It’s time to up our game

The Guardian (Charlottetown) - - OPINION - BY DAVID CHAUNDY GUEST OPIN­ION David Chaundy is a Se­nior Econ­o­mist with the At­lantic Provinces Eco­nomic Coun­cil (APEC).

In a “slower for longer” growth en­vi­ron­ment, how can At­lantic Canada im­prove its eco­nomic per­for­mance? As we be­gin 2016, let me share three strate­gic pri­or­i­ties for gov­ern­ments aimed at strength­en­ing the re­gion’s econ­omy.

Set a global stan­dard. We live and op­er­ate in a global econ­omy, but among the provinces the three Mar­itime ones have the low­est lev­els of in­ter­na­tional ex­ports (in terms of value added) rel­a­tive to the size of their economies. New­found­land and Labrador would join them at the bot­tom of the pack if off­shore oil pro­duc­tion was ex­cluded. Through newly ne­go­ti­ated trade agree­ments we are now in­ten­si­fy­ing our ex­po­sure to in­ter­na­tional com­pe­ti­tion in our lo­cal mar­ket.

We shouldn’t try to be the best in the world at ev­ery­thing, but we do need to be glob­ally com­pet­i­tive. Strength­en­ing our in­ter­na­tional link­ages can help pro­vide new ideas and stim­u­late novel ap­proaches to fa­mil­iar prob­lems. It is hard to be glob­ally com­pet­i­tive if we don’t know what the rest of the world is do­ing.

So gov­ern­ments should fo­cus on firms that are glob­ally suc­cess­ful. Ex­pose do­mes­tic firms to global lead­ers and in­ter­na­tional best prac­tices. Bench­mark in­dus­tries against in­ter­na­tional stan­dards be­fore of­fer­ing any sup­port; do the same for our tax, reg­u­la­tory and roy­alty regimes and make re­forms ac­cord­ingly. En­sure stu­dents leave high school with a strong global aware­ness and their lit­er­acy skills match, and will con­tinue to match, in­ter­na­tional bench­marks. In­crease the num­ber of in­ter­na­tional stu­dent ex­changes and en­sure our grad­u­ates meet in­ter­na­tional per­for­mance stan­dards.

De­velop scale. Eco­nomic de­vel­op­ment agen­cies fo­cus on small firms. But an APEC Re­port Card has shown that dou­bling the num­ber of small ex­porters (those with sales be­tween $30,000 and $1 mil­lion) would only in­crease At­lantic Canada’s ex­ports by 3%. We need to fo­cus on de­vel­op­ing larger ex­porters not cre­at­ing a mul­ti­tude of small ones. Even some of our larger busi­nesses may not be big enough. We have seen the clo­sure of one re­fin­ery and sev­eral pulp and pa­per mills in the re­gion over the last decade or so, in part be­cause they didn’t have global scale.

Too of­ten we feel a need to spread new eco­nomic de­vel­op­ment ini­tia­tives through­out a prov­ince, re­gion or na­tion, di­lut­ing the ben­e­fits of scale. I re­cently heard a com­ment that there were 100 cen­tres of ex­cel­lence in one At­lantic prov­ince. How could that be in a prov­ince with a pop­u­la­tion of less than 1 mil­lion? How many of th­ese would meet the test of global ex­cel­lence? We won’t be known in the rest of the world for 100 dif­fer­ent things. Irv­ing Ship­build­ing is cre­at­ing a North Amer­i­can ship­build­ing cen­tre of ex­cel­lence on the East Coast based on ‘best in class’ con­struc­tion prac­tices and stan­dards. The prov­ince should be known for be­ing a global leader in two other ar­eas. Each At­lantic prov­ince should be known glob­ally for ex­celling in three ar­eas.

Build on proven suc­cess. Gov­ern­ments are of­ten crit­i­cized for not be­ing good at pick­ing win­ners. My rec­om­men­da­tion is to fo­cus on where growth is oc­cur­ring and to build upon proven suc­cess.

What baf­fles me is that in a re­gion that is sup­pos­edly ham­strung by is­sues such as high taxes, high en­ergy costs and govern­ment regulation we still see suc­cess­ful firms emerge and pros­per. Even if this is a dif­fi­cult busi­ness en­vi­ron­ment to op­er­ate in, this tells me that suc­cess is still pos­si­ble. So let’s fo­cus on nur­tur­ing proven win­ners, and ac­cel­er­at­ing the growth of firms that have al­ready met the test of be­ing glob­ally suc­cess­ful.

And where is the ma­jor­ity of busi­ness growth oc­cur­ring? In our cities. Em­ploy­ment in Char­lot­te­town, for ex­am­ple, has grown more than six times faster than the rest of the prov­ince over the last decade, cre­at­ing 4,700 jobs. With the labour force co­a­lesc­ing in ur­ban cen­tres, it makes sense to fo­cus on en­sur­ing our cities are at­trac­tive places to sup­port fur­ther busi­ness growth with re­sult­ing in­comes for work­ers and gov­ern­ments.

Im­ple­ment­ing th­ese three prin­ci­ples — set­ting a global stan­dard, de­vel­op­ing scale and build­ing upon proven suc­cess — across govern­ment de­ci­sion­mak­ing would help bring much needed fo­cus to eco­nomic de­vel­op­ment ac­tiv­i­ties.

David Chaundy

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.