Federal ‘superclusters’ reek of faulty thinking

There’s a reason why the hosts of the venture-capital reality show Dragon’s Den don’t include the assistant deputy minister of Economic Development Ontario or federal Innovation Minster Navdeep Bains.

Politicians and bureaucrats don’t know a thing about picking economic winners and losers.

Yet politicians and bureaucrats regularly convince themselves they possess the economic insights and business acumen needed to spend billions of taxpayers’ dollars trying to will into existence hundreds of new businesses and millions of jobs.

They would be more successful if they each went to the gift shop at a Harry Potter exhibit, bought plastic wands and stood out in the parking lot chanting made-up spells.

The latest example of an expensive, government-driven exercise in economic futility was the announcement by Bains late last week of federal funding for five business “superclusters.”

Over the next five years, Ottawa is going to “invest” nearly a billion of your tax dollars funding five centres around which innovative businesses and scientists are going to cluster to do super stuff. That’s a weak description of a supercluster, but I’m not sure there is a good description.

When asked to explain, Bains told reporters, “It is a made-in-Canada Silicon Valley that will create tens of thousands of jobs — that’s what a supercluster is.”

No, that’s what you hope a supercluster will evolve into. But you can’t just go to a big-box store, plunk down an oversized subsidy cheque, and grab another Silicon Valley off the shelf. If it were that easy, every Tom, Dick or Navdeep would do it.

Creating the next Silicon Valley can’t be planned. And it certainly can’t be planned by some government committee and a bunch of handoutseeking “innovators.”

Want to know how the original Silicon Valley came into existence? William Shockley, who was crucial to the development of both the transistor and the semiconductor, and who shared the 1956 Nobel Prize in physics for his efforts, is known as “the Father of Silicon Valley.” And he moved his Shockley Semiconductor Labs from New Jersey to Mountain View, Calif., in the late ’50s because his mother, who lived in Palo Alto, was ailing and he wanted to be close to her during her declining years.

Bains and the Liberals would have better luck trying to find supersmart men or women who are devoted sons or daughters and pay their moving expenses.

The biggest single problem with political and bureaucratic decisionmaking is that most of the factors deemed important have nothing to do with what makes a business successful. For instance, the Liberals just happened to find one worthy supercluster in each of Canada’s five regions. No region was left out; no region got two. That wasn’t a politically motivated coincidence in any way, was it?

Or how about the fact that the “protein industries” supercluster that is to be built on the Prairies is going to focus on “plant proteins.” What about meat? Meat’s a protein and the Prairies are very good at producing it. Oh, right, meat isn’t politically correct. So even if meat would make the protein supercluster successful — a business decision — it can’t be funded for political reasons.

The same kind of thinking that is behind the superclusters (which is nothing more than a catchy phrase thought up by a marketing consultant), is also behind Ontario’s decade-long “green energy” push. That was supposed to create hundreds of thousands of high-tech jobs as it transitioned Ontario into the “carbon-free future.”

And the Alberta NDP’s climate leadership/carbon tax was to lift Alberta out of recession.

Nothing makes superclusters any more likely to succeed than those failures.