, Canada; population 17,000
Malta; population 405,000
Manchester, England, UK; population 2,500,000
Moncton, New Brunswick, Canada; population 125,000
Nelson Mandela Bay, South Africa; population 1,200,000
Porto Alegre, Brazil; population 1,400,000
Riverside, California, USA; population 291,000
Stockholm, Sweden; population 795,000
Tallinn, Estonia; population 400,000
Taoyuan County, Taiwan; population 1,950,000
Trikala, Greece; population 52,000
Westchester County, New York, USA; population 950,000

The C.D. Howe Institute is the latest think tank to take on the problems with the EI program and concludes, as have many others, that it is contributing to high unemployment mostly in the Atl. Provinces.

There are a couple of points here.

1. This is a well thought out, academic review of EI with regression analyses and a laid out case. Folks that are pushing for the EI program and unwilling to change should not dismiss these guys. They do have the ear of policy makers. I know that Harper actually enriched the EI program when he came in but eventually after many of these papers, somebody's going to try and 'tackle' it.

2. I can't figure out why these Phds - Fraser, C.D. Howe, the Centre for Labour Market Studies and all the others that have castigated the EI program always come to the same conclusion: the EI program provides disincentives for labour mobility. They always conclude - check it out if you don't believe me - that the EI program stands in the way of a natural labour mobility - puts a 'disincentive' in place for workers to move where the jobs are in Canada.

Not one of them actually comes to an alternate conclusion (mine, coincidentally) that the EI program is inhibiting economic growth within the very communities in which it is most utilized and that the issue is not to encourage more mobility but to try and better understand why these communities have no capacity to attract more business investment. All this brilliance and no one seems to waver from the tired old mantra of moving Atl. Canadians - as fast as we can - to Fort McMurray.

There is a deeper public policy issue here beyond removing barriers to labour mobility. I like labour mobility. In a well functioning economic environment where each region of the country has its strengths and weaknesses, labour would be highly mobile. Blue collar might move to Fort McMurray but computer programmers might be moving to Bathurst to get in on the (fictitious) growing animation cluster. Marine biologists move to Victoria but accountants move to Halifax. Crane operators move to Calgary but longshoremen move to Melford. Whatever.

But this lopsided economic reality that forces these Atl. Canadian communities to use what little political power they have to try and hang on for dear life is the heart of the problem. Not EI. That's a symptom. Not a cause. There is some secondary causality there but the primary issue is a lack of good public policy that has left large swathes of Atl. Canada with almost no capacity or value proposition to attract business investment.

Wouldn't it be neat if Fraser, CD, MEI, etc. turned their brilliance to try and fix that problem. Heck, why not AIMS and APEC? But that's too hard and intractable. It's far easier for politicians to prop up with scraps and for think tanks to take the intellectually easy way out.

And the wheels on the bus go round and round.

A couple of emails yesterday on why I am picking on Greg Byrne. My TJ column was entitled "What Keeps Greg Byrne Up At Night" and I was also quoted on the CBC yesterday questionning the advertising campaign in New Brunswick to attract people to New Brunswick.

So, for the record, I actually like Greg Byrne. I think he is far mor active and dynamic (as well as knowledgeable) compared to previous BNB ministers (think Captain Kirk MacDonald and his billion with a 'b'). The TJ column was designed to inform the broader public about the challenges facing Minister Byrne. Nowhere in that column did actually chastise or criticize the Minister nor BNB.

The reality is that the province needs a strong and active BNB that is globally connected and is working with the plethora of provincial and local stakeholders to ensure we have a strong value proposition for business investment.

BNB (and its Minister) need to be the feedback loop for the rest of the government when it comes to economic development. If BNB realizes we will need 500 new animation graduates over the next three years in order to have any hope of attracting animation firms, it needs to provide that feedback to the Dept. of Training. If BNB realizes that without cheaper large industrial electricty rates, we will continue to see declines in forestry (and not able to attract other projecjts), it should provide that feedback to the Dept. of Energy. If BNB realizes that its incentive/tax break programs are not competitive for its targeted industries, it needs to provide that feedback to the Dept. of Finance.

It's all about value proposition today and about effectively communicating that proposition to companies that could be targets for business investment in the province (both inside and external to the province).

On another note, I see the province and ACOA ponied up $1.2 million for this new start up firm in Northern New Brunswick. It said on the news that there were, I believe, 12 jobs involved.

That's about $100k in grants and loans per job for a start up firm.

I can tell you that no large, stable, multinational firm has ever received such money from government to set up in New Brunswick (on a per job basis). They have in Ontario, in Quebec and elsewhere (I think I calculated Michelin in Nova Scotia was $93k per job).

