It's The Economy, Stupid

I got a few comments on the recent post about focusing economic development and strengthening the value proposition for economic opportunities where your community or province has some core attributes.   The comments fall into two camps: 1) business incentives are good and necessary; and 2) how (and who) decides what is an opportunity?

Good questions.  To the first I will reiterate my longstanding view that I am not opposed to governments and communities provide relatively small scale incentives to attract industry if they are required to be competitive.  I just don’t think they should dominate the value proposition.

To the second, I will reintroduce a concept I have put forward on multiple occasions.  As far as I know not a single economic development organization has taken up my idea which could mean it is a terrible idea or it could mean that it’s an idea whose time has not come.

There are over 400 distinct NAICS industries and those can be even subdivided again.  I have suggested in the past that economic development organizations should go through all of the industries in a systematic way and determine if there is potential for development in the jurisdiction.  This potential can be based on a local attribute (s), market trends, existing cluster of activity,  etc. or a combination of these.  If the first cut indicates potential, then we determine how much potential and whether or not it is worth to pursue as an economic development opportunity.  Even small opportunities can be important if the relative cost of their development is low.

The following shows a few examples – not necessarily real examples – but to illustrate the point.  I have lifted a few NAICS industries as examples.

 

 

 

 

I am told that Quebec loggers are doing a lot of work in northwestern NB because it is hard to find local loggers (this is anecdotal).  If true, they take their labour income back to Quebec and we lose the economic benefit.  Why not attract international loggers to move to the region and keep the high value economic benefit in New Brunswick?

 

 

Why does Nova Scotia have nearly three times as many people in this category?  Is the scenery better?  Is the food better?  Are there stronger institutions?

 

 

Okay. Not really interested here but it is curious and, in fact, there are a number of countries for which flowers are a major export.  Globally the exportation of flowers is a billion dollar industry.  Just not sure how it applies to us.

 

 

This is an ongoing trend.  Are we okay with it or should we pitch a place like Moncton to the firms shipping in pastries from Quebec?

 

 

 

 

This is not necessarily true I just wanted to point out that the construction workforce can be an ‘export’ opportunity.  As far as I know we have never even considered this as a province.

 

 

 

One of a few sectors where traditionally NB has been very strong.  Are we going to let it wither away because of a lack of truckers?

 

 

This one is pretty straight forward.  I would also say that our nuclear energy plant needs molybdenum and if we are to develop SMRs in this province – maybe our molybdenum deposits become a little more interesting.

 

 

 

This is interesting.  NB has a far larger forest products industry but on the wholesale side Nova Scotia is killing it.  Why?  Who cares?  I care.  This could be 400-500 good paying jobs.

 

 

 

 

I guess we are just giving up on this sector.  Maybe for good reason (?).  I’d like to at least have a clear answer as to why.

 

If you have survived this blog to this point, I hope I have presented this idea clearly.  The problem is there is no private sector player or firm that has an interest in doing this work.  Individual firms or entrepreneurs may spot an opportunity (remember my blog about VistaPrint and business cards being exported across North America from  small town in the midwest US) but no one really has an interest in the big picture.

Except, government funded economic development agencies.