Chew on this: Agri-food as economic ‘supercluster’
The perils of prediction have been serially noted. Dewey defeats Truman. Trump won’t mess with NAFTA. Cellphone usage won’t break the millioncustomer mark.
That last bit of crystal ball gazing was courtesy of McKinsey. In the mid-1980s the management consulting firm was commissioned by AT&T to forecast the potential global cellphone market by the dawn of the 21st century. McKinsey estimated that 900,000 sounded about right, given the clunkiness of the phones and their short battery life. The Economist magazine would later note that by the waning days of 1999, mobile phone companies were signing up 900,000 new subscribers every three days.
But what the heck, here’s a gamble. The federal government is bound to select agri-food as a “supercluster” with the promise of creating more middle-class jobs (yes, that phrase is sounding increasingly shopworn) while pumping up the country’s global competitiveness.
In announcing the formal launch of the supercluster initiative this week, Innovation Minister Navdeep Bains announced that “up to five” high-growth sectors will be chosen and will benefit from “jump-start investment.” The cash pot has been set at $950 million.
Let’s drag the plow across this clusters idea one more time.
Is the idea new? No. Can clusters be artificially created? No. Could a treasure chest of gold doubloons make the difference? There seems to be no evidence of that. To quote from a previous exchange with Hal Wolman, research professor at George Washington University’s Institute of Public Policy, “There is near unanimous agreement that a cluster cannot be created where the basis of the cluster doesn’t already exist.”
If, however, a cluster is already in place and has demonstrated a competitive advantage, economic development policies — think infrastructure improvements — can enhance cluster performance.
Let’s blue sky for a moment. Guelph has an international reputation for its strength in agriculture studies (University of Guelph) and research. The province’s renewed plans for a high-speed Toronto-Windsor rail line now include a Guelph stop.
The prime minister’s economic advisory council — led by McKinsey’s Dominic Barton — earlier cited the Netherlands as a prime example of what Canada should aim for when focusing on this sector. Holland is the world’s second largest exporter of agri-food products. Its Wageningen University consistently ranks as the top agriculture university in the world and its research focus is renowned. Holland’s agrifood activity is very cluster-ish.
I have previously cited the ways in which the Netherlands comparison doesn’t work as a benchmark — re-exporting through the ports of Rotterdam and Schipol boosts the country’s numbers. Plus, horticulture exports — tulips — skew agriculture data in its favour.
What the Canadian version could be would depend partly on whether it adopted the trademark traits of Silicon Valley — both hotly competitive and collaborative with labour market demands that push both employment and wage growth.
Perhaps that sounds absurdly optimistic. And in the main, I do lean to the view that supercluster policy appears to be little different from age-old sectoral or industrial policy. Michael Porter, who coined the clusters concept, argued that cluster policy is “fundamentally different.” The fatal flaw of industrial policy, he wrote, is its focus on “favouring particular types of economic activity, picking winners, and attempting to artificially bias competition in favour of a particular country or region.” On the other hand most clusters “form independently of government action — and sometimes in spite of it.”
When Navdeep Bains says he has close to a billion dollars waiting to be doled out, this “historic investment” sounds an awful lot like a doomed, picking-winners strategy.
And yet, there’s every reason to see agri-food not just as a catalyst for economic growth, but sustainable economic growth. And Canada is an obvious global brand ambassador for safe, sustainable food.
Last month, the Canadian Agri- Food Policy Institute released a brief paper highlighting some of what needs to happen in order for that potential to be realized. Breaking down silos (federal, municipal and provincial governments working at cross-purposes), improving collaboration and removing regulatory obstacles are a few.
The message to the world should place an emphasis on traceability, on ecological impact, on sustainability — tying agriculture policy to social and health policy.
That’s what will push the growth of the globally successful brands that the minister wants the country to be known for. A great deal of real hard work is involved. Bains’s crew has to figure that out before it starts throwing money around. jenwells@thestar.ca