I am interviewed in the TJ today. I had a wide ranging discussion with the reporter and he settled on my comments regarding innovative economic development. I wanted to supplement that with a little more analysis here.
I think it is absolutely critical to get out front of emerging industry sector opportunities and build an early value proposition before the big guys (Ontario, et. al) get in. The ‘traditional’ way that economic developers think about economic development is to look at our existing industries and then try to develop a value proposition and wrap around some ‘development’ work to try and see if the industry can grow.
But what if your existing industries are either a) not in growth mode or b) you don’t have much of a value proposition for growth? Then what do you do? Sometimes, you have to look out on the horizon, identify fast growing or industries with potential and then develop a niche value proposition for those industries in your jurisdiction.
There wasn’t a single customer contact centre in New Brunswick in 1988 but some innovative thinkers in Fredericton realized it would be a massive employment engine over the upcoming decade and developed the NB value proposition. There wasn’t a single aquaculture farm in 1985 (as far as I can remember). If we had said we must focus on “what we have here” neither of these opportunities would have been developed.
PEI has an ambition plan to grow a nutraceutical industry and is investing heavily in resources and infrastructure to make it happen. There is no natural reason why the nutraceutical industry should grow on PEI? Cripes, blueberries, blackberries, cranberries, etc. grow better in New Brunswick (as one example). But the industry is fast growing as people look to non-pharma based remedies.
Take the following table for example. It is the list of fastest growing occupations in the U.S. I would like us to find opportunities even further out there but this list is instructive. If you mapped this list to the BNB targeted growth sectors how much overlap would you find?
This is only an example – I am not recommending it but for instructive purposes, if I was looking at this list it would reinforce the economic development opportunities in:
Financial back offices
Telecom-Internet based networking industries
Specialized health care (like the May Clinic)
Obviously the recession may change this but the logic is sound. What are the emerging growth industries (those just over the horizon) and how can NB get in the game before the big guys?
Last example. In 1992, New Brunswick and Manitoba were the only jursidictions with booths at customer contact centre trade shows. People would curiously come up to the booth and ask why a jurisdiction was at a trade show for customer contact centres? By 1998, every single province in Canada except one was at the largest customer contact centre show in Toronto. In the U.S., these shows ended up featuring dozens of jursidictions.
We need to get out front.
30 Fastest Growing Occupations in the US (2008) (Source: BLS.gov)
Network systems and data communications
Personal and home care aides
Home health aides
Computer software engineers, applications
Veterinary technologists and technicians
Personal financial advisors
Makeup artists, theatrical and performance
Medical assistants
Veterinarians
Substance abuse and behavioral disorder counselors
Financial analysts
Social and human service assistants
Gaming surveillance officers and gaming investigators
Physical therapist assistants
Pharmacy technicians
Forensic science technicians
Dental hygienists
Mental health counselors
Mental health and substance abuse social workers
Marriage and family therapists
Dental assistants
Computer systems analysts
Database administrators
Computer software engineers, systems software
Gaming and sports book writers and runners
Environmental science and protection technicians, including health
Manicurists and pedicurists
Physical therapists
Physician assistants
lol
“..nutraceutical industry and is investing heavily in resources and infrastructure to make it happen…”
I have some familiarity with this area; I’d be very careful as very few of these ‘nutraceuticals’ really do anything. Not sure how much long-term market potential there really is there. I think that the nutraceutical market is very much at the mercy of discretionaly income – long recessions will likely stunt demand.
However, generally speaking, you are right that NB needs to find a way to get out in front re attracting emerging sectors. Guess its a question of which ones you pick, how much effort to expend per sector, and your tolerance for a particular ‘losers’ / ‘winners’ ratio. The political opposition will carp at every ‘failure’ and minimize every success. There needs to be more discussion in the media around the idea that there will be failures for every success so that the public will have a certain tolerance for that. At the moment, the public seems to see the need for bailouts but I don’t sense a lot of support for a longer term approach that will accept failures on the road to success.
Yeah, well instead the government gave $18 million to the Irvings.
We don’t have one industrial strategy problem here in New Brunswick. We have two:
– how to attract new industry
– how to keep the old ones’ hands out of the till
Nice article and good to see ED getting some press. It would be great if one or all of the political parties were to make ED a priority (and I mean ED not political gifts and investments spun to appear like ED).
I do think you give too much credit to BNB for the contact center business. If we did not have a progressive telco with fiber and digital switches, I doubt it would have been such a successful initiative. This is how we should view NB Power; not as a means for us to subsidize our wasteful energy habits but as the basis for ED initiatives that can make us globally competitive.
One of PEI’s advantages is the luxury to focus. Their small size has allowed for concentrated efforts in specific areas such as aerospace. Have you ever heard complaints that Summerside gets all the aerospace business? But in NB, Moncton, Saint John, Freddy and the ‘chi all have competing aerospace goals and NB is fighting over the crumbs of the successes in NS and PEI. Focus also explains some of NB’s success with contact centers; for a time, NB was allowed to focus. We also had top leadership engaged promoting it which helps get the job done directly (the CEO of NB dealing with the CEO of UPS) and indirectly (by aligning our massive ED work force which is likely exceeding 500 employees).
NB is hesitant to act because they may upset a region, city or group. We need to identify, nurture and exploit some competive advantage then promote the hell out of it with a unified voice that is led by our Premier. It worked for the contact business and it can work for another sector.
Regarding aquaculture, our natural advantage was the flushing action of the highest tides in the world.
It still took vision, persistence and investment in supporting technologies to grow it. We were progressive with this industry; the sustainability of the planet will force us to be eating more fish and most of that fish will be farmed.
However, like the contact business, we have success and then relax. We need to sustain investment and go to the next level to stay innovative. The NB contact business has pretty much lost any competitive advantage. Telephone infrastructure is replaced by internet technology available in most homes for the equivalent of a few AC/DC tickets. Bilingualism is overcome by progressive multilingual socities. And our cheap labour force; cheap in North America maybe.
I don’t mean to be negative as I appreciate your positive energy. However, I do think we need some sort of homegrown or naturally ocurring competive advantage to build an effective ED effort then we need sustained investment to keep it competitive.
I do admit to being somewhat confused by this line of thinking, its almost like taking the ‘worst to first’ slogan to its economic development field. Why is it necessary to have a ‘niche’ on some field? What’s wrong with just having some decent jobs? In the article you brag about how the call centre industry was such a great idea, yet at the same time talk about how much better the ICT industry is (wouldn’t you conclude then that the ICT would have been the correct strategy?)
Regardless of that, I’m sure most readers have noticed the complete lack of ANY kind of preperatory environment for almost ALL of the sectors mentioned above.
Couldn’t agree with you more Stephen@Stephen Downes
Why is it necessary to have a ‘niche’ on some field?
Here are two reasons: 1) it worked for NB in the past with contact centers. 2) we have been trying the ‘market everything and chase every fad’ for the past 20 years and have failed; any recent success is still linked to contact centers that we identified as a niche 20 years ago.
Take a look at PEI’s economic development strategy. They focused on aerospace developing their one related asset, their closed air force base. They made development money available, developed training programs, and agressively and consistently promoted the sector. See http://www.aerospacepei.com/ From nothing, they now employ 800 and export $300M. Not bad for a province with the population of greater Moncton.
Most people would agree that the economy is global resulting in global competition. To compete, you have to be world class or prepared to be continually chasing the leaders. NB’s population would fit into a couple NYC skyscrapers; as much as we might like to think it, we are not likely to be globaly competitive in every sector. That is why we need to taregt niche opportunities.