Place and economic development

In recent years, I have become increasingly concerned about how policy makers view economic development in this region.

There seems to be a growing belief that economic development is solely tied to geographic-based factors. For example, if you have minerals in the ground, you can be a mining town. If you have fish off your coast you can be a fishing town. If you are located on a major highway in a central location, you can be a retail and service hub.

But what happens when the forests, fish and minerals are depleted? What then?

There was a study done a few years ago (I can’t find it and that’s a shame) and I remembered one key finding. The study determined that only about 50% of business investment decisions were based primarily on geographic-specific factors such as local supplies (forests, minerals, etc.) or proximity to markets, etc. The other 50% were based primarily on other non-geographic specific factors such as the quality of the labour force, the operating cost environment, government financial incentives, airports, roads, etc. So 50% of business investment decisions are based on factors within our scope of control.

Sure, we won’t attract a firm that wants to put a sales office in New York City. Sure, we won’t attract a firm that wants to be on top of an oil field in Alberta.

But we should be able to attract our share of the other 50%.

Why is Mount Allison in Sackville?
Why is Michelin in Kentville?
Why is Toyota in Huntsville, Alabama?

I’ll tell you this, it had nothing to do with where the community was located on the map.

I find this attitude is creeping into the policy making across the spectrum in Atlantic Canada. Governments are quick to finance tourism projects (based on geography) but seem to be disinterested in financing new auto plants or semiconductor plants or another other kind of plant that does not make its location decisions based on geography.

This, in my opinion, is a cancerous economic development policy. If the mines close in Northern New Brunswick, then we slowly let the area die. If the forestry is not able to produce the jobs and employment it did in the past, so be it. If the fishery is in decline – it is inevitable that communities will decline.

50% of location decisions are not based on geography. That should give us hope that we can attract business investment to Miramichi, Tracadie, Bathurst and even Moncton, Saint John and Fredericton which are not exactly tearing up the track when it comes to attracting business investment.

Where we should be focusing our efforts is not on ‘tourism’ or creating small businesses or stimulating ‘innovation. We should be singularly focused on developing the business conditions that would attract business investment into these communities. What strategic investments need to be made? What partnerships need to be forged? What marketing efforts need to be initiated? What infrastructure needs to be built? What attitudes need to change?

I will be writing more on this subject in the coming weeks but this is my initial thought.