ICYMI: Not your father’s Fredericton

From a recent TJ column:
If I asked you to give a thumbnail sketch of the Fredericton economy, you might be tempted to say it is “a government town”.

While public administration remains a vital part of the regional economy it is now far less important than it was 25 years ago. In 1987, there were 16 workers in the public administration sector out of every 100 in the employed workforce. By 2012, that number was down to 11 out of every 100 employed persons.

The fastest growing industry group in the past 25 years by a wide margin has been professional, scientific and technical services. Employment within this segment of the economy tripled between 1987 and 2012.

Fredericton now has the highest concentration of engineers in its workforce compared to any other urban centre across Canada. It is also churning out information technology (IT) startups at an impressive rate. Some of the most interesting new startups in Atlantic Canada call the capital city home with names such as Zaptap, IntroHive and UserEvents.

These firms are hoping to follow in the footsteps of Radian6, Q1 Labs and Chalk Media – successful local startups that were acquired by global IT leaders.
At least in part because of the depth of engineering and IT talent, the German corporate behemoth Siemens recently accounced it was establishing a global Centre of Competence in Fredericton where it will develop innovative Smart Grid applications for clients around the world.

Fredericton’s brainpower comes out of a very impressive local feeder system. Out of the 68 economic regions across Canada, Fredericton-Oromocto has the highest percentage of its workforce employed in educational services.  In 2012, eleven percent of the employed workforce plied their trade in the education sector – led by the University of New Brunswick and St. Thomas University. This was well above Halifax (9 percent), Kitchener-Waterloo-Barrie (7.8 percent) and Toronto (7.3 percent).
Fredericton has more residents with masters’ degrees than all but three other urban centres across Canada.
Fredericton is also a place that would get Florida excited (specifically, Richard Florida). The community ranks among the top 10 percent of urban centres across Canada for the intensity of artists and cultural sector workers.

What is the prognosis for a community with a highly educated workforce, deep engineering expertise, a growing roster of IT startups and a broad creative and artistic profile?
These economic fundamentals in Fredericton point to a very positive long term outlook. Yet, there are warning signs that we can’t take economic growth in the Fredericton region for granted.

Between 2010 and 2012, the number of employed persons has dropped by 4,300. Enrolment in the city’s two universities is in decline. Much of the brain power is aging as the boomer population moves towards retirement. Continued public sector austerity will likely hit the capital city harder than most.

There are many things that can be done to bolster the local economy over the next decade. Dramatically increasing the number of international students will help stabilize the economic contribution of the education sector and provide a feeder system for new population. Expanding the infrastructure to support knowledge-based startups will make the community even more attractive to ambitious entrepreneurs.

Fredericton’s engineers are well positioned to take advantage of emerging natural resource industries in New Brunswick and beyond.

Fostering more artists and broadening the cultural sector will only increase the community’s quality of life and expand tourism possibilities. If Richard Florida is right, it will also foster more creativity across the local economy.
But the biggest risk to Fredericton’s economic potential may be complacency. To fully take advantage of these emerging opportunities will take time and investment on the part of both the public and private sectors. It will require creative thinking and new partnerships.

2 thoughts on “ICYMI: Not your father’s Fredericton

  1. Great post. I would point out though that public admin employees as a declining component of the workforce is one thing, the overall impact of govt spending is another. The Fton region is still very dependent upon govt spending – the universities, CFB Gagetown – public admin is just part of the picture. That is one of the reasons why the ed sector is relatively strong in Fton – other sectors not dependent upon govt spending are weaker than in some of the cities you refer to above.

    Still it is good news that hi-tech firms are being successful, and that the unis are contributing to that success. High wage jobs and the discretionary income that goes with them translate into work for cultural sector employees.

    Given govt austerity and that impact on univ budgets, I think we will need to see some rationalization there to keep the innovation flowing. Can we still afford two separate universities ‘up the hill’?

  2. I always like your feelgood stories, but they always require a little bit of balancing. It’s Siemans CANADA that is setting up the R&D centre, you make it sound like some giant german company was looking around the world and found the best place to be Fredericton. They are getting so much money from their partnership with NB Power that that deal really had little to nothing to do with Fredericton. If there were no Lepreau, there would be no centre (and thanks again to Richard Hatfield for that:)

    The IT startups also have little to do with the universities, but more to do with your raison d’etre-large scale partnerships. Introhive is Jody Glidden, who sold Chalk media to RIM. After working for RIM he met enough connections with executives to enable him to start another company. That’s not all good news, since Mr. Glidden now lives in Miami, so its very possible the company will relocate there. Userevents is a pretty tiny operation, but Zaptap looks like a very interesting up and comer, however, its owner went to school in Quebec but then worked for Bell and then Irving. So again, the universities had nothing to do with that.

    The problem with Fredericton schools is there is very little emphasis on developing technology. Saint Thomas is an arts school, so hate to say it but churns out graduates to directly move to China or Japan to teach english. Having Masters degrees has little to do with entrepreneurship or innovation except in engineering and life sciences. Thanks to generous labour contracts, you will find a good percentage of teachers now having Masters degrees.

    Given that the school has two universities the number of tech startups is quite low and should be a cause for concern. Also, when you look at the makeup and description of these startups they all bear striking similarities.

    In an age when most universities are overflowing with students, its pretty concerning that enrollment is dropping. Here in Waterloo buildings are going up faster than they can stuff people in them, and like I”ve said before, there are virtually NO new industries here, all that growth is university oriented.

    Part of the reason I’m posting is that I’ve never heard Mr. Campbell mention Richard Florida in an almost POSITIVE light:) That’s nice to see, but knowing a fair number of artists in Fredericton, that ‘industry’ is certainly not in any real ‘entrepreneurial’ mode. And a number of fingers can be pointed at David Alward for his attack on the fledgling film industry, which has now been pretty much decimated.

    That’s not meant to be negative but simply realistic. Fredericton is a far uglier city now than it was in 1987 with much more poverty and much more noticeable poverty.

    The positive side is that like any government centre there is lots of potential IF that potential can be activated. I’m writing this to be realistic because perhaps if more students were more fully aware that practically their ONLY opportunities if they want to live at home will be entreprenuerial ones, them more people will make that attempt. Its not easy, but nowadays its probably on par with finding a job fresh out of school.

    The other positive is that as an economics prof once repeatedly said “there’s money in Fredericton”. And people like to root for the home team. The Zaptap story is instructive since the owner said that he EASILY raised the first financial hurdle, so raised the bar some more.

    For public policy there really needs to be an attempt to recognize this and plan for it. All it took was a newspaper story for a cancer researcher in Moncton to get all the financial backing he required, yet when I did a search for ‘angel investors’ there was nothing in New Brunswick, and only a remotely connected one in Nova Scotia. So even if the government could do something a little more proactive than running a Breakthru competition then perhaps the number of tech -or any progressive startup, can enter double digits.

Comments are closed.