Attracting foreign direct investment to New Brunswick must be the linchpin of any economic development strategy. There was$5.2 trillion in foreign direct investment into OECD countries from 1994-2003. Just a small fraction of that into New Brunswick would have completely changed our economic fortunes.
Some governments believe that all you have to do is cut taxes and reduce red tape to stimulate economic development. Others focus on ‘innovation’. Still others believe that small business is the way to go.
Well, I’ll stake my 15 year career studying economic development around the world that the core must be attracting our share (or more) of the world’s investment flows. By investment, I mean both capital into our local firms but also international companies making investments here by setting up manufacturing plants, call centres, information technology centres, etc.
This strategy has been deployed successfully in Ireland, Spain, the southern U.S., etc. On the other hand, however; I have yet to find one example of a economy such as New Brunswick transform itself soley on the basis of small business tax cuts or by using the ambiguous ‘innovation’ approach.
If New Brunswick were to attract a significant stream of foreign investment for a sustained period of time, we would see a turnaround in the economy. Small businesses would flourish – benefitting from the new found economic growth. Innovation would happen as companies would reinvest their profits into new ways of thinking.
Sounds easy enough, doesn’t it? Well, as long as our guys spend the least in North America on economic development and the most on welfare, you can expect continued stagnation and decline.