On to NB Inc.

A pile of interesting articles today in local newspapers.  Don’t forget to subscribe to my Twitter feed as I am now posting these articles as a quick way to get access  (Twitter: Jupia).

Peter Lindfield proffers a few ideas on Business New Brunswick this morning.  I think much of what he says makes perfect sense and echos what others such as Donald Savoie have been saying.

The more I think about it, the more I am convinced that ‘economic development’ in a place like New Brunswick is better off outside the formal bureaucratic structure.  Because BNB is about attracting industry and fostering innovative companies and building key clusters and incubating talent, etc. I think it needs to have a CEO at the top and a board and the flexibility to think and act like a business – like the organizations it is trying to attract here.  It needs the flexibility to move quick.  It needs the flexibiity to motivate and empower staff.  It needs the flexibility to attract the best and brightest talent.

And something that is not as appreciated but I believe is important is the ability for business leaders to deal with business leaders. 

The CEO of NB Inc. will be far better positioned to deal with the heads of international corporations than a Deputy Minister.  Sure, at that level it is mostly optics but optics matter.

But the broader issue is getting economic development back to the business of development.  The ‘banking’ function of BNB should be a secondary consideration.  Handing out cash should be one small part of what economic developers do in this province (you know I prefer tax-based incentives anyway). 

Economic development involves a bevy of actions that are taken to create an environment where specific industries can grow and prosper here.  It’s about selling the value proposition for these specific industries far and wide.

In the end, BNB (or its incarnation) is the single most important organization for the realization of the objective of economic self-sufficiency.  It needs to have BHAGs and the resources to achieve them.

I believe NB Inc. is a far better structure to make this happen.

23 thoughts on “On to NB Inc.

  1. I would be on board with the NB Inc idea if it resulted in the consolidation, alignment and focus of the fragmented ED efforts scattered around the province. If it only results in more duplication to get us over that 1000 ED employee milestone, it will go no where.

  2. “We can learn a lesson from Nova Scotia Business Inc….”

    I’d agree in principle that a business-led NBInc might do a better job of attracting business to NB. However, I’d take issue with the above quote, taken from Mr Lindfield’s op-ed. How can the ‘success’ of NSBI be separated from the confounding effects of the energy industry on Halifax? NSBI might have facilitated some aspects of the establishment of that industry, and they may have helped the hangers-on that followed, but it was the presence of the energy resource that was critical. Not sure that NSBI is really a model demonstrating the success of this approach.

  3. When I refer to the success of NSBI, my comment had more to do with the fact that criticism has emerged from Cape Breton, Yarmouth, Digby and other locales that NSBI tends to focus on the biggest deals which tend to land in Halifax/Dartmouth. NSBI would say that their incentives do not discriminate on geographic lines.

    An “NB Inc” would need to ensure that activities were not focused inordinately on the three largest cities. Hence the geographic targets — and putatively an improvement over the NSBI model.

  4. ” NSBI tends to focus on the biggest deals which tend to land in Halifax/Dartmouth.”

    I wonder if the ‘biggest deals’ being in Halifax is a consequence of the success of the energy resource re Halifax. Perhaps a tipping-point has been reached in Halifax where success builds upon success, irrespective of NSBI. NSBI might simply be a product of that success, rather than a significant participant. If that is the case, you could argue that NSBI has had no impact at all (especially since, as Mr Lindfield says, there is criticism that NSBI is Halifax-centred).

    Or, perhaps I am just being too cynical re ED orgs.

  5. I am aware of numerous accounts over time where NSBI has indeed had a positive impact. One can indeed argue that improvements could be made, in strategic outlook, operational comportment or in transparency, but NSBI is not, in my view, focused more on the energy sector than is warranted, given the potential opportunities. But I hasten to add that NSBI also frequently operates in close conjunction with its partners, such as the Greater Halifax Partnership, ITANS and others. This depth of collaboration is less conspicuous in NB.

  6. Cooperation is dangerous as it makes the duplication of effort and overlapping mandates obvious. The biggest advantageous of NSBI as they are clearly charged with being the economic development lead.

  7. The irony here is that I have nothing against government funding for cabanas and bathrooms in a municipal campground. The way municipal funding works, there is very little money for them to do this kind of thing themselves. What is a bit frustrating is that the headline is about investing in Charlo infrastructure and the Minister talks about the importance of infrastructure “to create new opportunities to help us attain our goal of self-sufficiency”. How will a new cabana at the campground help reduce $1.7 billion/year in Equalization? Again, I have no problem with the expenditure. I have a problem with the spin doctors tarting up what should not even be a public announcement as some type of strategic investment in ‘infrastructure’ that is going to lead to self-sufficiency.

  8. @Peter Lindfield

    “An “NB Inc” would need to ensure that activities were not focused inordinately on the three largest cities.”
    > This statement is the worst place to start. I thought that the idea was to measure performance based on results. How could this be achieved if we are already putting the NB Inc concept in a politically motivated cage? Any thoughts?

  9. I think we need to build up the value proposition in Northern NB but as I have said all regions of the province need to play their part. I would expect the three ‘big’ cities to be key but I think there is opportunity for the North as well.

  10. @Anonymous

    With respect to a “politically motivated cage”, an NB Inc. would have objectives to serve all NB, not simply the 3 major cities. There are value propositions to support the development elsewhere in the province (Edmundston, Miramichi, Caraquet, et.al.), and these targets would be consistent with geographic ones. Similarly, industry focus would include agriculture, forestry and the fisheries — which incidentally still collectively dominate the NB economy. This is not political motivation. This reflects the reality of the need for economic development everywhere in the province.

