A few of us have been chatting about the limited mention of the role of the private sector in the government’s new economic development plan. There seems to be a lot more alignment and focus on government efforts but the only reference to the private sector involves something called ‘advisory forums’. This might just be an oversight as the plan was meant to lay out the case for action and the efforts of government but I think we need more private sector involvement not less in the coming years.
What’s that look like? I have written about this in the past in numerous columns and blogs but essentially my proposed model would be a hybrid where regional economic development strategies would be led by private and public sector leaders around the province and sector-specific growth opportunities would be championed by teams of private and public sector leaders.
For example, I would like to see industry leaders stepping up to identify sector growth opportunities and working with public sector partners to assess potential and map a plan for growth. This was the thinking behind Future NB, if you will recall and I don’t limit this to the standard basket of industries (ICT, aerospace, etc.) that we have been talking about for 20 years.
I’d like to see a few leaders in the legal services industry get together and assess the potential of New Brunswick becoming a national back office for legal services. I’d like to see leaders in the health care space get together to determine if there are niche segments of the industry where New Brunswick could provide services across North America. Right now radiologists in Ontario are assessing test results for the Government of Newfoundland and Labrador. I’d like to see our language translation sector get together to determine if there are opportunities to attract more of that high value, good wage sector to New Brunswick.
There are about 900 six-digit NAICS industries in Canada from soybean farming (NAICS 111111) to International and Other Extra-Territorial Public Administration (NAICS 919110). I wouldn’t rest until every single industry group was assessed for potential opportunities.
I tell you this because some people think ‘private sector involvement’ in economic development has been superficial at best in recent years and that it is time for government to step up and take control. They see the private sector as only wanting handouts form government. They cite the resistance of many NB businesses to efforts meant to attract investment to the province as proof that local firms are only focused on ‘looking out for themselves’ and not on growing the economy.
I think this is too cynical (although there are grains of truth). In my view, effective economic development – forgive the cliche – rises all boats. Attracting Google to New Brunswick would be good for the SMEs in ICT. Attracting a few larger multinational life sciences research firms would bolster the potential of entrepreneurs in that sector.
I admit my model requires a greater commitment from the private sector – a commitment that may not be there in all sectors and regions of New Brunswick.
In the end, if firms are going to put valuable staff time and financial resources into ‘economic development’ it can’t be for philanthropy. They have to see what is in it for them and that is okay with me. NBTel spent a pile of money and assigned senior people to the efforts to attract customer contact centres and back offices back in the 1990s but they reaped a substantial reward from that investment. I am not saying all opportunities will have such a well-defined case for private sector involvement but we need to frame the conversation in terms of mutual benefit.
Let’s pencil the private sector back into the economic development plans for New Brunswick.
Isn’t “Invest NB” an all private sector led organization? Heard from them lately?
What is stopping legal companies from following your suggestion? They certainly don’t need any government help to do that. However, you are a little behind the times, because there’s this thing called ‘the internet’, where you can go online and see that legal firms ALREADY outsource all over the world. You can do transcription in your home, so there is no need for an ‘office’ of dedicated workers in ANY province.
In health services, well, just like education, you are talking mostly about government, which either outrightly controls it, or directly funds it. Doctors, for the most part, are busy enough.
But you are messing up your themes. “Attracting Google” is NOT the same thing as assessing industries for potential growth sectors (trying to sneak in your pet theme eh?:). You want Google, I’ve got news, without government, you’ve got an even tougher road to hoe. But again, to posit MY main theme, the ONLY way to attract Google is to develop HOME GROWN companies made of educated high tech workers who will build companies that Google may buy. But if you work on that, you don’t even NEED Google, you may get the next Google, or do fine with a whole bunch of ‘Radian 6’s’.
That means getting control of government though. It means using legislation and government tools that control health and education to get all those people who are going to school and getting them to stop thinking “boy I love teaching, I can’t wait to finish school so I can get a teaching job” (since there ARE none), and getting them to think “boy I love teaching children, I’m developing software that will help teach children and marketing it all over the world”.
Or, as this blog suggests, you can beg and plead for business people to do more than they are doing-running successful businesses, and hope that they will also do the work of supplying jobs to everybody.
Didn’t mean for that to sound so ‘cynical’, but it cheeses me when people talk about the private sector ‘doing more’ and then end with ‘and we should let them’. Who is stopping them? They already have the lowest taxes in the country.
The fact that they HAVEN”T done that, indicates a VERY high probability that they won’t. In short, if you WANT it done, you’ve got to look to…..those guys we don’t like to talk about.
PS: why is it cynical to think that a company wants cheap support to help it maximize profits, and doesn’t want to welcome other industries that may drive up wages and increase competition for both workers and customers? That seems pretty common sense to me. That Irving does that certainly doesn’t SURPRISE me, and I don’t even blame THEM for it, I blame the government that caves in to them. And before we get too weepy for the poor business people, I’m pretty sure that old JD Irving now has more public statues in the province than virtually ANY other public figure.
The private sector is well and fine but when government is 35% of the GDP it too must be part of our strategy. Below is a letter I just submitted to TJ to counter their anti-equalization editorial.
Re: Equalization? It’s Not Working, TJ, May 11, 2012-05-11
In our more conservative Canada your editors claim that sharing the wealth is outmoded, unfair to the rich provinces and, simply, not working for the recipients. The annual $1.6 billion equalization payment just hurts our capacity to innovate – that’s the difficult truth New Brunswickers must digest – no quid pro quo needed. Just bite the bullet and start emulating the dog-eat-dog example south of our border. It’s working for them, right?
If creative destruction were truly our ticket to wealth creation there would be little debate about this mantra of cutting taxes, chopping the bureaucracy and letting ‘trickle down’ effects work its magic. But there is virulent debate about the merits of such raw capitalism and for good reason: it produces a polarized society. A balanced editorial would have mentioned the need for New Brunswick to negotiate something in return for giving up equalization. Being patsy to right-wing orthodoxy will not get us very far on the road to economic growth.
Here’s an idea we should push hard as a quid pro quo: New Brunswick has ten percent of Senate seats but only three percent of the seats in the Commons. While our Commons share is dropping our Senate share is stable. We should build on this strength by supporting the move to elect Senators if it would give that body more say in the work of Parliament. Our voice in the corridors of power in Ottawa has been marginalized for too long. Major decisions which polarized the economy away from our province have gone unopposed, e.g., war time procurement. If we play a harder ball game we will have more opportunity to prosper.
John Skelton
Atholville