A lesson in New Brunswickian economic development logic

I had a conversation today with another of these economic developers that is known to push the envelope as it were when it comes to this business.

Anyway, he told me that the powers that be (so to speak) in provincial economic development circles these days want to place more emphasis on supporting local companies and less on attracting foreign investment.

That’s where the logic part comes in.

Statistics Canada tells us that 80% of small, local businesses will go bankrupt within five years.

A recent world bank study confirmed that 80% of all foreign firms that invest in your community will re-invest within five years.

We, therefore, want to put our effort in helping the 80% stave of bankruptcy for another year or so. I guess the 2-3 foreign investments over the past two years (not including the virtual call centre) was too much for the bureaucracy to handle.

Which is probably why New Brunswick is at the arse end of Canada and the US when it comes to economic standard of living and our government’s ability to raise taxes to pay for public services.

Don’t get me wrong. I have always said that a tightly focused support effort designed to help real entrepreneurs grow into national and international markets – is positive economic development. Nurturing grass roots efforts to build community economic development capacity can be positive economic development. But attracting lead firms, well capitalized multinationals with good business models, must be part of the mix.

In addition, I find it hilarious that New Brunswick’s New GovernmentTM releases position papers (i.e. self sufficiency task force) stating that we must be much more intentional about attracting global investment and a federal Commons committee out this week recommended repositioning much of our trade development effort into foreign investment attraction and our boys finally decided to read now the memo from 1976 that recommended supporting local firms.

Funny stuff, if it wasn’t so bloody serious.