Inculcating neo-McKennaism

I have written on this subject in the past but I think it is well worth repeating as we head into a new year.

One of the only policy initiatives from the McKenna era that worked was his focus on attracting new business investment into the province. He envisioned and then sold the notion of New Brunswick becoming the ‘back office’ for North American business. His vision was that customer service functions, accounting services, IT development, etc. could be done here cheaper and better than in the large urban markets.

And he had some success with this vision. By my count there are close to 20,000 people working in this functions today that have employers that are based in Toronto, Chicago and beyond.

But many people, including Donald Savoie, have pointed out that the actual number of net new jobs during McKenna’s tenure was not overly impressive. In fact, New Brunswick’s employment growth was significantly below the national average during his tenure.

I would point out that there were steep declines in other sectors during the recession of the early 1990s and the aftershocks of Federal job cuts, etc. and that without this badly needed external business investment New Brunswick would have looked more like Newfoundland during that period.

But the fact remains that overall McKenna was not able to achieve his vision. And India picked up the ball and is now the ‘offshore’ version of what McKenna was striving for. In that country, there are literally several hundred thousands of workers doing customer service, software development, market research, medical transcription services, etc. for North American companies.

Now, New Brunswick needs to position itself as a ‘nearshore’ version of India. Not nearly as ‘cheap’ but closer, more secure and with great talent. But I’ll leave that for another day.

The point is that McKenna failed on two points: 1) not putting enough emphasis on ‘product development’ and 2) not inculcating his vision into the ranks of the economic development department and indeed across all of government.

I’ll start with point 2) first.

Ask anyone who remembers economic development from the early to mid 1990s and they will tell you it was the McKenna show. He was the sales guy. He got deals done. He was the closer. His office generated and worked hundreds of sales leads directly from the 2nd floor of the Centennial Building. The Department of Economic Development at the time played a support role – they were brought in to structure incentive programs – but essentially it was the McKenna show.

So when he left – so did the infrastructure.

I said back then and I’ll say today that what we needed was 20 McKenna’s (you know, the whole Jesus and his disciples model) – spread throughout government. And a top sales team indoctrinated in McKennaism.

The government in Ireland changed hands 4-5 times during the Irish miracle that led to that country leading the globe in foreign investment for something like 18 of 22 years in a row. Despite the changes in government, the focus on attracting industry did not waver.

Now you can call Premier Lord’s call in 1999 for a ‘made in New Brunswick’ solution to economic development (a renouncement of McKennaism) – political opportunism. You can call it political immaturity. But the bottom line is that there was very little infrastructure left to convince him otherwise.

So, my advise is this. Neo-McKennaists realize the strategic importance of a Premier. He/she must cast the vision and provide tireless leadership. But he/she must also spend time training up dozens of mini-McKennaists and making this ideology pervasive across the government and into the communities. This must transcend political party and be embedded in the culture of government and community development – it is definitely not there today.

On point 1).

With the ‘call centre’ sector, McKenna had an excellent ‘product’. Bilingual labour, lots of it, lots of empty buildings with cheap rent and great telecom with NBTel. Sure, he had to do some great sales efforts but the underlying value proposition was very strong.

This is not the case with other sectors. They tried plastics in the 1990s. That failed. They tried textiles in Northern NB. That underwhelmed. They tried online learning. That sputtered and all but failed.

The point here is that just like any organization, economic development needs to be nurtured. We need to carve out a unique value proposition – one that would be compelling to industry. Then we need to put on the McKenna hat and sell, sell, sell.

But if you are trying to sell Yugos and you are competing with areas that make Ladas for much cheaper – you will fail.

So, if we want to attract online learning (e-learning) companies, we need to step back and ask ourselves what infrastructure needs to be nurtured to make us attractive to this industry? Do we need to train 5,000 teachers as experts in online instruction? Do we need to teach specific IT skills? Do we need to establish a world-class e-Learning R&D centre in the province? Do we need to partner with a few top e-Learning providers and attract them here as anchor tenants in this industry?

And we need to do this with other sectors where we deem we have some advantage.

So, to sum up neo-McKennaism involves creating a culture in government and the communities that is open to and realizes the strategic importance of opening up NB to global investment. It involves having dozens if not hundreds of McKennas throughout the province. And it involves picking a few key sectors where we have some advantage (and that are growing) and building a solid infrastructure around them that would be attractive to global industry.