I am not criticizing the start up but I think you can see that giving $100k/job to a startup when there is an over 50% chance of failure (they might boom but the facts are the facts) and not offering similar deals to larger projects is problematic.

But it goes to the systemic problem facing economic development in New Brunswick. We romanticize the small start up and cast a skeptical eye towards the large multinational firm. Don't deny it. Some of you cringe when I even make this kind of analysis.

But I could give you a list of dozens of multinational expansions across North American in 2008 that were achieved at less than $100k per job. Projects creating hundreds of new, high paying jobs and providing long term economic anchors to local communities. And the failure rate (and there is one for sure), among the larger multinationals is a small fraction of the small business failure rate.

Now, I appreciate the loyalty of local entrepreneurs and realize that you will never replicate that with multinational firms who will pull out of communities because of a twitch in their financial projections. But I think we need to be realistic and understand that a healthly local economy will have both - national and international investment as well as local startups.

By now you have likely heard about those two massive turbines that fell off a barge into the Saint John Harbour. The are going to have a hard time getting them up from the bottom because they weigh 107 tonnes each.

With my somewhat twisted mind, when I heard that I wondered why those turbines weren't manufactured right here in New Brunswick. I guess that some folks would say we are too far from market, etc. etc. etc. Apparently, Louisiana isn't too far from the market.

The Shaw Group Inc. (nyse: SGR - news - people ) is putting together a plant in Lake Charles that will build parts for nuclear generators, bringing in 1,500 new jobs.

The idea with this big projects - be they nulear, refineries, wind energy, etc. should be to try and leverage them into longer term economic development opportunities. It would be just as easy to manufacturer those huge turbines in Saint John or Belledune and get them to market as it is in Louisiana.

Want to know why reducing our dependency on Equalization (i.e. self-sufficiency) is a good objective? From the G&M this morning:

The Toronto-Dominion Bank projected four years of red ink, including a $10.4-billion hole in the 2008-2009 budget. TD chief economist Don Drummond said one cost pressure on federal coffers is the more generous equalization formula that the Harper Tories introduced in the 2007 budget.

It's one thing for Daulton to complain about equalization. When the bank chief economists start getting on board, it could become problematic.

New Brunswick's need for equalization continues to go up - year after year.

A business delegation of the Council of the Federation, in conjunction with the Canada China Business Council (CCBC), will travel to China on Nov. 2-7. Premier Shawn Graham will lead the delegation, which will include premiers Jean Charest (Quebec), Dalton McGuinty (Ontario), Gary Doer (Manitoba), and Robert Ghiz (Prince Edward Island).

The premiers and accompanying business delegations will travel to Beijing, Chongqing and Shanghai.

"I am pleased to join four of my colleagues on this trade mission," said Graham. "It will be an opportunity for our New Brunswick companies to build upon existing business relationships with Chinese counterparts, to open new doors, form new partnerships, and create new opportunities for export in the Chinese marketplace."

Not many existing business relationships to build on, eh? The following is a list of all the exports to China from New Brunswick last year. Looks like Irving and a mine up north might do a little biz over there. $3 million seafood - must be the eels. That's about. I guess the $391 in textile bag exports might warrant a visit.

It's deja vu all over again. I remember Premier Lord leading a 'delegation' to Russia early in his mandate to exploit business relationships. And that business relationship building continues to reap benefits. We exported $65,000 worth of goods to Russia in 2005. Total. In 2008 that crept up to $2.3 million - hardly a strategic market.

It is possible, I guess, that the potash from NB goes over there but is accounted in someone else's exports. Who knows? I heard that some of the furniture manufacturers are setting up manufacturing in China. Maybe those are the relationships that need exploiting.

Sure. China is the hottest market in the world and NB has got to get in on the action. Maybe but if so we need to know what action that is.

Exports to China From New Brunswick 2007
32211 - Pulp Mills $ 28,698,878
21223 - Copper, Nickel, Lead and Zinc Ore Mining $12,966,271
31171 - Seafood Product Preparation and Packaging $2,931,486
33149 - Non-Ferrous Metal (except Copper and Aluminum) Rolling, Drawing, Extruding and Alloying $2,459,922
33331 - Commercial and Service Industry Machinery Manufacturing 377,070
21239 - Other Non-Metallic Mineral Mining and Quarrying 341,721
33999 - All Other Miscellaneous Manufacturing 244,508
31111 - Animal Food Manufacturing 103,000
11331 - Logging 93,417
31324 - Knit Fabric Mills 48,357
31141 - Frozen Food Manufacturing 47,322
33329 - Other Industrial Machinery Manufacturing 35,648
33261 - Spring and Wire Product Manufacturing 35,463
31212 - Breweries 28,640
11251 - Animal Aquaculture 25,750
33451 - Navigational, Measuring, Medical and Control Instruments Manufacturing 18,659
33122 - Rolling and Drawing of Purchased Steel 8,866
41819 - Other Recyclable Material Wholesaler-Distributors 4,261
31699 - Other Leather and Allied Product Manufacturing 4,029
33211 - Forging and Stamping 743
32561 - Soap and Cleaning Compound Manufacturing 675
31491 - Textile Bag and Canvas Mills 391
33243 - Metal Can, Box and Other Metal Container (Light Gauge) Manufacturing 246
31599 - Clothing Accessories and Other Clothing Manufacturing 171
33995 - Sign Manufacturing 126

