Economic developers or bankers?

This is a recurring them either directly or indirectly on this blog and it is not just an issue for New Brunswick.  In fact, I had a long conversation in a colleague in another province and he sees the same thing.  So with no specific jursidiction in mind here is my position.

I think that some economic development agencies at the provincial and federal level see themselves increasingly as banks providing funding to companies.  Loans, loan guarantees, grants, etc. 

I have said that any financial assistance programs should be a minimal part of what an economic development agency does.  In fact, I prefer tax-based incentives which don’t involve cash at all.  If there is cash going out the door I think it should be extremely objectively applied. I worry that politics intrudes when we dole out money (no specific jursidiction in mind).

Economic developers should be about development – i.e. developing projects and industries that lead to the growth of the tax base and the creation of good paying jobs and career opportunities.

If economic developers become bankers (or account managers for clients looking for money), then they abdicate the more important functions of their role – development. 

Further, I think that bureaucrats (some of them) much prefer the role of banker because it is easier than the role of economic developer.  It is far easier to decide like Solomon who gets access to the piggy bank than to work hard and try and attract investment here or try and convince federal agencies and national companeis to do R&D in this province or to work on industry-specific infrastructure development.

Those things are hard.  Doling out money is easy. 

Furthermore, it flips the role of the economic developer from an advocate for development to a decider of a business’ fate.   That’s not my definition of economic development.

Economic development agencies should be far more than just gatekeepers for the public till. 

Let’s get back to the business of economic development and get financial programs back to where they belong – one small part of a broad and deliberate economic development strategy for the province (with no specific jursidiction in mind).

2 thoughts on “Economic developers or bankers?

  1. Excellent post (in fact you’ve had a great week of posts).

    Here’s a question. Some, including yourself, have shown interest in the Nova Scotia Business Inc. model rather than what we have in New Brunswick. A significant aspect of NSBI is financing. Of course other aspects are the private sector influence, and a small group that are focused.

    So, is it the financing aspect of NSBI or the model (small, focused, business driven) that is attractive?

    I would argue the later. New Brunswick’s economic development effort has about a dozen agencies, some with hundreds of employees, falling over themselves in a fragmented effort that has little budget left after paying for staff, offices and travel; it hardly has a chance to be efffective. Furthermore, those that do have money, like RDC, spend a substantial portion on community halls, hockey rinks and sewage treatment under the heading economic development.

    New Brunswick’s economic development effort has become crowded, confusing, fragmented and ineffective. I am not sure we have to copy someone else’s model thinking they have the silver bullet. The silver bullet is a tight knit group of focused and motivated professionals that are supported by top leadership.

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