Invest in talent for economic recovery
Training and retraining is never more popular than during a period of debilitating unemployment. We’re going through a brutal period, and upskilling, re-skilling and a variety of other programs are going to be a necessary part of our recovery.
While there are still major disagreements on economic policy issues, most agree that training is, broadly, “a good thing.” Governments of all stripes are pledging new money to help displaced workers and sectors.
But what if this welcome help only tells half the story? In addition to training for the jobs we think we’ll need, we should invest in the talent that already exists, and towards the problems they are working on we don’t yet know how to solve. Many of the headline facts seem to point to the need for training:
> The unemployment rate for ages 15-29 is currently at 15.7 per cent.
> In the arts, recreation and entertainment sectors, total hours worked fell by 28.9 per cent in Sept. 2020, compared to a year earlier.
New employment horizons are essential, and retraining is an important component to that. But consider a different fact pattern:
> According to the Canadian Federation of Independent Business, 181,000 Canadian small business owners are seriously contemplating permanent closure, putting more 20 per cent of all private sector jobs at risk.
> The national office vacancy rate has risen to 13.4 per cent, a high last hit in 2004. In Calgary, it’s almost 30 per cent.
These are big, systemic challenges. Even with a correction after the pandemic, these trends are not going to be solved simply by retraining or massive public investments. Luckily, this business know-how, this real estate, hasn’t been degraded — yet. And new hustle has emerged in all kinds of unlikely places during the pandemic.
One example is Jessica, a Ryerson student and personal fitness instructor who took her business online, and now has a paying audience in her home country in eastern Europe. She’s one of thousands across the country who have used this moment to innovate.
And she is a representative of generations before her that came out of the Second World War, or from immigrant populations arriving in Canada. They built up new thriving sectors or businesses, based on need and the skills that they created — not despite the hardship they experienced, but because of it.
Talent is around, and business opportunities exist, awaiting investment.
There are more resources than ever to do so. During this pandemic recession, supported by government spending and fuelled by perversely healthy stock markets, financial capital is in good shape for the moment.
The household savings rate in mid-2020 surged to 28.2 per cent, up from just 3.6 per cent before the pandemic began, according to CIBC. The bank estimates that Canadian households and businesses are sitting on more than $170 billion in excess cash, easily the highest in our history. Incidentally, cash sitting in bank accounts is earning an abysmal rate of return.
A complete response requires a focus on investing in our talent in a way that has too often been secondary. Committing private dollars and matching it with public dollars to invest in local innovators. Placing some big bets, given the healthy state of so many financial institution balance sheets. And potentially, the creation of new intermediary institutions, inspired by the Business Development Bank of Canada, to invest further in the most promising talent.
Liberals and progressives, in particular, want to help workers in need. The first impulse, to upskill, is a good one. And we should continue to reform post-secondary education and cultures of lifelong learning. But you can’t always upskill your way to new business models, or to reimagining how to repurpose our large real estate footprints.
To do those things takes a singular focus on talent, like we do for hockey, or music. That talent that is waiting for financial investment — if only we take a chance on it.