  11. @Peter Lindfield

    I am sorry, but I am still not convinced. I can’t stop wondering WHO will determine/identify the “value propositions to support the development ELSEWHERE IN THE PROVINCE” and, most importantly, HOW this will be done (my apologies for the capital letters, I don’t know how to italicize here).

    I strongly believe that NB Inc should be left alone to develop its strategy and action plan (hence the arm’s length denomination). It would then be the mandate of a newly created/revamped NB Department of Economic Development to assist the cities and regions in building their business case.

  12. @Anonymous

    Just to complete my line of thought: I think that the only thing that NB Inc would have to ensure is that activities are focused on the cities, regions and industry sectors that have a REAL VALUE PROPOSITION. But it would be the mandate of a different government department/agency (RDC? the Enterprise Network? an NB Department of Economic Development?) to work towards building the value proposition of cities and regions.

  13. I think you are right to differentiate between the active economic development and value proposition development. Value proposition development is a wider, encompassing effort that includes workforce development, targeting immigration efforts, investing in key regional infrastructure, tax incentive development, natural resource management, industry association and capacity building, R&D support, etc. Whether or not NB Inc. or some other entity plays this aggregating role, it needs to happen. You can’t sell smoke and mirrors. We need a real value proposition to encourage investment in key sectors.

    I think it is vitally important to have a ‘sales team’ that sells NB to the world (and to NB-based firms as well). We need to differentiate between the two functions and the two skillsets. You can’t put people with no sales acumen and no talent for building relationships and networks out in front of potential clients. Similarly, I wouldn’t put my best sales people in the backrooms discussing infrastructure.

    Build the value proposition and give the sales guys/gals something to sell.

  14. The key to our prosperity is very simple. We need to better sell NB products and services. And social justice demands that we include all NB in this equation; lobstermen, woodlot owners, miners, programmers, teachers, everyone.

    In my current business and in my previous life as a regional VP in a large multinational, I am/was responsible for a P&L with multiple lines of business (LOBs), with varying value propositions. In neither case would it be satisfactory to only sell the “easy” LOBs and simply shrug when asked about the others. We either sell them all and make our targets or others will be found who can and I would be, as the saying goes, “made available to the industry”. If a competent executive team is tasked with selling ALL LOBs, and the value propositions hold water, the TCV targets can be achieved. As David points out, the right sales team will be critical. That team is not in place today.

    Finally, no one doubts that all industries will need to “buck up” to be competitive — forestry, ICT, manufacturing, everyone — to have a value proposition that will lead to sales. This implies a lot of work that we cannot avoid. Not everything in NB currently holds water. But we can make enormous improvements with patience, sacrifice and hard work. Investments will need to be made, and in the long term as well as the immediate, but it is not merely a matter of money. It is also about perseverance, nurturing innovation, stepping beyond our own borders and engaging with the world.

    I can understand your skepticism, and on behalf of NB Inc., it will be up to politicians to persuade New Brunswickers that a better way is possible. But at the end of the day, it will up to each of us to act. I believe it can be done.

  15. @Peter Lindfield

    “But we can make enormous improvements with patience, sacrifice and hard work.”
    > Here is where the challenge resides. I am one of those who believe that politicians have two choices: do the hard thing and leave an enduring positive legacy or just take the easy path and do what gets them re-elected.

  16. Graham seems to have done the hard things quite well. He was ruthless in making budget cuts etc., but wise in implementing the tax reform. It didn’t win him any fans throughout New Brunswick, but many in Toronto have been lauding his political decisions.

  17. I don’t agree Jon. In fact, Graham is VERY popular amongst many in the province, particular big wage earners. The first tax increase was temporary, and was not proportional, so middle class earners had a bigger proportional increase than the wealthy.

    Cutting taxes is not ‘reform’, the reform is what few are talking about, which is that the number of income tax levels are being reduced, this will mean, again, that high wage earners will save more money. They save again on decreases in capital gains, and corporations-health professionals, save again with lower corporate taxes.

    We already know, in general, what makes a decent society, and that is a more or less equal distribution of wealth based on work and investment put into it. The liberals have been aggressively decreasing the tax load on the wealthiest, while cutting services to the population.

  18. Mikel, you’re right, I should have said that he didn’t exactly increase his supporters. True, he did gain a lot of support with the high wage-earners and professionals, but the middle and lower class have been crying foul to anyone who will listen. I actually support his tax related decisions, and hope that I can benefit from then in the near future if I return to NB.

    It seems as though David’s report is garnering a lot of attention throughout New Brunswick. This opinion piece in the Telegraph makes reference to the modular fabrication proposal.

    It seems as though “modular fabrication” is becoming somewhat of a buzz phrase, as I’ve heard it from more than a handful of people since the report was released. I seriously hope that individuals from the North will get behind this initiative, but so far it seems to have gotten little to no attention from the average citizen in the North.

  19. I don’t like what Nova Scotia has done at all. The board is still handpicked by government (and not elected by the people of Nova Scotia), and we all know how poorly these guys are at steering the ship in the right direction.

    Plus, it would be far less transparent since the officials running the pseudo corporation would not be accountable to anyone.

    I’d rather have an legislative commission (with representation from both sides of aisle) do a full audit of the department and then report back to the legislature with their findings (hopefully the report offers some advice on what to scrap and/or keep around). What’s working and not working so to speak.

    Then, after that is done, the government should take a serious look at reforming the department so that it is more transparent. Let public officials, citizens have greater access to project funding under a revamped access-to-info act. Nothing makes officials think twice more than having their decisions scrutinized in the public arena. At the moment, this just isn’t so.

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