From a press release today:

The Government of New Brunswick has launched a campaign to encourage newcomers and current New Brunswickers to "Be In This Place and visit NBjobs.ca." The bilingual campaign will feature the success stories of seven New Brunswickers who are either immigrants; former New Brunswickers who have returned; or New Brunswickers who have decided to stay in the province.

The campaign will consist of a series of television and online advertisements, running in New Brunswick until March, that will direct the audience to NBjobs.ca, an online job bank featuring hundreds of jobs in a variety of careers.

"One of the key components of population growth is getting the message out about what it is like to be in New Brunswick and what opportunities exist here," Byrne said. "In our population growth strategy, we made a commitment to doing a better job of marketing our province. With this campaign, we are fulfilling that commitment."


When they target the tourism advertising to New Brunswickers, we are told that is to keep NB tourist dollars here. But if they are 'marketing our province' why are they running the ads in New Brunswick? Marketing to ourselves?

The TJ has a spirited editorial today that reads like an open letter to Frank McKenna asking him to run for Liberal leader.

If you Google this blog and McKenna you will see that I was a big supporter of much of his economic development approach. I was disappointed that he didn't take a Jesus and his disciples approach and weave the focus on economic development into the fabric of the civil service so that when he left there wouldn't be this giant sucking sound.

The post McKenna Tories took credit for it but the reality is that more call centre jobs were created under Lord than McKenna. The spade work was done by the former, the benefits reaped by the latter.

But the call centre industry has a shelf life (it seems after anther 550 announced this week the shelf life has been extended a bit) and both Shawn Graham and David Alward should be looking for another rainmaker economic development opportunity - and it likely isn't energy. There will be no 12,000 call centre jobs waiting to greet a David Alward administration should he unseat the Liberals in 2010.

Back to Frank. There is something to be said about charisma and the ability to capture people's imagination with a rousing speech. But the national stage is certainly different than little old New Brunswick. However, Frank has spent the last 12 years building a national and international profile so he is ready.

I agree with the TJ that Frank should run. I am not as worshipful nor do I think that a Frank McKenna PM would necessarily be that good for New Brunswick. The tired old model of more equalization and enriching EI would be tempting for him as well. For Frank McKenna to go abroad and promote Canada to global corporations and for some of them to set up in New Brunswick rather than Ontario or Quebec would be just as politically damaging to Frank (maybe more so) than any other PM. Most Ontarioans are willing to send transfer payments down here but manufacturing jobs? Not likely.

Just imagine the Toronto Star headline if the Telegraph-Journal headline was McKenna brings 1,000 aerospace jobs to Dalhousie. Imagine the National Post headline if the Daily Gleaner headline was PM McKenna delivers 500 Microsoft jobs to Fredericton.

Another Gordian knot, my friends.

I think this will be my last post for awhile on the NB Tories until I see some policies or positions that warrant a comment. I think it is safe to say that the kind of nasty opposition we have had in the last couple of years should subside as the new leader will want to project an image of leadership and positivism.

I think it will be interesting to see what Alward does. From the CP article on Alward's win:

During his speech, he promised ongoing consultation with party members, starting with town hall-style meetings to hear what people want for the province. ``The community and regional process will be followed by a provincial policy convention that we will hold no later than May 2009,'' he said. ``This process will be bottom up, not top down, I give you my word.''

One can only assume that this is some kind of visceral reaction to the current government lobbing these huge policy bombs at the public in what could be construed as a 'top down' approach - French Immersion, post-secondary reorganization, tax policy, forestry. Now, the Libs would say they are putting forward bold new directions for the province and then consulting with the public. Cynics would say they end up with watered down new directions that aren't very new. Nevertheless, Alward is going to 'consult' the party with town-hall style meetings.

At the risk of sounding a bit elitist, what new policy directions will he get from consulting with the party faithful? I am starting to get a little old here and after almost 20 years of watching this stuff closely, I am not sure that this is much more than a political posturing exercise.