A lesson in New Brunswickian economic development logic

I had a conversation today with another of these economic developers that is known to push the envelope as it were when it comes to this business.

Anyway, he told me that the powers that be (so to speak) in provincial economic development circles these days want to place more emphasis on supporting local companies and less on attracting foreign investment.

That’s where the logic part comes in.

Statistics Canada tells us that 80% of small, local businesses will go bankrupt within five years.

A recent world bank study confirmed that 80% of all foreign firms that invest in your community will re-invest within five years.

We, therefore, want to put our effort in helping the 80% stave of bankruptcy for another year or so. I guess the 2-3 foreign investments over the past two years (not including the virtual call centre) was too much for the bureaucracy to handle.

Which is probably why New Brunswick is at the arse end of Canada and the US when it comes to economic standard of living and our government’s ability to raise taxes to pay for public services.

Don’t get me wrong. I have always said that a tightly focused support effort designed to help real entrepreneurs grow into national and international markets – is positive economic development. Nurturing grass roots efforts to build community economic development capacity can be positive economic development. But attracting lead firms, well capitalized multinationals with good business models, must be part of the mix.

In addition, I find it hilarious that New Brunswick’s New GovernmentTM releases position papers (i.e. self sufficiency task force) stating that we must be much more intentional about attracting global investment and a federal Commons committee out this week recommended repositioning much of our trade development effort into foreign investment attraction and our boys finally decided to read now the memo from 1976 that recommended supporting local firms.

Funny stuff, if it wasn’t so bloody serious.

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0 Responses to A lesson in New Brunswickian economic development logic

  1. Anonymous says:

    I’m confused, am I having flashbacks to Bernard Lord? Or is this an old post?

    However, keep in mind that once corporations establish in the province its not like they are given the bums rush. UPN doesn’t have their head office in the province ‘because the company just really likes it’. That would be ludicrous. They do it for the low tax and cheap labour. Once again, just look at corporate contributions to the budget to see what level they are at.

    So there’s a BIG difference between ‘attracting’ and ‘keeping’. That’s the rub.

  2. David Campbell says:

    Yeah, I used to chuckle when the Tory political bloggers would get so righteous and offended when I critized the Lord government. Apparently, I was a Liberal partisan hack intent on bringing down a righteous regime. It seemed odd to me at the time. Who, exactly, am I supposed to criticize? The Opposition? So, now I raise what I believe to be an important issue – the increasing chasm between the rhetoric of the Premier and the S.S. guys and the bureaucrats and now I am a Tory partisan hack, intent on bringing down a righteous regime.

    Go figure.

    Ultimately, words must translate into action and the bureaucracy is the delivery mechanism for politician’s vision.

    That’s a scary proposition these days.

  3. Anonymous says:

    Again, people have to make up their own minds, but over at Charles Leblanc’s site you often see these statements by people who don’t have a lot of formal education but see through the bullshit. That essentially New Brunswick is GOVERNED by Irving. Again, when you have a family with so many fingers in so many pies, the last thing you want is more foreign investment-that dilutes your control.

    As you know, that is my main preference, investing in people first, and foreign investors second, but like they say “sneaky inconsistency keeps me up at night”.

    If these locations were heavily invested in, obviously Irving’s political clout would go down. A concrete example of that would be just yesterday (though not Irving), where UPN announced closing the Blackville Mill.

    If there were other investment in Blackville then UPN wouldnt’ have the government by the throat.

    A good percentage of people already know this, as mentioned, the ‘self sufficiency’ task force is an even more limited version of ‘next nb’. At least Next NB had something like thirty people looking and talking to NBers, this one has only two, whose biases have been openly explored.

    Many don’t like to hear it, especially people who like to believe that their vote actually means something, but its essentially a one party government. It’s of course not ‘just about irving’ because there are huge areas of public life that Irving couldn’t give a rat’s ass about what happens, and as said, UPN operates in their limited sphere in the exact same way.

    The liberals actually better move a lot faster, because they’ve essentially only got another year to blame the tories and people will start to ask ‘what have you done for us’. In a ‘one party system’ though I suspect what will happen is the tories will elect their own Stephane Dion, somebody nobody can see governing, most likely somebody nobody has even heard of, or somebody who doesnt’ even speak french.