I don’t want to post another blog about data centres but there is a good article that was sent to me (with some good links) about Iowa’s ability to attract big name data centres. I have posted at least 20-30 blogs and wrote several columns touching on this issue. I won’t go into it again in much detail. I will say this. Those large data centres are energy hogs. They need the electricity of a small pulp mill. Iowa has some of the cheapest electricity in the U.S. – and has anchored much of its economic development around that – first for power intensive agrifood prodution, now increasingly biofuels (which require significant electricity in the production process) and now data centres.
As far as I can tell, very few of these large scale data centre are locating in large urban centres. They are locating in upstate New York, Iowa and the farmers’ fields of Washington State. There is increasingly proof that smaller urban and rural areas can take advantage of IT-based economic development. The issue, as usual, is the ability to develop a compelling value proposition for those small urban/rural regions. That can be cheap power, it must include skilled workers, etc.
There is hope for a place like New Brunswick – which will not be able to base its economic development on natural resources – to have succssful economic growth but it will be based on this province’s ability to be a great place to do business – for specific industry sectors. It would be impossible to build a broad value proposition that was attractive to all industries. We need to focus – and in fact we always have – now we need to refocus on new 21st century industries. Think about the 20th Century. NB’s economy was based primarily on natural resources and much of the infrastructure developed to support those industries. Now, natural resources are in decline as a percentage of the overall economy and will likely decline even further (although always remaining a major contributor to the economy). So the issue for NB is where will we go next?
Some will argue energy – nuclear, LNG, Eider Rock (oil), wind, etc. I tend to agree with the energy focus but my issue is engineeing the energy hub to mean cheap energy here in New Brunswick – to attract power intensive industries.
Some say – and have told me – that it is Soviet-style planning to ‘pick’ one industry over another and focus on it. I disagree – wholeheartedly. Government has access to scarce resources. It can only direct them in certain ways. If the government is going to invest in areas that influence economic development (from tax policy to education policy to infrastructure) it should make those investments in ways that will generate the best return to the public on those investments and focus must be the key. Ontario has spent billions to develop the auto sector. Quebec billions on pharma. BC billions on new media/film. Alberta billions (in forgone royalties/taxes) to develop the oilsands. All could have said “We can’t focus. That’s Soviet-style planning”. But all didn’t and have strong value propositions to develop those industries in their provinces.
What industries have a compelling value proposition to invest in New Brunswick?
That’s the question.