It's The Economy, Stupid

 

Way back in 1992 I returned to New Brunswick from a six-year educational odyssey in the United States. I started looking for a job but had a really hard time.  I carpet bombed just about every organization in the province with resumes ( I sent out over 300 and still have 60+ rejection letters stored away some place as a reminder).  I also called the HR departments of several of the larger firms (NBTel, NB Power, etc.) and one person actually told me they had 100 resumes for every position and would prefer to hire folks who graduated from a New Brunswick university.  After about six months of nothing I started to contemplate a move to Alberta.

I got a call from Mike MacBride at something called the Department of Economic Development and Tourism about a two month temporary job doing ‘spreadsheets’.  I eagerly took the job as I was well qualified after spending two years teaching Lotus 1-2-3(remember Lotus 1-2-3?) to undergraduates.

The job turned out to be pretty important.  I was supposed to develop comparative cost templates that showed New Brunswick’s cost advantages over places like Toronto, Vancouver and Boston.  These would be used to help the sales team pitch the province to national and international firms.

I wasn’t about to let that job get away.  I worked like a dog – 12 hour days – weekends – and ended up parlaying a two month gig into nearly four years and that launched my career.  I made myself indispensable.  I turned the ‘spreadsheet’ analysis into full business case documents that were customized to individual prospective clients.  I spent dozens of hours in the UNB library combing through Statistics Canada and other data sources picking out cherries to be used in our pitch. No one had ever done that before.

In the end, with our partner NBTel, we pitched dozens of national and international firms and each one of them got a customized business case document making the financial case for expanding in New Brunswick.  A VP at UPS told me he slept with my proposal under his pillow.

I’ll never forget those years.  The audacity of that small team of sales people to think they could convince IBM, Xerox, Air Canada, UPS, FedEx, ExxonMobil, RBC and many more to put national back offices and contact centres in little New Brunswick. I couldn’t believe it when I started in the job.  Why would any big firm in their right mind put a large national operation in New Brunswick?

But if you look at the model closely, it actually made sense.  The demand for these back offices and contact centres was rapidly expanding.  Everyone needed 1-800 numbers and technology was enabling consolidated back offices.  There were stories of insurance firms in New York shipping airplanes full of paperwork to Ireland each day to inputted into computers and processed.    Premier Frank McKenna would get a meeting with the CEO (who would turn him down?) and all he would ask for is that the CEO let his team prepared one of these detailed business case documents for his firm.  This document would then conveniently show a 15%-20% cost advantage or more from consolidating in New Brunswick and in many cases this tipped the decision to expand in New Brunswick.

That model – a clearly defined and compelling value proposition – is the template even today for successful economic development.  What do we have here that will compel entrepreneurs and multinationals to invest here?   If we have opportunities (1990s it was aquaculture opportunities, early 2000s it was a high quality, bilingual workforce, what is it today?) we can sell them to local and external investors.

I say this because my new role as Chief Economist for PNB under the Jobs Board is a homecoming of sorts.  I always appreciated public service but never really saw a space that made sense for my skills and interests.  But all my writing and cajoling hasn’t really made much impact on the economic development system in New Brunswick.  It in large part hasn’t changed much in 20 years.

If we don’t find a way to get the province’s economy back to at least a moderate level of economic growth no amount of fiscal austerity will be enough to bring balance to the province’s books.   We risk becoming essentially one big retirement home and this recent talk of converting hospitals to nursing homes is one of many signs this is currently in progress.  The labour force in New Brunswick under the age of 45 in this province peaked at 251,000 way back in 2000 and has been declining since (now 210,000).  This is a huge risk and I get a collective shrug when talking about it.

Shawn Graham’s Self-Sufficiency Agenda called for a 100,000 increase in  the population by 2026 to try and rebalance our demographics.  This was a very good idea.  Unfortunately, since the Self-Sufficiency Agenda was launched our population has mostly stagnated and the population under the age of 45 has dropped 38,000.  Again, collective shrug.  The sense of urgency we all felt back in the mid of the last decade has given way to that collective shrug.

So, in the Nikolay Chernyshevsky fashion (yes, Lenin stole the phrase from Chernyshevsky ) – what is to be done?  Obviously we don’t have the economic and social problems of late 19th century Russia.  New Brunswick is a modern economy with strong infrastructure, good government and a relatively well educated population.  We have small but solid urban centres that feature short commutes, relatively low housing costs, friendly neighbourhoods and low crime.   They should be magnets for investment and entrepreneurship.

Anyway, for me the question was a simple but profound one.  Do I give up an excellent consulting practice, a great relationship with Donald Savoie’s institute at UdeM, my column at the TJ to see if I can help craft and move forward a new growth agenda for PNB?  I answered yes to that question.  I am 47 years old.  I want a bit more from life than just making money.  Maybe, just maybe, we collectively can move things forward.  Maybe, just maybe in 10 years from now we won’t be lamented a failed “Prosperity Plan” or a failed “self-sufficiency agenda”

Maybe we will be celebrating living in a province with its mojo back. A place that is attracting young professionals and families from around the world.  A place that is incubating hundreds of ambitious entrepreneurs and attracting capital from far and wide.

Maybe. If I can play some tiny role in that vision.  It’s worth a try.

PS – the most difficult thing was giving up my column in the TJ.  I feel like an addict suffering withdrawal.  It will be painful.