Paralysis by Analysis

I had a couple of good conversations recently that have confirmed my belief that we need a little more ‘entrepreneurial spirit’ injected into our economic development efforts. And I am not talking about Gerry Pond’s latest attempts to raise interest in entrepreneurial development. Although, as a side, it is interesting to see the style of Shipley (TJ) versus Eric Lewis (T&T). Lewis leads with:

Gerry Pond believes companies that are bound to have the biggest impact on the New Brunswick economy are not those that come from outside the province but are those created from the ground up, right here in the province. “Locally-based entrepreneurs are going to add more value,” he says.

Shipley leads with:

Technology business guru Gerry Pond says New Brunswick must reinvent itself as an innovative province by nurturing a new generation of entrepreneurs. “We need new value created in the economy,” said the former NBTel and Aliant executive and serial entrepreneur.

I have never seen a better example of the attitudinal difference between these two publications.

The key point here is that Pond wants to foster more ‘entrepreneurship’ and on that front he is to be commended. His side swipes at the puny efforts to attract firms from outside New Brunswick are beside the main point. The T&T, however; decides to make it the main point.

Kudos to Shipley and as for Lewis, he would be wise to read some of the former’s writing on this issue.

But back to my main point which is entrepreneurialism in economic development. I am all for research and planning but eventually economic development departments/agencies just need to get out there and do it. Plan it, resource it, fund it and go out and get it done.

When Kevin Bulmer back in 1990 saw that Omaha was attracting ‘telemarketing centres’, he did his homework. He found out that deregulation was driving down long distance charges and 1-800 numbers were changing the landscape. He also figured that NB’s large bilingual workforce (14% unemployment at the time), good telecom and lots of empty buildings (like the Eaton’s distribution facility in Moncton) would be a good value proposition for these firms. He ran the idea up the flagpole, his bosses bit and within weeks, Frank McKenna was on a plane out pitching NB for call centres.

We can’t study things forever and we can’t take have or even one quarter measures. The game is becoming highly competitive. Some guy at NSBI has a hunch that Bermuda hedge fund firms could be attracted to Halifax so he gets permission from Lund to get it done and goes out and gets it done. Same with Slemon Park on PEI. They said the Atlantic Technology Centre in Charlottetown would be a failure. Governments shouldn’t be in the real estate game, they said. It’s packed full and they are building another one.

In my book, the last great rainmaker economic development initiative in New Brunswick was started 18 years ago. It has created 22,000 jobs and been an overall success. But 18 years is a long time to go without a winner. We tried elearning (I hear it is making a comeback) but that just led to a dozen failed ventures all backed by government grants/loans. The province made some limited efforts in the area of IT generally but with very limited outcomes. There was some attempts to foster manufacturing, but again, with very little success.

We need a few rainmakers. Energy might be one. But it can’t be the only one. Unless we use ‘cheap’ energy as the foundation for a broad industrial development effort.

I say to the province pick a few and go for it. Data centres, elearning, translation, food, higher value back offices, animation, nearshore IT services, auto, aero, bio, nutra, something and just go for it. We may fail but we need to seriously try. Just scratching the surface will get us nowhere.

And if Gerry Pond truly thinks that we can do all of this without attracting a few anchor, global players, I must emphatically disagree. We need more entrepreneurs, that is true but we also need our fair share of the big boys.

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0 Responses to Paralysis by Analysis

  1. Anonymous says:

    Agree with your thoughts but with a couple qualifications.

    Your posts under emphsizes one of the key factors influencing the contact center success; we built on a competitive advantage, that being an innovative and progressive telco with fiber optic, digital switches etc. So, when picking something to turn into a winner, we have to have some sort of competitive advantage to leverage.

    I absolutely beleive that energy could be it but we need a progressive and innovative power commision. At the moment, innovation efforts are aimed at structuring the companies for regulatory advantages, and strategically preparing justifcations for rate increases. These have been successful and well done but that is not what will make NB Power a cataylst for alternate energy, greener energy and lower cost energy. A good starting point would be to adjust their mandate accordingly.

    On another point, you list:
    “I say to the province pick a few and go for it. Data centres, elearning, translation, food, higher value back offices, animation, nearshore IT services, auto, aero, bio, nutra, something and just go for it.”

    I would argue that we have (inadequately) attempted all these with the added complication of making sure the french get what the english get, the north gets what the south gets, rural gets what urban gets, F’ton gets what Moncton gets etc. IT IS TIME TO REMOVE THESE HANDCUFFS.

    NB is a tiny place fortunate to have provincial status. As we struggle to retain enough population to be considered a moderate sized bedroom community for larger city, we slice and dice all our economic development efforts e.g no less than 15 enterprise agencies sprinkled throughout the province all with sizable staffs often competing with one another [BTW,add this staff to the BNB staff and there is one economic developer for about every 2000 citizens in NB. That would give Ontario a force of 5000 at the same population ratio and perhaps 25,000 with an area multiplier]

    If we can build up a successful sector, let’s say like PEI’s $300M aeropsace industry, no mater where it is located, the entire province will be positivey impacted. Instead, we dilute all efforts with aerospace initiatives /parks in Fredericton, ‘CHI, Saint John, Dieppe etc none having much of a significant impact.

    My point is we need to focus on a sector where we have something to build on, prioritize financial support for it including sustained R&D, and allow it to develop where it makes the best business sense (i.e. where the business can best prosper in the long run).

    Until we are ready to make this commitment, we will not have another rainmaker.

  2. mikel says:

    The above makes a lot of good points but IT needs a qualifier. There is no reason to think that bureaucracy is a HINDRANCE to economic growth. As a certain level all of those ED organizations have nothing to do with economic development, just go to the website and see their mandate. They have very little ‘power’, and little to do with actually developing the economy-which is part of the problem.

    Now they are trying to get local people involved in ED because the province simply isn’t interested (or can’t-at least for all the province). We saw the enterprise group in Sussex put forward a progressive plan, one aimed at developing the economy and the PROVINCE was the problem.

    You can read Don Savoie’s book on ED in the nineties, when locals in Kent County and the feds were on board for a progressive ED policy, and once again, the problem was the Province. And as numerous sources state, unless ALL levels work together ED doesn’t happen.

    So look at forestry, once again many communities like McAdam have a local forestry development program, one that was even run by investors and banks, once again, the PROVINCE said to (*&^ off.

    So for the last few days we’ve seen lots of comments about energy etc., so once again it has to be asked WHY the province makes these decisions. Until NBers can get organized enough to challenge the corporations who have control, then none of these ideas will get off the ground.

  3. Anonymous says:

    Here are a couple reasons why the Province is needed to assist ED:

    1) In the energy case, they appoint the CEO and board of NB Power and therefore set the mandate.

    So, if they mandate things like low cost industrial energy and innovative approaches like ease of getting alternate power on the grid, it will make a huge impact in advancing the objectives.

    2) Major advancements of ED sectors come from the federal government. SO, while what the province does on its own is insignificant, if they were providing a consistent, persistent and unified message to the Feds for support on a targeted sector, that would have a huge impact. e.g. Ontario auto or Quebec aerospace where they have made it easy for the Feds to invest billions without much debate on regional issues or fringe sectors.

    Instead, our message looks like: We have ‘targeted’ these 12 sectors in 15 regions of the province and the feds can easily dismiss our plea for assistance saying we cannot do all that (especially for the few seats we represent)

    It is quite right that free market conditions will naturally provide ED. However, in NB’s case, we are in need for reversing a declining trend, closing a long developing gap and attempting to catch up to at least the average economies. For this, extraordinary efforts are needed including the help of free markets and all levels of government.

  4. mikel says:

    I wasn’t trying to say that the province isn’t needed, I was trying to say that from most of the evidence it is the province that is the problem, which is the REASON why economic development has stagnated in most sectors. If you want further proof of that, simply continue clicking back over the months and years of this blog and you will find PLENTY of evidence of that.

    THe province absolutely is necessary, no doubt about it-either as a constructive partner or else to at least stop hindering.

    As for the comments about the ‘free market’, that’s a joke right? I was talking about corporations, which have ZERO to do with the ‘free market’, everybody in New Brunswick should know that. Irving wouldn’t last a month, in fact have SAID they wouldn’t last a month without government largesse. No matter what the sector corporate welfare is the norm. Media never talks about it in New Brunswick, but in the rest of the world its quite well recognized as ‘corporate socialism’, just read the Financial Post or Financial Times for about a month and that’s pretty much admitted.

    So the question is always IF the government is going to prop up company or industry x, then which ones? Contrary to David’s eternal optimism about auto plants, we KNOW that the NB government HAS a project. It is energy. It is nuclear. It is another oil refinery. It is uranium.

    They have SAID that, their whole policy is built on that, it’s part of the ‘atlantica’ program, the ONLY program that the feds have said they will put money into.

    To refuse to BELIEVE them when they say it is the ultimate in delusion. So once the province is recognized as the central problem (virtually anything can be lobbied as being part of ‘atlantica’) then the next step is clear-actually GET a representative government or at least attempt to control it. The only way to do that is through political means-the same way the protestors for the educational system are doing.

    This blog is part of that, but only a small part. Governments don’t respond to journalism, they respond to political action. NOW is a good time for that, I was reading at another blog about the wood protests in Rexton, where a guy from Woodstock, a woodlot owner, is apparantly thinking of running for tory leadership.

    This is a province which has made TONS of unpopular decisions, and which never even got the majority of the vote-if they aren’t retarded, then they will respond in some way to political pressure. In politics you either take part, or get taken apart.

    It should be remembered that this government is VERY happy with its ‘progress’. Saint John and the southern cities are booming, and resource prices are high. THEY don’t see a problem-you do.

  5. richard says:

    “where a guy from Woodstock, a woodlot owner, is apparantly thinking of running for tory leadership”

    Well, more power to him. Unfortunately, by the time of the next election, most of those directly affected by the silviculture decision will be in Alberta, and won’t be voting.

  6. Anonymous says:

    Actually, many who work in alberta can and do still vote in new brunswick. And isn’t the election just a year and a half away now?